PegBio Co., Ltd. — Capital/Financing Update 2003

Jul 16, 2003

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

(incorporated in Bermuda with limited liability)

PROPOSED OPEN OFFER OF NEW SHARES ON THE BASIS OF FOUR OFFER SHARES FOR EVERY SHARE HELD AND INCREASE IN AUTHORISED SHARE CAPITAL

The Company proposes to raise approximately HK$51.7 million before expenses by issuing not less than 862,102,552 and not more than 1,024,769,216 Offer Shares at a price of HK$0.06 per Offer Share by way of the Open Offer, payable in full on application on the basis referred to below. Qualifying Holders will be offered 4 Offer Shares for every Share held on the Record Date. The Open Offer will not be available to the Excluded Shareholders. Net proceeds from the Open Offer of approximately HK$49.7 million are expected to be applied as to approximately HK$32.0 million for the repayment of liabilities outstanding (including the Convertible Note, the Convertible Bonds and other liabilities of the Group) and as to the remainder of approximately HK$17.7 million for general working capital of the Group. The Group has yet to decide the proportion for the repayment of the Convertible Note, the Convertible Bonds and other liabilities of the Group.

The Open Offer will be conditional. In particular, it is subject to, among other things, the Underwriting Agreement becoming unconditional and the Underwriter not terminating the Underwriting Agreement in respect of the Open Offer (see “Termination of the Underwriting Agreement” below). Accordingly, the Open Offer may or may not proceed.

The Underwriting Agreement contains provisions granting the Underwriter the rights, which may be exercised at any time prior to 4:00 p.m. on the third business day following the last day for application and payment for the Offer Shares, to terminate the Underwriting Agreement on the occurrence of certain events. One of such events is force majeure which includes the happening of certain external event or change that may, in the reasonable opinion of the Underwriter, materially and adversely affect the business, or financial or trading position or prospects of the Group as a whole. If the Underwriter terminates the Underwriting Agreement, the Open Offer will not proceed.

Existing Shares will be dealt with on an ex-entitlements basis from Thursday, 28th August, 2003. To qualify for the Open Offer, all transfers of Shares must be lodged with the Registrars by 4:00 p.m. on Friday, 29th August, 2003.

Shareholders should note that the Shares will be dealt with on an ex-entitlements basis commencing from Thursday, 28th August, 2003 and that dealings in such Shares will take place whilst the conditions to which the Underwriting Agreement is subject remain unfulfilled. Any Shareholder or other person dealing in such Shares up to the date on which all conditions to which the Open Offer is subject are fulfilled (which is expected to be Tuesday, 23rd September, 2003), will accordingly bear the risk that the Open Offer cannot become unconditional and may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares who is in any doubt about his/her position is recommended to consult his/her own professional adviser.

The Directors further propose to increase the authorised share capital of the Company from HK$15 million to HK$100 million by the creation of 8,500,000,000 Shares.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on Tuesday, 15th July, 2003 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares with effect from 9:30 a.m. on Wednesday, 16th July, 2003.

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OPEN OFFER Issue statistics: Basis of the Open Offer

• 4 Offer Shares for every Share held on the Record Date

• – 215,525,638 Shares

Number of existing Shares in issue Minimum number of Offer Shares

• 862,102,552 Offer Shares

Outstanding Convertible Note and Convertible Bonds

existing outstanding Convertible Note and Convertible Bonds which are in aggregate convertible into 40,666,666 Shares at a conversion price of HK$0.5 per Share, subject to adjustment

Maximum number of Offer Shares

assuming full conversion of the Convertible Note and the Convertible Bonds on or before the Record Date, a total of 40,666,666 new Shares may fall to be issued and thus an additional 162,666,664 Offer Shares would be issued. As such, the maximum number of the Offer Shares that may be issued by the Company will be 1,024,769,216 Offer Shares 1,077,628,190 Shares

– Enlarged issued share capital upon completion of the Open Offer assuming no conversion of the Convertible Note and the Convertible Bonds

– Enlarged issued share capital upon 1,280,961,520 Shares completion of the Open Offer assuming full conversion of the Convertible Note and the Convertible Bonds

Qualifying Holders:

The Company will send the Application Forms for Offer Shares to the Qualifying Holders only. To qualify for the Open Offer, Shareholders must at the close of business on the Record Date:

• (i) be registered on the register of members of the Company; and

• (ii) have addresses in Hong Kong on the register of members of the Company.

In order to be registered as members on the Record Date, Shareholders must lodge any transfer of Shares (with the relevant share certificates) with the Registrars, Tengis Limited, at Ground Floor, BEA Harbour View Centre, 56 Gloucester Road, Hong Kong by 4:00 p.m. on Friday, 29th August, 2003.

