SPT Energy Group Inc. — Proxy Solicitation & Information Statement 2002

May 6, 2002

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Wing Shan International Limited , you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or to the transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the 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.

WING SHAN INTERNATIONAL LIMITED 榮山國際有限公司

(Incorporated in Hong Kong with limited liability)

PROPOSALS FOR

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

A notice convening an extraordinary general meeting of Wing Shan International Limited to be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 22 May 2002 at 10:15 a.m. (or as soon thereafter as the annual general meeting of the Company convened on the same day and at the same place shall have been concluded or adjourned) is set out on pages 15 to 18 of this circular.

Whether or not you propose to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to Wing Shan International Limited at its registered office in Hong Kong at Room 2105-8, Wing Shan Tower, 173 Des Voeux Road Central, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting should you so wish.

29 April, 2002

CONTENTS

		Pages
Responsibility statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		2-3
Letter from the Board
1.	Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2.	Termination of the Existing Scheme and adoption of the Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Conditions precedent of the Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4.	Explanation of the terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	Value of the Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6.	General Mandate to repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7.	General Mandate to issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
8.	Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
9.	Action to be taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
10.	Document available for inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
11.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
12.	Application for listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix	I – Summary of the Principal Terms of the Scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8-12
Appendix	II – Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13-14
Notice of the Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15-18

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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 not contained in this circular, the omission of which would make any statement herein misleading.

– 1 –

DEFINITIONS

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

“Adoption Date”	means 22 May 2002 (the date on which the Scheme is conditionally adopted by resolution
	of the Company in general meeting);
“Auditor(s)”	means the auditors for the time being of the Company;
“Board”	means the board of directors of the Company or a duly authorised committee thereof for
	the time being;
“Business Day”	means a day (other than a Saturday or Sunday) on which licensed banks are generally open
	for business in Hong Kong and the Stock Exchange is open for business of dealing in
	securities;
“Company”	means Wing Shan International Limited, a company incorporated in Hong Kong with
	limited liability and the Shares of which are listed on the Stock Exchange;
“Companies Ordinance”	means Companies Ordinance, Chapter 32 of the Laws of Hong Kong;
“Directors”	means the directors of the Company for the time being;
“EGM”	means the extraordinary general meeting of the Company to be held on 22 May 2002 at
	10:15 a.m. (or so soon thereafter as the annual general meeting of the Company convened
	on the same day and at the same place shall have been concluded or adjourned);
“EGM Notice”	means the notice convening the EGM as set out on pages 15 to 18 of this circular;
“Existing Scheme”	means the share option scheme for the employees (including any director) of the Company
	and its subsidiaries which was adopted by the Company at its general meeting on 16 March
	1993;
“Grant Date”	means the date on which an Option is granted to a Participant, which shall be deemed to be
	the date on which the Offer is made to such a Participant, which date must be a Business
	Day;
“Grantee”	means any Participant who accepts an offer in accordance with the terms of the Scheme or
	(where the context so permits) a legal personal representative(s) entitled to any such
	Option in consequence of the death of the original Grantee;
“Group”	means the Company, its subsidiaries and/or its associated companies from time to time;
“Hong Kong”	means the Hong Kong Special Administrative Region of the People’s Republic of China;
“Latest Practicable Date”	means 24 April 2002, being the latest practicable date prior to the printing of this circular
	for the purpose of ascertaining certain information for inclusion in this circular;
“Listing Rules”	means the Rules Governing the Listing of Securities on the Stock Exchange;
“Offer”	means the offer of the grant of an Option made by the Board;

