Television Broadcasts Limited — Proxy Solicitation & Information Statement 2003

Oct 29, 2003

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Hong Tong Holdings Limited (the “Company”), you should at once hand this circular with the accompanying form of proxy to the purchaser or transferee, or to the banker, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

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

==> picture [52 x 53] intentionally omitted <==

HONG TONG HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

DISCLOSEABLE TRANSACTION INVOLVING ISSUE OF NEW SHARES

AND

GENERAL MANDATE FOR ISSUE OF NEW SHARES

A notice convening the extraordinary general meeting of the Company to be held at Unit 3616, 36th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong on Monday, 17 November 2003 at 11:00 a.m. is set out on pages 25 to 27 of this circular. Whether or not you are able to attend the meeting in person, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch registrar and transfer office in Hong Kong, Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion of the form of proxy will not preclude you from attending and voting at the meeting should you so wish.

27 October 2003

CONTENTS

		Page
Definitions.......................................................................................................................................		1
Letter from the Board .....................................................................................................................		5
Appendix I —	Business Valuation of the Benchmark Project ............................................	16
Appendix II —	General Information .....................................................................................	21
Notice of the EGM	.........................................................................................................................	25

– i –

DEFINITIONS

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

• “Acquisition”

• the proposed acquisition of the Sale Share by HTH from Angola Group pursuant to the Sale and Purchase Agreement

• “Angola Group”

• Angola Group Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and beneficially owned by the Warrantors each holding a 25 per cent. shareholding interest

• “Announcement” the announcement dated 7 October 2003 issued by the Company in relation to the Sale and Purchase Agreement and the transactions contemplated therein

• “BCS General Energy and Environment”

• ���������������� (Beijing China Sciences General Energy & Environmental Protection Co., Ltd.), a company incorporated in the PRC and owned as to 54.9 per cent. by China Sciences Group and as to 45.1 per cent. by 20 individuals

• “Benchmark Project” a waste incineration and processing project jointly selected by Angola Group and HTH as valued by Adonis Appraisal Limited for the purpose of serving as a benchmark for King Glory to engage in the PRC Projects and as a basis for determining the Consideration

• “Board”

• the board of Directors

• “business day” a day on which banks in Hong Kong are open for business other than a Saturday

• “China Science Group” ������������ (China Sciences Enterprise Group (Holding) Corporation), a large scale enterprise group established by ����� (Chinese Academy of Science)

• “Company” Hong Tong Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange

• “Completion” completion of the Acquisition

– 1 –

DEFINITIONS

“Completion Date”	(i) the date which is the third business day after the date on
	which all the Conditions to be satisfied or waived are satisfied
	or waived; or (ii) such other date as mutually agreed among the
	parties provided that if such day is not a business day, the
	Completion Date shall be the next business day thereafter
“Conditions”	conditions for completion of the Sale and Purchase Agreement
“Consideration”	the consideration for the Acquisition
“Consideration Shares”	new Shares to be issued and allotted to Angola Group pursuant
	to the Sale and Purchase Agreement
“Co-operation Agreement”	a co-operation agreement entered into between King Glory and
	BCS General Energy and Environment dated 28 August 2003
	in relation to the formation of joint venture in exploring the
	waste disposal market in the PRC
“Director(s)”	director(s) of the Company
“EGM”	an extraordinary general meeting of the Company to be convened,
	notice of which is set out herein, for the purpose of approving the
	Acquisition, the issue of the maximum of 30,000,000 Consideration
	Shares and the general mandate to issue new Shares
“First Project”	the first PRC Project to be undertaken by BCS General Energy
	and Environment and the Company
“First JV Company”	the JV Company to be established before Completion for the
	carrying on of the business of the First Project
“Further Conditions”	the conditions for payment of the balance of the Consideration
	of not more than HK$40,860,000 pursuant to the Sale and
	Purchase Agreement
“Group”	the Company and its subsidiaries
“Guarantors”	Yan Youlan, Xing Xiaolin, Jin Lijing and Chen Lei, who are
	the legal and beneficial owners of the entire issued share capital
	of Angola Group
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China