The invitation to apply for the Offer Shares will not be transferable and there will be no trading in nil-paid entitlements on the Stock Exchange.

Closure of register of members:

The register of members of the Company will be closed from Monday, 1st September, 2003 to Wednesday, 3rd September, 2003, both dates inclusive. No transfer of Shares will be registered during this period.

Subscription Price:

HK$0.06 per Offer Share, payable in full on application. The Subscription Price represents:

• (i) a discount of approximately 62.0% to the closing price of HK$0.158 per Share as quoted on the Stock Exchange on 14th July, 2003 (being the last trading day before the date of this announcement);

• (ii) a discount of approximately 24.6% to the theoretical ex-entitlement price of HK$0.0796 per Share based on the aforesaid closing price per Share;

• (iii) a discount of approximately 64.5% to the average of the closing prices of the Shares for the 10 trading days ended on 14th July, 2003 of approximately HK$0.1688; and

• (iv) a premium of approximately 4.7% to the unaudited consolidated net asset value per Share of the Group as at 30th September, 2002.

The Subscription Price for the Offer Shares has been determined based on arm’s length negotiations between the Company and the Underwriter with reference to prevailing market prices of the Shares. The Directors consider that the terms of the Underwriting Agreement are fair and reasonable and the discount of the Subscription Price as compared to the recent market prices would encourage Shareholders to participate in the Open Offer and the future growth of the Company.

Status of the Offer Shares:

When allotted and issued fully paid, the Offer Shares will rank pari passu in all respects with the existing Shares. Holders of the Offer Shares will be entitled to receive all future dividends and distributions which are declared, made or paid on or after the date of issue of the Offer Shares.

Share Certificates:

Subject to fulfillment of the conditions of the Open Offer, share certificates for fully-paid Offer Shares are expected to be posted at the risk of the Shareholders on or before Friday, 26th September, 2003. No fractional entitlements or allotments are expected to arise as a result of the Open Offer.

Rights of the Excluded Shareholders:

If at the close of business on the Record Date a Shareholder’s address on the Company’s register of members is in a place outside Hong Kong, that Shareholder cannot take part in the Open Offer as documents to be issued in connection with the Open Offer will not be registered under the applicable securities legislation of any jurisdiction other than Hong Kong and Bermuda. The invitation to apply for the Offer Shares to an Excluded Shareholder may, without compliance with specific formalities in the place of residence of such Excluded Shareholder, be unlawful or impracticable. Accordingly, the Excluded Shareholders will not be invited to participate in the Open Offer. The Company will send the Open Offer prospectus to the Excluded Shareholders for their information only. The Company will not send the Application Forms for the Offer Shares to the Excluded Shareholders. The Excluded Shareholders will be entitled to vote at the Special General Meeting to consider, among others, the Open Offer.

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Application for listing:

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Offer Shares. Dealings in the Offer Shares will be subject to the payment of stamp duty in Hong Kong.

UNDERTAKING OF THE CONTROLLING SHAREHOLDER

As at the date of this announcement, Vision Century, the controlling shareholder of the Company, is interested in 156,419,190 Shares representing approximately 72.6% of the existing issued share capital of the Company. Vision Century has irrevocably undertaken to the Company that it will subscribe for the 625,676,760 Offer Shares that it will be entitled to apply for on an assured basis under the Open Offer. Save as the above, none of the Directors or connected persons of the Company (as defined in the Listing Rules) is interested in any Shares at the date of this announcement.

UNDERWRITING AGREEMENT DATED 15TH JULY, 2003

Pursuant to the Underwriting Agreement, the Underwriter has agreed to fully underwrite the Offer Shares not taken up by Vision Century, which will amount to a minimum of 236,425,792 Offer Shares and a maximum of 399,092,456 Offer Shares.

The Underwriter is independent of and not connected with the Company, the directors, chief executive or substantial shareholders of the Company, its subsidiaries or their respective associates.

Commission and other payment:

The Company will pay to the Underwriter an underwriting commission at 2.5% of the aggregate Subscription Price of the actual number of the Offer Shares to be underwritten by the Underwriter as determined on the Record Date. The underwriting commission will range from approximately HK$0.35 million to approximately HK$0.60 million.