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DEFINITIONS

“Option(s)”	means a right(s) to subscribe for Shares pursuant to the terms of the Scheme;
“Option Period”	means a period to be determined by the Board at its absolute discretion and notified by the
	Board to each Grantee as being the period during which an Option may be exercised, such
	period to expire not later than 10 years after the Grant Date;
“Ordinary Resolution(s)”	means the proposed ordinary resolution(s) as referred to in the EGM Notice;
“Participant(s)”	means any employee or director (including any non-executive director) of any member of
	the Group, as absolutely determined by the Board;
“Repurchase Mandate”	a general mandate to the Directors to exercise the power of the Company to repurchase
	Shares during the period as set out in Ordinary Resolution no. 3 up to 10 per cent. of the
	issued share capital of the Company as at the date of passing Ordinary Resolution no. 3;
“Scheme”	means the new share option scheme in its present or any amended form to be adopted by
	the Company under Ordinary Resolution no. 2 at the EGM; a summary of the principal
	terms of the Scheme is set out in Appendix I to this circular;
“Share(s)”	means shares of $0.10 each in the capital of the Company (or of such other nominal
	amount as shall result from a sub-division, consolidation, reclassification or reconstruction
	of the share capital of the Company from time to time);
“Share Repurchase Rules”	the relevant rules set out in the Listing Rules to regulate the repurchase by companies with
	primary listing of their own securities on the Stock Exchange;
“Share Issue Mandate”	a general mandate to the Directors to exercise the power of the Company to allot and issue
	Shares during the period as set out in Ordinary Resolution no. 4 up to 20 per cent. of the
	issued share capital of the Company as at the date of passing Ordinary Resolution no. 4;
“Shareholder(s)”	means holder(s) of the Share(s);
“Stock Exchange”	means The Stock Exchange of Hong Kong Limited;
“Subscription Price”	means the price per Share at which a Grantee may subscribe for Shares on the exercise of
	an Option pursuant to paragraph 6 of Appendix I;
“Subsidiary”	means a company which is for the time being and from time to time a subsidiary within the
	meaning of Section 2 of the Companies Ordinance of Hong Kong (as amended from time
	to time) of the Company whether incorporated in Hong Kong or elsewhere;
“Takeover Code”	Hong Kong Codes on Takeovers and Mergers;
“$”	means Hong Kong dollars, the lawful currency of Hong Kong.

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LETTER FROM THE BOARD

WING SHAN INTERNATIONAL LIMITED 榮山國際有限公司

(Incorporated in Hong Kong with limited liability)

Directors:

Mr. HE Haochang, Chairman & Managing Director

Mr. CHAN Che Kan, Edward, Deputy Managing Director Mr. HUANG Yongzhong Mr. SITU Min Mr. TANG Jian Mr. LAM Siu Hung Mr. WEI Zhong Ping Mr. CHAN Ting Chuen, David*

Registered Office: Room 2105-8 Wing Shan Tower 173 Des Voeux Road Central, Hong Kong

(* Non-Executive Director)

(** Independent Non-Executive Director)

29 April, 2002

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR

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

1. PURPOSE

The purpose of this circular is to provide you with details of the Scheme and to convene the EGM to consider and, if thought fit, to approve and adopt the Scheme, terminate the Existing Scheme, and approve the general mandates to repurchase Shares and to issue and allot Shares.

2. TERMINATION OF THE EXISTING SCHEME AND ADOPTION OF THE SCHEME

The Existing Scheme was adopted by the Company on 16 March, 1993.

Due to the recent amendments in Chapter 17 (Share Option Schemes) of the Listing Rules by the Stock Exchange which has come into effect since 1 September, 2001, the Company must either alter the terms of the Existing Scheme, or to adopt the Scheme before further options may be granted. The Board considers that it is appropriate to adopt the Scheme in replacement of the Existing Scheme so that the provisions of the Scheme and Options granted thereunder will be in line with the requirements of the new rules of Chapter 17 in the Listing Rules.

The Board considers that in order to attract, retain and motivate talented Participants to strive for future developments and expansion of the Group, it is important that the Group should continue to provide such Participants with an additional incentive and encouragement by offering them an opportunity to obtain an ownership interest in the Company and to enjoy the

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LETTER FROM THE BOARD

results of the Company attained through their efforts and contributions. Accordingly, the Board considers that the adoption of the Scheme is in the best interests of the Company and the Shareholders as a whole. The Board therefore proposes to recommend to the Shareholders at the EGM to approve the adoption of the Scheme and simultaneously terminate the Existing Scheme.

It is proposed that subject to the approval of the Shareholders of the adoption of the Scheme at the EGM, the Existing Scheme will be terminated with effect from the conclusion of the EGM and the Scheme will take effect, subject to the approval of the Stock Exchange, on the Adoption Date. Operation of the Scheme will commence after all conditions precedent as referred to in paragraph 3 below have been fulfilled.

A summary of the principal terms of the Scheme is set out in the Appendix I to this circular on Page 8 to 12.

