Snack Empire Holdings Limited — Proxy Solicitation & Information Statement 2005

Apr 28, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Shanghai Zendai Property Limited, you should at once hand this circular and the accompanying proxy form to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this 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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SHANGHAI ZENDAI PROPERTY LIMITED

*

(Incorporated in Bermuda with limited liability)

(Stock Code: 755)

PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

AND

PROPOSED AMENDMENTS TO THE BYE-LAWS

AND PROPOSED RE-ELECTION OF DIRECTORS

A notice convening an annual general meeting of Shanghai Zendai Property Limited to be held at Unit 6108, The Center, 99 Queen’s Road Central, Hong Kong on Wednesday, 25 May 2005 at 3:00 p.m., is set out on pages 11 to 15 of this circular. A form of proxy is also enclosed. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the office of the Company’s Hong Kong branch share registrars, Secretaries Limited, at Ground Floor, BEA 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 the holding of the meeting. Completion and return of the form of proxy will not prevent shareholders from subsequently attending and voting at the annual general meeting if they so wish.

• for identification purpose only

27 April 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General mandates to issue and repurchase Shares . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed amendments to the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed Directors for re-election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Document available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix – Explanatory statement of Proposed Repurchase Mandate . . . . . . . .	8
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

−i −

DEFINITIONS

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

“Annual General Meeting”

the annual general meeting of the Company to be held at Unit 6108, The Center, 99 Queen’s Road Central, Hong Kong on Wednesday, 25 May 2005 at 3:00 p.m., the notice of which is set out on pages 11 to 15 of this circular, or any adjournment thereof

“Board”	the board of Directors
“Bye-laws”	bye-laws of the Company
“Code”	the Hong Kong Code on Takeovers and Mergers
“Company”	Shanghai Zendai Property Limited, an exempted
	company incorporated in Bermuda with limited liability,
	the Shares of which are listed on the Stock Exchange
“Companies Act”	the Companies Act 1981 of Bermuda (as amended)
“Directors”	the directors of the Company
“Existing Issue Mandate”	a general mandate granted to the Directors at the annual
	general meeting of the Company held on 18 May 2004 to
	allot, issue and deal with Shares not exceeding 20 per
	cent. of the aggregate nominal value of the share capital
	of the Company in issue as at 18 May 2004
“Existing Repurchase Mandate”	a general mandate granted to the Directors at the annual
	general meeting of the Company held on 18 May 2004 to
	repurchase Shares not exceeding 10 per cent. of the
	nominal value of share capital of the Company in issue as
	at 18 May 2004
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency in Hong Kong
“Hong Kong”	The Hong Kong Special Administrative Region of the
	People’s Republic of China

−1 −

DEFINITIONS

“Latest Practicable Date”	22 April 2005, being the latest practicable date for
	ascertaining certain information referred to herein prior
	to the printing of this circular
“Listing Rules”	The Rules Governing the Listing of Securities on the
	Stock Exchange
“Proposed Repurchase Mandate”	a general mandate proposed to be granted to the Directors
	at the Annual General Meeting to repurchase Shares not
	exceeding 10 per cent. of the aggregate nominal value of
	the issued share capital of the Company as at the date of
	passing of relevant resolution granting the Proposed
	Repurchase Mandate
“Registrars”	the Company’s branch share registrars in Hong Kong,
	Secretaries Limited, Ground Floor, BEA Harbour View
	Centre, 56 Gloucester Road, Wanchai, Hong Kong
“Retiring Directors”	Mr. Ma Chi Kui Sandroff, Mr. Lo Mun Lam Raymond
	and Mr. Zhu Nansong
“Shares”	ordinary shares of HK$0.02 each in the capital of the
	Company
“Shareholder(s)”	registered holder(s) of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

−2 −

LETTER FROM THE BOARD

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SHANGHAI ZENDAI PROPERTY LIMITED

---

(Incorporated in Bermuda with limited liability)

Executive Directors: DAI Zhikang ZHU Nansong ZHANG Wei ZHAO Hangsheng TANG Jian

Independent non-executive Directors: LO Mun Lam Raymond LAI Chik Fan MA Chi Kui Sandroff

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Principal place of business in Hong Kong: Unit 6108, The Center 99 Queen’s Road Central Hong Kong

27 April 2005

To the Shareholders and, for information only, holders of convertible notes of the Company

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND PROPOSED AMENDMENTS TO THE BYE-LAWS AND PROPOSED RE-ELECTION OF DIRECTORS

INTRODUCTION

The purpose of this circular is to provide the Shareholders with information of the resolutions to be proposed at the Annual General Meeting for the approval of (a) granting to the Directors a general mandate to allot, issue and deal with Shares of up to 20 per cent. of the aggregate nominal value of the share capital of the Company in issue at the date of passing the relevant resolution granting this mandate; (b) granting to the Directors the Proposed Repurchase Mandate; (c) extending the general mandate to issue Shares by adding to it the aggregate nominal value of the issued Shares repurchased under the Proposed Repurchase Mandate; (d) proposed amendments to the Bye-laws; and (e) re-electing the Retiring Directors.