Termination of the Underwriting Agreement:

Shareholders should note that the Underwriting Agreement contains provisions granting the Underwriter the right, which may be exercised at any time prior to 4:00 p.m. on the third business day after 18th September, 2003, to terminate its obligations thereunder on the occurrence of certain events, including force majeure, or where there is a material breach of any of the obligations and undertakings by the Company contained in the Underwriting Agreement, or the representations or warranties by the Company contained in the Underwriting Agreement being untrue or inaccurate, which, in each case, will have a material and adverse effect on the business, financial or trading position or prospects of the Group, or is otherwise likely to have a materially prejudicial effect on the Open Offer or where the Company fail to clarify any information at the Underwriter’s request for the purpose of preventing the creation of a false market in the securities of the Company, on or before 4:00 p.m. on the third business day following the last day for application and payment for the Offer Shares under the Open Offer. For this purpose, force majeure refers to the introduction of any new law or regulation or any change in existing law or regulation (or the judicial interpretation thereof); or the occurrence of any local, national, international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic or currency (including a change in the system under which the value of the Hong Kong currency is linked to the currency of the United States of America) or other nature (whether ejusdem generis with any of the foregoing), or of the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities market which may, in the reasonable opinion of the Underwriter, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or the success of the Open Offer or make it inadvisable or inexpedient to proceed with the Open Offer. If the Underwriter exercises such right to terminate its obligations under the Underwriting Agreement, the Open Offer will not proceed.

CONDITIONS OF THE UNDERWRITING AGREEMENT

The Underwriting Agreement is conditional, among other things, on the following conditions being fulfilled:

• (i) the Independent Shareholders approving the Open Offer at the Special General Meeting;

• (ii) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked listing of, and permission to deal in, the Offer Shares;

• (iii) the delivery to the Stock Exchange and the registration with the Registrar of Companies in Hong Kong one copy of the Open Offer prospectus and the Application Form each duly certified in compliance with section 342C of the Companies Ordinance (and all other documents required to be attached thereto) and otherwise complying with the requirements of the Companies Ordinance and the Listing Rules and the filing of one copy of the Open Offer prospectus and the Application Form each duly signed by or on behalf of the Directors with the Registrar of Companies in Bermuda in compliance with requirements of the Companies Act; and

• (iv) the Open Offer prospectus and the Application Forms being duly approved by the Directors, delivered to the Underwriter and despatched to the Shareholders.

If the conditions to the Underwriting Agreement are not fulfilled or waived on the dates as specified in the Underwriting Agreement (or such later date or dates as the Underwriter may agree with the Company in accordance with its terms), or if the Underwriting Agreement shall be terminated as described above, the obligations and liabilities of the parties shall cease and determine. The Open Offer is subject to the Underwriting Agreement becoming unconditional and not being terminated in accordance with its terms.

WARNING OF THE RISKS OF DEALING IN SHARES

Existing Shares will be dealt with on an ex-entitlements basis from Thursday, 28th August, 2003. If the Underwriter terminates the Underwriting Agreement, or the conditions of the Underwriting Agreement are not fulfilled or waived, the Open Offer will not proceed.

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Shareholders should note that the Shares will be dealt with on an ex-entitlements basis commencing from Thursday, 28th August, 2003 and that dealings in such Shares will take place whilst the conditions to which the Underwriting Agreement is subject remain unfulfilled. Any Shareholder or other person dealing in such Shares up to the date on which all conditions to which the Open Offer is subject are fulfilled (which is expected to be Tuesday, 23rd September, 2003), will accordingly bear the risk that the Open Offer cannot become unconditional and may not proceed. Any Shareholders or other persons contemplating selling or purchasing Shares who is in any doubt about his/her position is recommended to consult his/her own professional adviser. Expected timetable:

2003

Last day of dealings in Shares cum-entitlements to the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 27th August Commencement of dealings in Shares ex-entitlements to the Open Offer . . . . . . . . . . . . . . . . . . . . . . Thursday, 28th August Latest time for lodging transfers of Shares in order to be entitled to the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 29th August Latest time for lodging forms of proxy for the purpose of the Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 1st September Book closure period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 1st September to Wednesday, 3rd September Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 3rd September Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Wednesday, 3rd September Prospectus and the Application Forms to be posted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 3rd September Register of members to be reopened . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 4th September Latest time for application for Offer Shares and payment . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Thursday, 18th September Underwriting Agreement becomes unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 23rd September Announcement of the results of the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 24th September Share certificates for Offer Shares to be posted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 26th September

Dates of deadlines stated in this announcement for events in the timetable for (or otherwise in relation to) the Open Offer are indicative only and may be extended or varied by agreement between the Company and the Underwriter. Any changes to the anticipated timetable for the Open Offer will be announced as appropriate.