– 2 –

DEFINITIONS

“HTH”	Hong Tong Hai Investments Limited, a company incorporated
	in Hong Kong with limited liability and is an indirect wholly-
	owned subsidiary of the Company
“Issue Price”	HK$1.18 per Consideration Share
“JV Companies”	sino-foreign equity joint venture enterprises to be established
	by King Glory and BCS General Energy and Environment in
	the PRC to be engaged in the business of the development,
	construction and management of the PRC Project pursuant to
	the Co-operation Agreement and each a “JV Company”
“King Glory”	King Glory Development Limited, a company incorporated in
	the British Virgin Islands with limited liability and wholly and
	beneficially owned by Angola Group
“Latest Practicable Date”	23 October 2003, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Letter of Intent”	the legally binding letter of intent dated 19 September 2003
	entered into between HTH and Angola Group in relation to the
	Acquisition
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Long Stop Date”	31 December 2003
“OECD”	Organisation for Economic Co-operation and Development
“Placing”	a private placing by Sanfull Securities Limited of 44,760,000
	new Shares at the price of HK$1.18 per Share with independent
	investors pursuant to the placing and underwriting agreement
	dated 19 September 2003 and completed on 21 October 2003
“PRC”	the People’s Republic of China
“PRC Project”	waste incineration and processing business project in the PRC
	which involves the construction of incineration boilers and
	electricity generators
“Relevant Date”	the date falling within a period of 10 business days after the
	establishment of a JV Company (save the First JV Company)
	and fulfilment of all the Further Conditions pursuant to the Sale
	and Purchase Agreement

– 3 –

DEFINITIONS

“Sale and Purchase	the conditional sale and purchase agreement dated 7 October 2003
Agreement”	entered into between the Company, HTH, Angola Group and
	the Warrantors in relation to the Acquisition
“Sale Share”	1 ordinary share of US$1.00 each in the capital of King Glory,
	representing the entire issued share capital of King Glory
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	share(s) of HK$0.10 each in the share capital of the Company
“Shareholders”	holders of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“USA”	United States of America
“Warrantors”	Yan Youlan, Xing Xiaolin, Jin Lijing and Chen Lei, who are
	the legal and beneficial owners of the entire issued share capital
	of Angola Group
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong

– 4 –

LETTER FROM THE BOARD

==> picture [52 x 53] intentionally omitted <==

HONG TONG HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

Executive Directors: Mr. Hon Ming Kong (Chairman) Mr. Hon Yik Kwong Mr. Lee Yu Leung

Registered Office: P.O. Box 309 Ugland House South Church Street George Town Grand Cayman Cayman Islands British West Indies

Independent non-executive Directors: Mr. Tsoi Wai Kwong Mr. Fork Siu Lun, Tommy

Head Office and Principal Place of Business: Unit 3616 36th Floor, China Merchants Tower Shun Tak Centre 168-200 Connaught Road Central Sheung Wan Hong Kong

27 October 2003

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION INVOLVING ISSUE OF NEW SHARES AND GENERAL MANDATE FOR ISSUE OF NEW SHARES

INTRODUCTION

On 7 October 2003, the Board announced that the Company and HTH, an indirectly wholly-owned subsidiary of the Company, have entered into the Sale and Purchase Agreement with Angola Group as vendor and the Warrantors relating to the proposed acquisition of the Sale Share for an aggregate consideration of not more than HK$45,400,000.

– 5 –

LETTER FROM THE BOARD

The Acquisition constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules. As the general mandate granted to the Directors at the annual general meeting of the Company held on 29 August 2003 has been fully utilized under the Placing, the issue of the maximum of 30,000,000 Consideration Shares in relation to the Acquisition is subject to the approval of the Shareholders at the EGM. As Angola Group and the Warrantors have no shareholdings in the Company as at the Latest Practicable Date, no Shareholders shall abstain from voting at the EGM.

The Board also proposes to renew the general mandate to issue new Shares since the general mandate granted to the Directors at the annual general meeting of the Company held on 29 August 2003 has been fully utilized under the Placing.

The purpose of this circular is to give you further information on the Acquisition and the resolution relating to the grant of a general mandate to issue new Shares and to give you the notice of the EGM at which the necessary resolutions will be proposed to consider and, if thought fit, approve the Acquisition, the issue and allotment of not more than 30,000,000 Consideration Shares and the general mandate for issue of new Shares.