The Board had granted the options pursuant to the Existing Scheme to Participants to subscribe for a total of 29,416,596 Shares representing approximately 3.55 per cent. of the issued share capital of the Company as at the Latest Practicable Date. Save as aforesaid and up to the Latest Practicable Date, no other options have been granted to any Participant. As at the Latest Practicable Date, there is no option outstanding, no option lapsed and no options cancelled under the Existing Scheme. The Board confirms that prior to the EGM, it will not grant any further option under the Existing Scheme. Besides the Existing Scheme, there is no other subsisting share option schemes as at the Latest Practicable Date.

Upon termination of the Existing Scheme, no further Options may be offered thereunder. However, in all other respects the provisions of the Existing Scheme shall remain in full force. The above outstanding options under the Existing Scheme shall continue to be subject to the provisions of the Existing Scheme and the provisions of Chapter 17 of the Listing Rules which took effect from 1 September 2001 and the adoption of the Scheme will not in any event affect the terms of the grant of such outstanding options.

As at the Latest Practicable Date, the issued share capital of the Company comprised 829,018,244 Shares. Assuming that there is no change in the issued share capital between the period from the Latest Practicable Date and the Adoption Date, the number of Shares issuable pursuant to the Scheme on the Adoption Date will be 82,901,824 Shares.

With respect to the Scheme, the Company will, where applicable, comply with the relevant provisions of and requirements under Chapter 17 of the Listing Rules.

3. CONDITIONS PRECEDENT OF THE SCHEME

The adoption of the Scheme is conditional upon:

• (a) the passing at the EGM of Ordinary Resolution no.1 approving the termination of the Existing Scheme;

• (b) the passing at the EGM of the Ordinary Resolution no.2 approving the adoption of the Scheme; and

• (c) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, any Shares to be issued pursuant to the exercise of the Options under the Scheme.

4. EXPLANATION OF THE TERMS

The terms of the Scheme are in line with the provisions of the revised Chapter 17 of the Listing Rules, which govern the terms of the share option schemes of listed companies. Further, the Scheme will provide the Company with a flexible means of giving incentive to, rewarding, remunerating, compensating and/or providing benefits to the Participants and for such other purposes as the Board may approve from time to time.

By offering Options to the Participants in such flexible terms under the Scheme, in particular, the subscription price of the Options will be determined on a fair basis, such Participants may exercise their Options at anytime within the Option Period to acquire a monetary gain or ownership interest in the Company which may be in turn provide a further incentive to the Participants to better serve the Company.

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LETTER FROM THE BOARD

As the Company may impose such minimum holding period and/or requiring the Participants to achieve such performance target as may be stipulated in the offer letter before their Options can be exercised, the Company may be in a better position to retain such Participants to continue serving the Group whilst at the same time providing these Participants further incentive in achieving the goals of the Group.

Therefore, the Scheme, if adopted, will be in the interest of the Company as a whole in terms of management and operation. Accordingly, the Board proposes to recommend the Shareholders to approve the adoption of the Scheme and simultaneously terminate the Existing Scheme at the EGM.

5. VALUE OF THE OPTIONS

Since the Scheme is yet to be approved by the Shareholders, the Board has not determined the time frame on the granting of the Option thereunder and the number of Shares for which any Grantee may subscribe upon exercise of an Option. As the time frame on the granting of the Option and the number of Shares upon exercise of the Option are two critical variables in determining value of the Option, the Board considers that it is premature and inappropriate to state the value of the Options for the time being in this circular.

6. GENERAL MANDATE TO REPURCHASE SHARES

On 23 May 2001, general mandates were given to Directors to exercise the powers of the Company to repurchase its own shares. Under the Listing Rules, such general mandates will lapse at the conclusion of the forthcoming annual general meeting of the Company.

It is proposed at the EGM to grant to the Directors a general and unconditional mandate to exercise the powers of the Company to repurchase at any time during the period from the passing of the resolution until the next annual general meeting of the Company or such earlier period as stated in the resolution Shares up to a maximum of 10 per cent. of the issued share capital of the Company at the date of the passing of the ordinary resolution; details of which are set out in Ordinary Resolution no.3.

An explanatory statement as required under the Share Repurchase Rules, giving certain information regarding the Repurchase Mandate, is set out in the Appendix II hereto.

7. GENERAL MANDATE TO ISSUE SHARES

On 23 May 2001, general mandates were given to Directors to exercise the powers of the Company to issue and allot shares. Under the Listing Rules, such general mandates will lapse at the conclusion of the forthcoming annual general meeting of the Company.