SHAREHOLDING IN THE COMPANY

SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY	SHAREHOLDING IN THE COMPANY
The following is a summary of the shareholding of the Company before and after the completion of the								Open Offer:
Shareholders	Prior to the Open Offer			Upon completion	of the Open	Offer
		Assuming no conversion		of the Convertible Bonds		Assuming full conversion of the Convertible Bonds
			and the Convertible Note				and the Convertible Note
				Number of Shares held and respective percentage
Vision Century	156,419,190	782,095,950	72.6%	782,095,950	72.6%	782,095,950	61.1%	782,095,950	61.1%
The Underwriter	0	0	0%	236,425,792	21.9%	0	0%	399,092,456	31.1%
Independent Shareholders	59,106,448	295,532,240	27.4%	59,106,448	5.5%	498,865,570	38.9%	99,773,114	7.8%
Total	215,525,638	1,077,628,190	100.0%	1,077,628,190	100.0%	1,280,961,520	100.0%	1,280,961,520	100.0%
		(Note a)		(Note b)		(Note a)		(Note b)

Notes:

(a) Assuming that all Independent Shareholders take up their entitlements under the Open Offer.

(b) Assuming no Independent Shareholders take up their entitlements under the Open Offer and all the underwritten Offer Shares taken up by the Underwriter.

Pursuant to the Underwriting Agreement, the Underwriter undertakes to the Company to procure independent placees to purchase Shares as may be necessary to ensure that at completion of the Open Offer not less than 25% of the Shares are held by the public as required under the Listing Rules.

In addition, the Underwriter has stated that any independent placees procured will be selected on the basis that they are not acting in concert with the Company, Vision Century, the Underwriter (and parties acting in concert with it) and their respective associates, so as to ensure that the Underwriter and its associates will not incur any obligation under the Hong Kong Code on Takeovers and Mergers to make a general offer for the Shares as a result of fulfilling its obligations under the Underwriting Agreement.

Depending on the extent to which entitlements under the Open Offer is taken up by the Shareholders and the procurement of independent placees by the Underwriter as mentioned above, new substantial shareholders of the Company may arise. Further announcement will be made if any new substantial Shareholder arises as a result of the Open Offer.

REASONS FOR THE OPEN OFFER AND USE OF PROCEEDS

The principal activities of the Group are the design, manufacture and sale of a wide range of toys. For the year ended 31st March, 2002, the Group incurred an audited consolidated net loss of approximately HK$59.3 million. For the six months ended 30th September, 2002, the Group recorded an unaudited net profit of approximately HK$60.8 million mainly representing the gain arising from the waiving of debts by various banks and financial institutions of approximately HK$77.1 million and a number of other creditors of the Group through a debt restructuring completed in May 2002. In May 2002, the Group completed a restructuring proposal involving, among others (i) the issue of new Shares to Vision Century to raise approximately HK$30 million; and (ii) a three for two open offer to raise approximately HK$40.3 million. The Directors are of the view that with the recently improving equity market conditions, it is in the interest of the Company to raise equity capital to strengthen the Group’s financial position and enlarge its capital base.

Net proceeds of the Open Offer of approximately HK$49.7 million is intended to be applied as to approximately HK$32.0 million for the repayment of the liabilities outstanding (including the Convertible Note, the Convertible Bonds and other liabilities of the Group) and as to the remainder of approximately HK$17.7 million for general working capital of the Group. The Group has yet to decide the proportion for the repayment of the Convertible Note, the Convertible Bonds and other liabilities of the Group. The Directors believe that the Open Offer is in the interests of the Group and the Shareholders given that the Open Offer will increase the asset base of the Group and provide it with additional working capital.

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FUND RAISING ACTIVITIES IN PAST TWELVE MONTHS

In May 2002, the Group has completed a restructuring proposal involving:

• (i) the subscription of an equivalent of 60,000,000 Shares at HK$0.5 per Share by Vision Century at an aggregate subscription price of HK$30 million;

• (ii) the three for two open offer of an equivalent of 80,518,102 Shares at HK$0.5 per Share to raise HK$40.3 million; and

• (iii) the release and discharge by certain banks of all claims and other monies owed by the Group. The number of Shares and the share price above have been adjusted for the share consolidation of fifty shares into one share completed in December 2002.

The net proceeds raised for the Company from the restructuring proposal as mentioned above were approximately HK$63.5 million. As stated in the circular of the Company dated 26th April, 2002 in relation to the restructuring proposal, the intended use of proceeds was as to approximately HK$20 million to repay bank loans and as to the remainder as working capital and/or repay outstanding liabilities of the Group. As at the date of this announcement, approximately HK$20 million of the proceeds were applied to repay bank loans and as to the remainder was used for working capital purpose and/or repaying outstanding liabilities of the Group.