• for identification purpose only

−3 −

LETTER FROM THE BOARD

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the annual general meeting of the Company held on 18 May 2004, ordinary resolutions were passed granting the Existing Issue Mandate and the Existing Repurchase Mandate to the Directors.

In accordance with the provisions of the Listing Rules and the terms of the Existing Issue Mandate and the Existing Repurchase Mandate, the Existing Issue Mandate and the Existing Repurchase Mandate shall lapse if, among other matters, they are revoked or varied by ordinary resolution of the Shareholders in general meeting.

Resolutions set out as resolutions 4A(d) and 4B(c) in the notice of the Annual General Meeting will be proposed at the Annual General Meeting to revoke the Existing Issue Mandate and the Existing Repurchase Mandate respectively. New general mandate to allot, issue and deal with Shares of up to 20 per cent. of the aggregate nominal value of the share capital of the Company in issue at the date of passing the relevant resolution granting this mandate and the Proposed Repurchase Mandate as set out in resolutions 4A(a), (b), (c) and (e) and resolutions 4B(a), (b) and (d) will also be proposed at the Annual General Meeting. With reference to the proposed new general mandates, the Directors wish to state that they have no immediate plans to issue or repurchase any Shares pursuant to the relevant mandates.

An explanatory statement required by the Listing Rules to be sent to the Shareholders in connection with the Proposed Repurchase Mandate is set out in the Appendix to this circular. The explanatory statement contains all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the relevant resolutions at the Annual General Meeting.

PROPOSED AMENDMENTS TO THE BYE-LAWS

The Stock Exchange has revised the Listing Rules concerning various corporate governance issues. The Board considers that changes to the Bye-laws should be made in line with the changes required under the revised Listing Rules. As such, amendments to the Bye-laws will be proposed at the Annual General Meeting and the full details of which are set out in resolution 5 in the notice of the Annual General Meeting set out on pages 11 to 15 of this circular.

PROPOSED DIRECTORS FOR RE-ELECTION

According to Bye-law 86(2), Mr. Ma Chi Kui Sandroff shall hold office only until the Annual General Meeting and shall then be eligible for re-election at that meeting. According to Bye-law 87(2), Mr. Lo Mun Lam Raymond and Mr. Zhu Nansong shall retire from office by rotation and then be eligible for re-election at the Annual General Meeting.

−4 −

LETTER FROM THE BOARD

Brief biography of each of the Retiring Directors to be re-elected at the Annual General Meeting are set out below:

Mr. ZHU Nansong , aged 38, joined the Board in May 2003 as Executive Director. Mr. Zhu graduated from (Renmin University of China) and (The People’s Bank of China Graduate Research Department). He was responsible for the development of the Shanghai Securities Business Department of (Hui Tong International Trust and Investment Company). Mr. Zhu participated in the incorporation of (Shanghai Zendai Investment Management Company Limited) in 1993 and has since been its general manager to present. Mr. Zhu has been a director of (the securities of which are listed on the Shanghai Stock Exchange of the People’s Republic of China) from August 2004.

Mr. LO Mun Lam Raymond , aged 52, is the managing partner and a responsible officer of an investment advisory and assets management firm based in Hong Kong. He has previously served in many multi-disciplinary listed and major companies as an advisor, director and financial strategist. He is a member of the Counselors of Real Estate, a professional membership organization in the United States established exclusively for leading real estate advisors. He is also a fellow member of the Institute of Chartered Accountants in England & Wales, a member of the Institute of Chartered Accountants of Ontario, Canada and a member of the Hotel & Catering International Management Association of the United Kingdom. Mr. Lo was a non-executive director and deputy chairman of Gorient Holdings Limited (the securities of which are listed on the main board of the Stock Exchange) from December 2002 to March 2005. He has been an independent non-executive director of Luk Fook Holdings (International) Limited (the securities of which are listed on the main board of the Stock Exchange) from September 2004 and a non-executive director of Asian Information Resources (Holdings) Limited (the securities of which are listed on the Growth Enterprise Market of the Stock Exchange) from June 2001.