It is proposed at the EGM to grant to the Directors the Share Issue Mandate. In addition, it is also proposed to authorise an extension of the Share Issue Mandate by adding to the aggregate number of Shares which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to the Share Issue Mandate the number of Shares of nominal amount repurchased under the Repurchase Mandate, if granted; details of which are set out in the Ordinary Resolution nos. 4 and 5.

8. EXTRAORDINARY GENERAL MEETING

Set out on pages 15 to 18 of this circular is the EGM Notice at which Ordinary Resolutions will be proposed for the Shareholders to approve the termination of the Existing Scheme, the adoption of the Scheme, the Repurchase Mandate, the Share Issue Mandate and the extension of the Share Issue Mandate.

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LETTER FROM THE BOARD

9. ACTION TO BE TAKEN

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you propose to attend the EGM in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s registered office at Rooms 2105-8, Wing Shan Tower, 173 Des Voeux Road Central, Hong Kong as soon as possible and, in any event, not less than 48 hours before the time appointed for the holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. In the event you attend the EGM after having lodged the form of proxy at the Company’s registered office, your form of proxy will be deemed to have been revoked.

10. DOCUMENT AVAILABLE FOR INSPECTION

Copy of the Scheme will be available for inspection at the registered office of the Company from the date hereof during normal business hours up to and including the date of the EGM.

11. RECOMMENDATION

The Directors consider that the termination of the Existing Scheme, the adoption of the Scheme, the Repurchase Mandate, the Share Issue Mandate and the extension of the Share Issue Mandate are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of all resolutions as set out in the EGM Notice.

12. APPLICATION FOR LISTING

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, any Shares to be issued pursuant to the exercise of the Options under the Scheme.

Yours faithfully, By order of the Board

Wing Shan International Limited HE Haochang

Chairman & Managing Director

– 7 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

APPENDIX I

SUMMARY OF THE SCHEME

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

1. WHO MAY PARTICIPATE

Any Participant invited by the Board at the Board’s absolute discretion.

In determining the basis of eligibility of each Participant, the Board will mainly take into account of the experience of the Participant on the Group’s business, the length of service of the Participant with the Group, the efforts and contributions the Participant has made or is likely to be able to give or make towards the success of the Group in the future.

2. PURPOSE OF THIS SCHEME

The purpose of the Scheme is for the Company to attract, retain and motivate talented Participants to strive for future developments and expansion of the Group, to encourage the Participants to perform their best in achieving the goals of the Group and to allow the Participants to enjoy the results of the Company attained through their efforts and contributions.

3. CONDITIONS PRECEDENT

The Scheme shall take effect subject to the following conditions:

• (i) passing of the necessary resolution to terminate the Existing Scheme by the Shareholders in EGM;

• (ii) passing of the necessary resolution to adopt the Scheme by the Shareholders in EGM; and

• (iii) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, any Shares to be issued pursuant to the exercise of Options under the Scheme.

4. DURATION AND ADMINISTRATION

Subject to that the Scheme is terminated by the Company, the Scheme shall be valid and effective for a period of 10 years commencing on the Adoption Date, after which period no further Options will be issued but in all other respects the provisions of the Scheme shall remain in full force and effect and Options which are granted during the life of the Scheme may continue to be exercisable in accordance with their terms of issue.

5. GRANT OF OPTION

The Board shall be entitled at any time within 10 years after the Adoption Date to make an offer to any Participant. However, no offer shall be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision, until such price sensitive information has been published in the newspapers.

An Option shall be deemed to have been granted and accepted and to have taken effect when a signed copy of an offer letter made by the Company to a Participant together with a remittance in favour of the Company of $1.00 by way of consideration for the granting of the same is received by the Company.

Subject to the provisions of the Scheme and the Listing Rules, the Board may at its discretion when making the offer impose any conditions, restrictions or limitations in relation thereto as it may think fit.

– 8 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

APPENDIX I

6. SUBSCRIPTION PRICE

The Subscription Price shall be a price determined by the Board and notified to a Participant and shall be at least the highest of (a) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the Grant Date; (b) a price being the average of the closing prices of the Shares as stated in the Stock Exchange’s daily quotations sheets for the 5 Business Days immediately preceding the Grant Date; and (c) the nominal value of a Share.

7. EXERCISE OF OPTIONS

An Option shall be personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option.