THE SALE AND PURCHASE AGREEMENT DATED 7 OCTOBER 2003

Parties

Purchaser Hong Tong Hai Investments Limited, a company incorporated in Hong Kong with limited liability and is an indirect wholly-owned subsidiary of the Company

Vendor Angola Group Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and is wholly and beneficially owned by the Warrantors

• Warrantors and Yan Youlan, Xing Xiaolin, Jin Lijing and Chen Lei, each of whom is Guarantors interested in 25 per cent. of the issued share capital of Angola Group

• Company Hong Tong Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are currently listed on and dealt in the Stock Exchange

Each of Angola Group and the Warrantors is not a connected person (as defined in the Listing Rules) of the Company. Angola Group and the Warrantors have no shareholdings in the Company as at the Latest Practicable Date.

Assets to be acquired

Sale Share 1 ordinary share of US$1.00 each in the capital of King Glory, representing the entire issued share capital of King Glory

– 6 –

LETTER FROM THE BOARD

Conditions for completion of the Sale and Purchase Agreement

Completion shall be conditional upon:—

• (a) the passing by the Shareholders of an ordinary resolution at the EGM to be convened for the purpose of approving the issue and allotment of the aggregate of 30,000,000 Consideration Shares under the Sale and Purchase Agreement;

• (b) the listing of, and permission to deal in, all the 30,000,000 Consideration Shares being granted by the Listing Committee of the Stock Exchange;

• (c) completion of the due diligence of King Glory by HTH to its satisfaction;

• (d) all necessary approvals, licences, permits, consents and authorisations for the formation of the First JV Company having been obtained from and issued by the competent PRC governmental authorities, regulatory bodies and any relevant parties and the business licence of the First JV Company having been issued and obtained;

• (e) completion of the due diligence of the First JV Company and the terms and conditions of joint venture contract and articles of association of the First JV Company to the satisfaction of HTH;

• (f) a valuation report to be issued by an independent valuer to be appointed by HTH showing the value of the Benchmark Project of not less than HK$10,000,000 having been obtained;

• (g) all necessary consents, authorisations or other approvals (or, as the case may be, the relevant waiver) of any kind in connection with the entering into and performance of the terms of the Sale and Purchase Agreement which may be required by HTH and the Company under the Listing Rules, from the Stock Exchange or any regulatory authority having been obtained;

• (h) all the warranties given by Angola Group and the Warrantors under the Sale and Purchase Agreement remain true and correct at all times as from the signing of the Sale and Purchase Agreement up to the Completion Date; and

• (i) all the undertakings comprising the warranties given by Angola Group and the Warrantors under the Sale and Purchase Agreement having been complied with and/or performed.

HTH may waive any of the above Conditions to the extent it is capable of waiving (save and except Conditions (a), (b) and (g) above) at any time before Completion by notice in writing to Angola Group.

Subject to the fulfilment or satisfaction or waiver by HTH, as the case may be, of all of the Conditions, Completion shall take place on the Completion Date.

– 7 –

LETTER FROM THE BOARD

If any of the Conditions has not been fulfilled or waived by HTH in its absolute discretion on or before the Long Stop Date (or such other date as may be mutually agreed by the parties in writing), the Sale and Purchase Agreement shall from such date be null and void and have no effect and no party shall have any obligations and liabilities to the other party under the Sale and Purchase Agreement (without prejudice to the rights of any party in respect of antecedent breaches).

Application has been made by the Company to the Stock Exchange for the listing of, and permission to deal in, up to a maximum of 30,000,000 Consideration Shares to be issued by the Company pursuant to the Sale and Purchase Agreement on the Stock Exchange.

Formation of JV Companies for the PRC Projects

Pursuant to the Co-operation Agreement dated 28 August 2003 entered into between King Glory and BCS General Energy & Environment, BCS General Energy & Environment and King Glory have agreed to form the JV Companies in exploring the waste incineration and processing market in the PRC. BCS General Energy & Environment will own not more than 49 per cent. and King Glory will own not less than 51 per cent. of the registered capital of each of the JV Companies. BCS General Energy & Environment will be responsible for providing technical support and operational management for the waste incineration and processing projects of the JV Companies. King Glory will be responsible for making financing arrangement for the JV Companies. The JV Companies aim to set up a series of highly effective municipal solid waste incineration and processing facilities by using the proprietary technology and equipment of BCS General Energy & Environment.