INCREASE IN AUTHORISED SHARE CAPITAL

The Directors further propose to increase the authorised share capital of the Company from HK$15 million to HK$100 million by the creation of 8,500,000,000 Shares. The increase in authorised share capital of the Company is not interconditional with the Open Offer.

SPECIAL GENERAL MEETING

The Special General Meeting will be held to consider and, if thought appropriate, approve, among others, the Open Offer and the increase in authorised share capital. Vision Century, being the controlling shareholder of the Company and its associates, will abstain from voting on the resolution in relation to the Open Offer.

ADJUSTMENT OF CONVERSION PRICE OF THE CONVERTIBLE NOTE AND THE CONVERTIBLE BONDS

Subject to the Open Offer becoming unconditional, the conversion price of the Convertible Note and Convertible Bonds may be required to be adjusted in accordance with their terms as a result of the Open Offer. A further announcement will be made by the Company relating to any required adjustment following the determination of the number of the Offer Shares.

RESUMPTION OF TRADING IN SHARES

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on Tuesday, 15th July, 2003 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares with effect from 9:30 a.m. on Wednesday, 16th July, 2003.

GENERAL

An independent board committee will be established to consider the terms of the Open Offer and advise the Independent Shareholders accordingly. An independent financial adviser has been appointed to give an opinion to the independent board committee in this respect. A circular containing details of the Open Offer, financial and other information on the Group, a letter of advice prepared by the aforesaid independent financial adviser to the independent board committee on the Open Offer and the notice of the Special General Meeting will be sent to the Shareholders as soon as possible. The Open Offer prospectus containing details of the Open Offer will be despatched to the Qualifying Holders and, for information only, to the Excluded Shareholders.

TERMS USED IN THIS ANNOUNCEMENT

In this announcement, the following terms have the following meanings:

“Application Form(s)”	application form(s) for the Offer Shares
“associate(s)”	has the meaning given to it in the Listing Rules
“Companies Act”	The Companies Act 1981 of Bermuda
“Companies Ordinance”	the Companies Ordinance (Chapter 32 of the laws of Hong Kong)
“Company”	Xin Corporation Limited, a company incorporated in Bermuda with its shares listed on
	the Stock Exchange
“Convertible Bonds”	5% convertible bonds of the Company in an aggregate outstanding principal amount of
	HK$4,333,333, which are repayable by the remaining two equal installments over two years up to May 2005 or convertible into Shares at a conversion price of HK$0.5 per
	Share
“Convertible Note”	3% convertible note of the Company in the aggregate principal amount of HK$16
	million, which is repayable in July 2004 or convertible into Shares at a conversion
	price of HK$0.5 per Share
“Directors”	directors of the Company
“Excluded Shareholders”	Shareholders other than Qualifying Holders
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars
“Independent Shareholders”	Shareholders other than Vision Century and its associates
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Offer Share(s)”	the new Share(s) proposed to be offered to the Qualifying Holders to subscribe for
	pursuant to the Open Offer
“Open Offer”	the proposed issue of the Offer Shares by way of open offer to the Qualifying Holders
	on the terms to be set out in the Open Offer prospectus and the Application Form and
	summarised herein
“Qualifying Holders”	Shareholders who, at the close of business on the Record Date, have addresses in Hong
	Kong on the register of members of the Company

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“Record Date” 3rd September, 2003, being the date by reference to which entitlements under the Open Offer will be determined “Registrars” the Company’s branch share registrar in Hong Kong “Shareholder(s)” holder(s) of Shares “Shares” shares of HK$0.01 each in the capital of the Company “Special General Meeting” a special general meeting of the Company to be convened to approve, among others, the Open Offer and the increase in authorised share capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Subscription Price” the subscription price of HK$0.06 per Offer Share pursuant to the Open Offer “Underwriter” Kingston Securities Limited, a licensed corporation to carry on business in types 1, 4, 6, 7 and 9 regulated activities (dealing in securities, advising on securities and corporate finance, providing automated trading services and asset management) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “Underwriting Agreement” the underwriting agreement dated 15th July, 2003 entered into between the Underwriter, the Company and Vision Century in relation to the underwriting of the Open Offer “Vision Century” Vision Century Group Limited, a company incorporated in the British Virgin Islands, the controlling shareholder of the Company

By Order of the Board Lo Ming Chi, Charles Chairman

Hong Kong, 15th July, 2003

* For identification purpose only

Please also refer to the published version of this announcement in The Standard.

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