An Option may be subject to such minimum holding period(s) and the Grantee may have to achieve such performance target as may be stipulated in a letter of an Offer made to a Participant before such Option can be wholly or partly exercised.

An Option may be exercised by the Grantee at any time during the Option Period provided that:

• (a) in the event of the Grantee ceases to be a Participant for any reason other than on his death or the termination of his employment or directorship on one or more grounds specified in paragraph 8 (ii) below, the Grantee may exercise the Option up to his entitlement at the date of cessation (to the extent he is entitled to exercise at the date of cessation but not already exercised) within the period of 3 months following the date of such cessation, which date shall be the last actual working day with the relevant member(s) of the Group, whether salary is paid in lieu of notice or not;

• (b) in the event the Grantee dies before exercising the Option in full and none of the events which would be a ground for termination of his employment or directorship under paragraph 8 (ii) below arises, the personal representative(s) of the Grantee shall be entitled within a period of 12 months, or such longer period as the Board may determine from the date of death, to exercise the Option up to the entitlement of such Grantee at the date of death (to the extent not already exercised).

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

8. LAPSE OF OPTION

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) among others on the earliest of:–

• (i) the expiry of the Option Period, or

• (ii) on the date on which the Grantee ceases to be a Participant by reason of the termination of his employment or directorship with the relevant member(s) of the Group on the grounds that he has been guilty of misconduct, or has become insolvent, or has made any arrangements or composition with his creditors generally, or has been convicted of any criminal offence involving his integrity or honesty.

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SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

APPENDIX I

9. MAXIMUM NUMBER OF SHARES AVAILABLE FOR SUBSCRIPTION

The total number of Shares which may be issued upon exercise of all Options to be granted under the Scheme and any other share option schemes of the Company shall not in aggregate exceed 10 per cent. of the total number of Shares in issue as at the date of approval of the Scheme, unless the Company obtains an approval from its shareholders to refresh the 10 per cent. limit. Options lapsed in accordance with the terms of the Scheme will not be counted for the purpose of calculating such 10 per cent. limit.

The Company may seek approval of its Shareholders in general meeting for refreshing the 10 per cent. limit such that the total number of Shares which may be issued upon exercise of all Options to be granted under the Scheme and any other share option schemes of the Company under the limit as refreshed shall not exceed 10 per cent. of the total number of Shares in issue as at the date of approval to refresh such limit. Options previously granted under the Scheme (including those outstanding, cancelled, lapsed in accordance with the Scheme or exercised Options) will not be counted for the purpose of calculating such limit as refreshed.

The Company may seek separate approval by its shareholders in general meeting for granting Options beyond the 10 per cent. limit provided the Options in excess of such limit are granted only to Participants specifically identified by the Company before such approval is sought.

Notwithstanding the above, the maximum number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the Scheme and any other share option schemes of the Company shall not exceed 30 per cent of the Shares in issue from time to time. No Options may be granted under the Scheme and any other share option schemes of the Company if this will result in such limit being exceeded.

10. MAXIMUM ENTITLEMENT OF SHARES OF EACH PARTICIPANT

The total number of Shares issued and to be issued upon exercise of the Options granted to each Participant (including both exercised, cancelled and outstanding Options) in any 12-month period shall not exceed 1 per cent. of the total number of Shares in issue.

Should any further grant of Options in excess of the 1 per cent. limit of the Shares is in issue, such further grant must be separately approved by the Shareholders in general meeting with such Participant and his associates abstaining from voting. The number of Shares subject to the Options to be granted and the terms of the Options to be granted to such Participant shall be fixed before shareholders’ approval and the date of Board meeting for proposing such further grant should be taken as the date of grant for the purpose of calculating the Subscription Price.

Any grant of Options to a Participant who is a director, chief executive or substantial shareholder of the Company or their respective associates must be approved by the independent non-executive directors of the Company (excluding independent non-executive director who is the Grantee).

Where the Board proposes to grant any Option to a Participant who is an independent non-executive director of the Company, or any of their respective associates would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to him in the 12-month period up to and including the date of such grant:–

• (i) representing in aggregate more than 0.1 per cent. of the total number of Shares in issue; and

• (ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of $5,000,000,

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SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

APPENDIX I

such proposed grant of Options must be approved by the Shareholders in general meeting with all connected persons of the Company abstain from voting (except where any connected person may vote against the relevant resolution). In such a case, the Company shall send a circular to its Shareholders containing all those terms as required under the Listing Rules. Any vote taken at the meeting to approve the grant of such Options must be taken on a poll.