As projected in the Benchmark Project, the total investment amount of a PRC Project will be RMB220 million, of which not more than 30 per cent. will be injected in the form of registered capital and the remaining balance will be financed by way of external financing. The PRC Project would involve the construction of an incineration boiler with annual incineration capacity of 365,000 tonnes and power generating facility with electricity generating capacity of 240 million kWh of per annum. The PRC Project will rely on circulating fluid bed incineration technology developed by BCS General Energy & Environment. The PRC Project has two sources of revenues. The first source of revenues would derive from waste handling charges paid by the local government on per ton basis. The second source of revenues, also the prime source, would derive from the generation of electric power. Angola Group and the Board expect that each PRC Project will last for a term of 25 years.

It is the intention of King Glory and BCS General Energy and Environment to undertake in the form of an equity joint venture of not less than 10 PRC Projects and depending on where the PRC Project will be situated, a JV Company will be formed in the same area to carry on the business of such PRC Project. Angola Group has agreed to use its best endeavours to assist HTH to form not less than 9 JV Companies after Completion each to engage in a PRC Project (excluding the First PRC Project) of terms acceptable to HTH within a period of 3 years from the Completion Date. Unless with HTH’s prior consent in writing, the terms of each PRC Project shall fulfil, including but not limited to, the following requirements:—

• (a) the incineration capacity of each PRC Project shall not be less than that of the Benchmark Project; and

• (b) the internal rate of return of the PRC Project shall not be less than approximately 15 per cent. per annum as set out in the Benchmark Project.

– 8 –

LETTER FROM THE BOARD

For the purpose of evaluating the PRC Projects, HTH has appointed Adonis Appraisal Limited, an independent valuer, to perform a valuation on the Benchmark Project by applying discount cash flow method on the financial projection as provided by King Glory and BCS General Energy & Environment. According to the business valuation of the Benchmark Project as at 15 August 2003, the fair market value of a 100 per cent. interest in the business enterprise of the Benchmark Project is estimated to be HK$13,100,000. As King Glory has the right under the Co-operation Agreement to own not less than 51 per cent. of the equity interest of each JV Company, the fair market value of a minimum of 51 per cent. equity interest in the Benchmark Project is equivalent to HK$6,681,000. The consideration of HK$4,450,000, payable by HTH to Angola Group upon formation of a JV Company to engage in the business of a PRC Project, represents a discount of approximately 33.4 per cent. to the valuation of a minimum of 51 per cent. of the equity interest in the Benchmark Project. The discount of consideration to valuation was arrived at after arm’s length negotiation after taking into account the basis of the business valuation.

The total investment cost of the Benchmark Project is approximately RMB220 million. The Benchmark Project would involve the construction of an incineration plant in the Guangdong province of the PRC with an average daily waste processing capacity of 1,000 tonnes, which would generate 128,000,000 kWh of electric power per annum. The Benchmark Project will rely on circulating fluid bed combustion technique developed by BCS General Energy and Environment. The Benchmark Project will have 2 sources of revenues. The first source of revenues would derive from waste handling charges paid by the local government on per ton basis. The second source of revenues, also the prime source, would derive from the generation of electric power.

Consideration and payment terms

The total consideration of not more than HK$45,400,000 for the Acquisition was arrived at after arm’s length negotiations with reference to the business valuation of the Benchmark Project as at 15 August 2003 at HK$13,100,000 by Adonis Appraisal Limited, an independent valuer. The business valuation of the Benchmark Project is set out in Appendix I to this circular.