Mr. MA Chi Kui Sandroff , aged 48, graduated from McGill University, Canada with a degree in bachelor of commerce and from The University of Hong Kong with a degree in master of business administration. Mr. Ma Chi Kui Sandroff is a member of the Hong Kong Article Numbering Association. Mr. Ma Chi Kui Sandroff has over ten years of experience in a well-established conglomerate in Hong Kong with direct involvement in information technology business development. Mr. Ma did not hold any directorship in other listed companies in the past three years.

As at the Latest Practicable Date, none of the Retiring Directors had any interest in the Shares within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) or had any relationship with any other Directors, senior management, substantial or controlling Shareholders. There is no service contract between the Company and any of the Retiring Directors. The emoluments of the Directors are determined by the Board with reference to the Company’s performance and profitability and the prevailing

−5 −

LETTER FROM THE BOARD

market conditions. The aggregate emoluments paid to the Retiring Directors for the year ended 31 December 2004 were approximately HK$160,000: (i) no emolument was paid to Mr. Zhu Nansong; (ii) approximately HK$137,000 was paid to Mr. Lo Mun Lam Raymond; and (iii) approximately HK$26,000 was paid to Mr. Ma Chi Kui Sandroff.

Save as disclosed in this circular, there is no other matter in relation to the re-election of Directors that need to be brought to the attention of the Shareholders.

ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of the Company to be held at Unit 6108, The Center, 99 Queen’s Road Central Hong Kong on Wednesday, 25 May 2005 at 3:00 p.m. is set out on pages 11 to 15 of this circular.

There is enclosed a form of proxy for use at the Annual General Meeting. Whether or not the Shareholders intend to be present at the Annual General Meeting, they are requested to complete the form of proxy and return it to the office of the Company’s branch share registrars in Hong Kong, Secretaries Limited, at Ground Floor, BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the holding of the Annual General Meeting. Completion and delivery of the form of proxy will not prevent the Shareholders from attending, and voting at the Annual General Meeting if they so wish.

Pursuant to the Bye-laws, a poll may be demanded in relation to any resolution put to the vote of the Annual General Meeting 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) by the chairman of the meeting; or

• (b) by at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by any 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 representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

• (d) by any Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and holding shares in the Company conferring a right to attend and 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.

−6 −

LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the proposed resolutions for (i) granting the Directors a general mandate to allot, issue and deal with Shares of up to 20 per cent. of the aggregate nominal value of the share capital of the Company in issue as at the date of passing the relevant resolution granting this mandate; (ii) granting the Directors the Proposed Repurchase Mandate; (iii) the proposed amendments to the Bye-laws; and (iv) the proposed re-election of Directors are in the interests of the Group as a whole. The Directors therefore recommend the Shareholders to vote in favour of all the resolutions as set out in the notice of the Annual General Meeting.

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.

DOCUMENT AVAILABLE FOR INSPECTION

Copy of the Bye-laws is available for inspection at the principal place of business of the Company at Unit 6108, The Center, 99 Queen’s Road Central, Hong Kong during normal business hours from the date of this circular up to and including 19 May 2005.

GENERAL INFORMATION

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

Yours faithfully, for and on behalf of the Board Dai Zhikang Chairman

−7 −

EXPLANATORY STATEMENT OF PROPOSED REPURCHASE MANDATE

APPENDIX

This Appendix contains the particulars that are required by the Listing Rules to be included in an explanatory statement to enable the Shareholders to make an informed view on whether to vote for or against the resolution to be proposed at the Annual General Meeting in relation to the Proposed Repurchase Mandate.

LISTING RULES FOR REPURCHASE OF SHARES

The relevant sections of the Listing Rules which permit companies with primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange are summarized below:

SOURCE OF FUNDS

Repurchases must be funded out of fund legally available for the purpose and in accordance with the company’s constitutive documents and the laws of the jurisdiction in which the company is incorporated or otherwise established.

SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 4,622,887,558 Shares. Subject to the passing of the resolution granting the Proposed Repurchase Mandate and on the basis that no further Shares will be issued or repurchased before the Annual General Meeting, the Company will be allowed to repurchase a maximum of 462,288,755 Shares during the period ending on the earlier of the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required to be held by law or the date upon which such authority is revoked or varied by a resolution of the Shareholders in general meeting.

REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders to seek a general authority from the Shareholders to enable the Company to repurchase the Shares on the Stock Exchange. 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 earnings per shares and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

The Directors have no present intention to repurchase any Shares and they would only exercise the power to repurchase in circumstances where they consider that the repurchase would be in the best interests of the Company. The Directors consider that there may be adverse impact on the working capital or gearing position of the Company, as compared with the positions disclosed in the audited accounts contained in the annual report of the Company for the financial year ended 31 December 2004, in the event that the proposed securities repurchases were to be carried out in full at any time during the proposed repurchase period.

−8 −

EXPLANATORY STATEMENT OF PROPOSED REPURCHASE MANDATE

APPENDIX

The Directors do not propose to exercise the mandate to repurchase Shares to such extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

SHARE PRICES

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the twelve months immediately preceding the Latest Practicable Date:

	Highest trading	Lowest trading
Month	price per Share	price per Share
	$	$
2004
May	0.145	0.108
June	0.140	0.104
July	0.128	0.108
August	0.113	0.101
September	0.125	0.097
October	0.130	0.119
November	0.209	0.110
December	0.265	0.184
2005
January	0.265	0.198
February	0.275	0.249
March	0.250	0.156
April (up to the Latest Practicable Date)	0.198	0.160

GENERAL

As at the Latest Practicable Date, to the best of their knowledge, having made all reasonable enquiries, none of the Directors nor any of their associates (as defined in the Listing Rules) intended to sell any Shares to the Company or its subsidiaries in the event that the Proposed Repurchase Mandate is approved.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Proposed Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

−9 −

EXPLANATORY STATEMENT OF PROPOSED REPURCHASE MANDATE

APPENDIX

As at the Latest Practicable Date, no connected person (as defined in the Listing Rules) has notified the Company that he had an intention to sell any Shares to the Company, or had undertaken not to do so, in the event that the Proposed Repurchase Mandate is approved.

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 purposes of the Code. Accordingly, a Shareholder, or group of Shareholders acting in concert (as defined in the Code), depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Code.

As at the Latest Practicable Date and so far as was known to the Directors, Mr. Dai Zhikang, an executive Director and the parties acting in concert (as defined in the Code) with him were interested in a total of 2,525,075,000 Shares, representing approximately 54.62% of the issued share capital of the Company. On the basis that no further Shares will be issued or repurchased after the Latest Practicable Date, in the event that the Directors exercise the Proposed Repurchase Mandate in full, the shareholdings of Mr. Dai Zhikang and the parties acting in concert (as defined in the Code) with him in the Company would be increased to approximately 60.70% of the entire issued share capital of the Company as reduced by the exercise of the Proposed Repurchase Mandate in full. Mr. Dai Zhikang would not be required under Rule 26 of the Code to make a mandatory offer pursuant to such increase. The Directors have no present intention to exercise in full the power to repurchase shares proposed to be granted pursuant to the Proposed General Mandate.

The Listing Rules prohibit a company from making repurchase on the Stock Exchange if the result of the repurchase would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the issued share capital of such company would be in public hands. The Directors do not propose to repurchase Shares which would result in less than the prescribed minimum percentage of Shares being held in public hands.

During the six months immediately preceding the Latest Practicable Date, the Company has made the following repurchases of Shares on the Stock Exchange:

		Highest	Lowest
	No. of Shares	price per	price per
Date of repurchase	repurchased	Share	Share
14 September 2004	6,895,000	HK$0.106	HK$0.103
15 September 2004	1,000,000	HK$0.104	–

Save as disclosed above, the Company had not repurchased any Shares on the Stock Exchange during the six months immediately preceding the Latest Practicable Date.

−10 −

NOTICE OF ANNUAL GENERAL MEETING

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SHANGHAI ZENDAI PROPERTY LIMITED

*

(Incorporated in Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that an annual general meeting of Shanghai Zendai Property Limited (the “ Company ”) will be held at Unit 6108, The Center, 99 Queen’s Road, Hong Kong on Wednesday, 25 May 2005, at 3:00 p.m., for the following purposes:

1. To receive and adopt the audited financial statements and the reports of the directors and auditors for the year ended 31 December 2004;

2. To re-elect directors and to fix the remuneration of directors;

3. To re-appoint KLL Associates CPA Limited, certified public accountants, as the auditors of the Company and to authorize the directors to fix their remuneration;

4. As special business, to consider and, if thought fit, pass, with or without modification, the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

• A. “ THAT :