The maximum number of Shares referred to in paragraphs 9 and 10 above may be adjusted, in such manner as the Auditors shall certify to be fair and reasonable, in the event of any alteration in the capital structure of the Company whether by way of consolidation or subdivision.

11. REORGANISATION OF CAPITAL STRUCTURE

In the event of any alteration in the capital structure of the Company whilst any Option remains exercisable, whether by way of a consolidation issue, right issue, subdivision or consolidation of shares or reduction of capital, such corresponding alterations (if any) shall be made to:–

• (a) the number of Shares subject to the Option so far as unexercised; and/or

• (b) the Subscription Price,

as the Auditors shall at the request of the Board, certify in writing (other than any such adjustments made on a capitalisation issue), either generally or as regards any particular Grantee, to be in their opinion fair and reasonable and that such alterations shall give a Grantee the same proportion of the issued share capital of the Company as that to which he is previously entitled, but so that no such alterations shall be made the effect of which would be to enable a Share to be issued at less than its nominal value. The capacity of the Auditors is that of experts and their certification shall be final and binding on the Company and the Grantees.

12. DISPUTES

Any dispute arising in connection with the Scheme (whether as to the number of Shares the subject of an Option, the amount of the Subscription Price or otherwise) shall be referred to the decision of the Auditors who shall act as experts and not as arbitrators and whose decision shall be final and binding.

13. ALTERATION OF SCHEME

The provisions of the Scheme may be altered in any respect by resolution of the Board except that the provisions of the Scheme as to:–

• (a) the definitions of “Grantee”, “Option Period” and “Participant” in paragraph 1.1 of the Scheme;

• (b) the provisions of paragraphs 4.1, 5.1, 5.2, 5.3, 6, 7, 8, 9, 10, 11 and 14 of the Scheme; and

• (c) all such other matters set out in Rule 17.03 of the Listing Rules,

shall not be altered to the advantage of the Participants except with the prior approval of the Shareholders in general meeting.

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

The amended terms of the Scheme or the Options must still comply with the relevant requirements of Chapter 17 of the Listing Rules.

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SUMMARY OF THE PRINCIPAL TERMS OF THE SCHEME

APPENDIX I

Any change to the authority of the Directors or scheme administrators in relation to any alternation to the terms of the Scheme must be approved by the Shareholders in general meeting.

14. CANCELLATION OF OPTIONS

The Board may at any time at its absolute discretion cancel any Option granted but not exercised. Where the Company cancels Options and makes an offer of the grant of new Options to the same Option holder, the offer of the grant of such new Options may only be made, under the Scheme with available Options (to the extent not yet granted and excluding the cancelled Options) within the limit approved by the Shareholders as mentioned in paragraph 9 of this Appendix.

15. TERMINATION OF SCHEME

The Company by resolution in general meeting or the Board may at any time terminate the operation of the Scheme and in such event no further Options will be offered but in all other respects the provisions of the Scheme shall remain in full force and effect.

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EXPLANATORY STATEMENT

APPENDIX II

The following serves as an explanatory statement, as required by the Share Repurchase Rules, to provide you with requisite information for your consideration of the Repurchase Mandate and also constitutes the memorandum required under section 49BA of the Companies Ordinance.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 829,018,244 Shares.

Subject to the passing of the Ordinary Resolution no.3 set out in the EGM Notice and on the basis that no further Shares are issued or repurchased prior to the EGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 82,901,824 Shares, representing not more than 10 per cent. of the issued share capital of the Company.

2. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its shareholders to have a general authority from shareholders to enable the Directors to repurchase the Company’s Shares in market. Such purchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets of the Company and/or its earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and its shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum and articles of association of the Company and the Companies Ordinance. It is proposed that repurchases of Shares under the Repurchase Mandate in these circumstances would be financed from available cash flow or working capital facilities of the Company and its subsidiaries.

The Companies Ordinance provides that the amount of capital repaid in connection with a share repurchase may only be paid from distributable profits of the company or from the proceeds of a new issue of shares made for the purpose. The Companies Ordinance further provides that the amount of premium payable on repurchase may only be paid out of distributable profits of the company. Where the repurchased shares were issued at a premium, any premium payable on repurchase may be paid out of the proceeds of a fresh issue of shares made for the purpose of the share repurchase up to certain limits specified by the Companies Ordinance.