• (a) subject to paragraph (c) below, the exercise by the directors of the Company (“ Directors ”) during the Relevant Period of all the powers of the Company to allot, issue and otherwise deal with additional shares of the Company (“ Shares ”) or securities convertible into Shares, or options, warrants or similar rights to subscribe for any Shares, and to make or grant offers, agreements and options which might require the exercise of such power be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall be in addition to any other authorisations given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period;

* for identification purpose only

−11 −

NOTICE OF ANNUAL GENERAL MEETING

• (c) the aggregate nominal value of the 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);

• (ii) the exercise of rights of subscription or conversion under terms of any warrants issued by the Company or any securities which are convertible into Shares;

• (iii) the exercise of any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of Shares or right to acquire Shares; and

• (iv) any scrip dividend or similar arrangements providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the bye-laws of the Company;

shall not exceed 20 per cent. of the aggregate nominal value of the share capital of the Company in issue as at the date of passing of this Resolution and the said approval shall be limited accordingly;

• (d) subject to the passing of each of the paragraphs (a), (b) and (c) of this Resolution, any prior approvals of the kind referred to in paragraphs (a), (b) and (c) of this Resolution which had been granted to the Directors and which are still in effect be and are hereby revoked; and

• (e) for the purpose 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 law or the bye-laws of the Company to be held; or

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

−12 −

NOTICE OF ANNUAL GENERAL MEETING

“ Rights Issue ” means the allotment, issue or grant of Shares pursuant to an offer of Shares open for a period fixed by the Directors to holders of Shares or any class thereof on the register on a fixed record date in proportion to their then holdings of such Shares or class thereof (subject to such exclusion 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).”

• B. “ THAT :

• (a) subject to paragraph (b) below, the exercise by the directors of the Company (“ Directors ”) during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase the shares of the Company (“ Shares ”) on The Stock Exchange of Hong Kong Limited or on any other stock exchange on which the Shares may be listed and recognized for this purpose by the Securities and Futures Commission and The Stock Exchange of Hong Kong Limited under the Hong Kong Code on Share Repurchases, and subject to and in accordance with all applicable laws and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal value of Shares which may be repurchased pursuant to the approval in paragraph (a) above shall not exceed 10 per cent. of the aggregate nominal value of the share capital of the Company in issue as at the date of passing of this Resolution and the said approval shall be limited accordingly;

• (c) subject to the passing of each of the paragraphs (a) and (b) of this Resolution, any prior approvals of the kind referred to in paragraphs (a) and (b) of this Resolution which had been granted to the Directors and which are still in effect be and are hereby revoked; and

• (d) for the purpose 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 law or the bye-laws of the Company to be held; or

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

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NOTICE OF ANNUAL GENERAL MEETING

• C. “ THAT conditional upon the passing of the Resolutions A and B as set out in the notice of this meeting, the general mandate granted to the directors of the Company (“ Directors ”) to exercise the powers of the Company to allot, issue and otherwise deal with shares of the Company pursuant to Resolution A above be and is hereby extended by the addition to the aggregate nominal value of the share capital of the Company which may be allotted by the Directors pursuant to such general mandate an amount representing the aggregate nominal value of the share capital of the Company repurchased by the Company under the authority granted pursuant to Resolution B above, provided that such amount shall not exceed 10 per cent. of the aggregate nominal value of the share capital of the Company in issue as at the date of passing of this Resolution.”

• As special business, to consider and, if thought fit, pass, with or without modification, the following resolution as a special resolution of the Company:

SPECIAL RESOLUTION

• “ THAT the existing Bye-laws of the Company be and are hereby amended as follows:

By deleting the existing Bye-law 87(1) and substituting therefor the following:

At each annual general meeting, one-third of the directors for the time being (or if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation, provided that every Director (including those appointed for a specific term) shall be subject to retirement by rotation at least once every three years.”

By order of the Board Dai Zhikang Chairman

Hong Kong, 27 April 2005

Registered office:

Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal place of business

in Hong Kong:

Unit 6108, The Center 99 Queen’s Road Central Hong Kong

−14 −

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and, vote instead of him. A proxy need not be a member of the Company.

2. To be valid, a form of proxy and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power of attorney or authority must be deposited at the Company’s branch share registrar in Hong Kong, Secretaries Limited at Ground Floor, BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not less than 48 hours before the time fixed for the holding of the meeting or any adjournment(s) thereof.

3. Where there are joint holders of a share of the Company, any one of such holders may vote at the 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 holders be present at the meeting personally or by proxy, that one of such holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

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