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the annual report for the year ended 31 December, 2001) in the event that the proposed repurchase of Shares was to be carried out in full at any time during the proposed repurchase period. However, 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 requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

4. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the twelve months preceding the date of this circular were as follows:–

		Shares				Shares
	Highest		Lowest		Highest		Lowest
	HK$		HK$		HK$		HK$
2001				2002
April	0.445		0.350	January	0.350		0.310
May	0.500		0.350	February	0.380		0.325
June	0.540		0.400	March	0.400		0.350
July	0.430		0.350
August	0.380		0.300
September	0.330		0.235
October	0.320		0.250
November	0.340		0.280
December	0.360		0.305

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EXPLANATORY STATEMENT

APPENDIX II

5. GENERAL

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make share repurchases pursuant to the proposed Ordinary Resolution no.3 set out in the EGM Notice and in accordance with the Listing Rules and the applicable laws of Hong Kong.

If as a result of the share repurchases, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeover Code. As a result, a shareholder or a group of shareholders acting in concert, 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 Takeover Code.

As at the Latest Practicable Date, (i) Foshan Development Company Limited (“Foshan Development”) together with parties acting in concert with it are beneficially interested in 321,117,079 Shares representing approximately 38.74 per cent. of the issued share capital of the Company; and (ii) Madam YIP Siu Chun together with her associates (as defined in the Listing Rules) are beneficially interested in 290,196,037 Shares representing approximately 35.00 per cent. of the issued share capital of the Company. In the event that the Repurchase Mandate were exercised in full, the shareholding of Foshan Development together with the parties acting in concert with it and Madam YIP Siu Chun together with her associates would be increased to approximately 43.04 and 38.89 per cent. of the issued share capital of the Company respectively, assuming that the 321,117,079 Shares and 290,196,037 Shares held as mentioned above remains unchanged. Then, each of Foshan Development together with the parties acting in concert with it and Madam YIP Siu Chun together with her associates could be required under Rule 26 of the Takeover Code to make a mandatory offer in respect of all the issued shares of the Company by reason of such increase. Save as aforesaid, the Directors are not aware of any consequences which may arise under the Takeover Code as a consequence of any purchases made under the Repurchase Mandate. Further, such full exercise of the Repurchase Mandate would cause the Shares held in the hands of the public to fall below the minimum requirement to approximately 18.07 per cent. of the issued share capital of the Company. The Directors will use their best endeavours to ensure that the Repurchase Mandate will not be exercised to the extent that the number of Shares held by the public would be reduced to less than 25 per cent. of the issued share capital of the Company. The Directors have no intention to exercise the Repurchase Mandate which may result in possible mandatory offer being made under the Takeover Code.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), presently intend to sell Shares to the Company under the Repurchase Mandate in the event that the Repurchase Mandate is approved by the shareholders.

The Company has not been notified by any connected persons (as defined in the Listing Rules) that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them to the Company in the event that the Repurchase Mandate is approved by the shareholders.

6. SHARES REPURCHASE MADE BY THE COMPANY

The Company has not purchased any of its Shares (whether on the Stock Exchange or otherwise) in the six months preceding the date of the printing of this circular.

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NOTICE OF THE EGM

WING SHAN INTERNATIONAL LIMITED 榮山國際有限公司

(Incorporated in Hong Kong with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Wing Shan International Limited (the “Company”) will be held at Plaza IV, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 22 May 2002 at 10:15 a.m. (or so soon thereafter as the annual general meeting of the Company convened on the same day and at the same place shall have been concluded or adjourned) for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as the ordinary resolutions of the Company:–

ORDINARY RESOLUTIONS

• (1) “ THAT the existing scheme option scheme of the Company and its subsidiaries which was adopted by the Company at its general meeting on 16 March 1993 be and is hereby terminated with immediate effect.”

• (2) “ THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) granting approval for listing of and permission to deal in the shares of the Company to be issued pursuant to the exercise of any options granted under the share option scheme of the Company (the “Scheme”), the rules of which are contained in the document marked “A” produced to the meeting and for the purposes of identification signed by the Chairman thereof, the Scheme be and is hereby approved and adopted and the directors of the Company be and is hereby authorised to do all such acts and to enter into all such transactions, arrangements, and agreements as may be necessary or expedient in order to give full effect to the Scheme including but without limitation:

• (i) to administer the Scheme under which options will be granted to participants eligible under the Scheme to subscribe for shares in the Company;

• (ii) to modify and/or amend the Scheme from time to time provided that such modification and/or amendment is effected in accordance with the provisions of the Scheme relating to modification and/or amendment;

• (iii) to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of the options under the Scheme and subject to the Rules Governing the Listing of Securities on the Stock Exchange;

• (iv) to make application at the appropriate time or times to the Stock Exchange and any other stock exchanges upon which the issued shares of the Company may for the time being be listed, for listing of, and permission to deal in, any shares in the Company which may hereafter from time to time be allotted and issued pursuant to the exercise of the options under the Scheme; and

• (v) to consent, if it so deems fit and expedient, to such conditions, modifications and/or variations as may be required or imposed by the relevant authorities in relation to the Scheme.”

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NOTICE OF THE EGM

• (3) “ THAT :

• (i) subject to paragraph (ii) of this Resolution, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase shares of the Company on the Stock Exchange or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (ii) the aggregate nominal amount of shares of the Company to be repurchased by the Company pursuant to the approval in paragraph (i) of this Resolution shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution, and the said approval shall be limited accordingly; and

• (iii) for the purpose of this Resolution,

  • “Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of

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

  • (b) the expiration of the period within which the next annual general meeting of the Company is required by Companies Ordinance (Cap.32 of the Laws of Hong Kong) to be held; and

  • (c) the revocation or variation of the authority given under this resolution by ordinary resolution of the Shareholders in general meeting.”

• (4) “ THAT :

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

• (ii) the approval in paragraph (i) of this Resolution shall authorise the Directors of the Company during the Relevant Period to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which would or might require shares to be allotted after the end of the Relevant Period;

• (iii) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (i) of this Resolution, otherwise than pursuant to (a) a Rights Issue (as hereinafter defined); or (b) an issue of shares upon the exercise of subscription rights under any option scheme or similar arrangement for the time being adopted for the grant or issue to the grantees as specified in such scheme or similar arrangement of shares or rights to acquire shares of the Company; or (c) any issue of shares pursuant to the exercise of rights of subscription or conversion under the terms of any existing warrants, bonds, debentures, notes and other securities of the Company which carry rights to subscribe for or are convertible into shares of the Company; or (d) an issue

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NOTICE OF THE EGM

of shares pursuant to any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of the dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution and the said approval shall be limited accordingly; and

• (iv) for the purposes of this Resolution:–

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

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

• (b) the expiration of the period within which the next annual general meeting of the Company is required by Companies Ordinance (Cap.32 of the Laws of Hong Kong) to be held; and

• (c) the revocation or variation of the authority given under this resolution by ordinary resolution of the Shareholders in general meeting; and

“Rights Issue” means an offer of shares of the Company or issue of option, warrants or other securities giving the right to subscribe for shares of the Company, open for a period fixed by the Directors of the Company to holders of shares, or any class of shares, whose names appear on the register of members of the Company (and, where appropriate, to holders of other securities of the Company entitled to the offer) on a fixed record date in proportion to their holdings of such shares (or, where appropriate, such other securities) as at that date (subject to such exclusions or other arrangements as the Directors of the Company 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 recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

• (5) “ THAT the general mandate granted to the Directors of the Company to exercise the powers of the Company to allot, issue and deal with any additional shares of the Company pursuant to Ordinary Resolution no.4 set out in this notice be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution no.3 set out in this notice, provided that such extended amount shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date of the passing of this Resolution.”

By Order of the Board CHEUNG Wing Yui Company Secretary

Hong Kong, 29 April 2002

Registered Office:

Room 2105-8 Wing Shan Tower 173 Des Voeux Road Central Hong Kong

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NOTICE OF THE EGM

Notes:

• (1) Any member entitled to attend and vote at the meeting is entitled to appoint more than one proxy to attend and, on a poll, to vote instead of him or her. A proxy does not need to be a member of the Company.

• (2) Where there are joint holders of any share, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such share as if he or she were solely entitled thereto, but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons 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.

• (3) 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 such power or authority, must be deposited at registered office of the Company at Room 2105-8, Wing Shan Tower, 173 Des Voeux Road Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting.

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