The consideration payable by HTH to Angola Group shall be a maximum of HK$45,400,000 which shall be satisfied by HTH in the following manners:

• (a) as to HK$1,000,000 to be paid by HTH to Angola Group in cash on Completion;

• (b) as to HK$3,540,000 by the issue and allotment by the Company of the first batch of 3,000,000 Consideration Shares to Angola Group at the Issue Price on Completion;

• (c) as to the balance of not more than HK$40,860,000 (the “Balance”), HTH shall, on each Relevant Date during a period of 3 years from the Completion Date, pay to Angola Group a sum of HK$4,540,000 which shall be satisfied by HTH in the following manners:—

• (i) as to HK$1,000,000 in cash on the Relevant Date; and

• (ii) as to HK$3,540,000 by the issue and allotment of 3,000,000 Consideration Shares to Angola Group at the Issue Price on the Relevant Date.

– 9 –

LETTER FROM THE BOARD

Conditions for payment of the balance of the Consideration

Payment of the Balance on each Relevant Date shall be conditional upon the fulfilment of all of the following conditions (“Further Conditions”):

• (a) all necessary approvals, licences, permits, consents and authorisations for the formation of the JV Company (save the First JV Company) for carrying on the business of the relevant PRC Project having been obtained from and issued by the competent PRC governmental authorities, regulatory bodies and any relevant parties and the business licence of such JV Company having been issued and obtained;

• (b) the registered capital of the JV Company not exceeding 30 per cent. of the total investment amount of such JV Company and the remaining investment amount having been arranged to be financed by external financing;

• (c) all necessary consents, authorisations or other approvals (or, as the case may be, the relevant waiver) of any kind in connection with the issue and allotment of the subsequent 3,000,000 Consideration Shares and the transactions contemplated under the Sale and Purchase Agreement as may be required by HTH and/or the Company under the Listing Rules, from the Stock Exchange, SFC or any regulatory authority having been obtained; and

• (d) HTH and the Company are in compliance with any requirements of the Listing Rules, any applicable law, the Stock Exchange, the SFC or other regulatory requirements for the issue and allotment of the subsequent 3,000,000 Consideration Shares and the transactions contemplated under the Sale and Purchase Agreement.

In the event that the Company shall, through King Glory, form any JV Companies (save for the First JV Company) after Completion, the formation of each of such JV Companies shall be subject to the requirements under Chapter 14 of the Listing Rules including, if necessary, the issuance of a separate announcement and the approval of the Shareholders.

Consideration Shares

The issue price of HK$1.18 per Consideration Share represents:—

• (i) a discount of approximately 28.9 per cent. to the closing price of HK$1.660 per Share as quoted on the Stock Exchange on 19 September 2003, being the date of the Letter of Intent;

• (ii) a discount of approximately 35.7 per cent. to the average closing price of approximately HK$1.836 per Share as quoted on the Stock Exchange for the last ten trading days prior to and including 19 September 2003;

– 10 –

LETTER FROM THE BOARD

• (iii) a discount of approximately 31.0 per cent. to the closing price of HK$1.710 per Share as quoted on the Stock Exchange on 3 October 2003, being the last trading day immediately prior to the suspension of trading in the Shares pending the issue of the Announcement;

• (iv) a discount of approximately 30.5 per cent. to the average closing price of HK$1.697 per Share as quoted on the Stock Exchange for the last ten trading days up to and including 3 October 2003; and

• (vi) a discount of approximately 26.3 per cent. to the closing price of HK$1.600 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

The market value of the 30,000,000 Consideration Shares is HK$48,000,000 based on the latest closing price of HK$1.600 per Share as at the Latest Practicable Date.

The Issue Price was arrived at after arm’s length negotiations between Angola Group and HTH and determined with reference to the placing price of HK$1.18 under the Placing. In view of the thin trading volume of Shares (with average monthly trading volume of approximately 3.7 million Shares for the past 12 months) and the reported net loss of the Group of approximately HK$40.6 million for the year ended 31 March 2003, the Directors are of the view that the Issue Price is fair and reasonable to the Shareholders.

Based on 268,560,000 Shares in issue as at the Latest Practicable Date, the maximum of 30,000,000 Consideration Shares represent (a) approximately 11.17 per cent. of the existing issued share capital of the Company; and (b) approximately 10.05 per cent. of the issued share capital of the Company as enlarged by the issue of the aggregate of 30,000,000 Consideration Shares.

Pursuant to the Co-operation Agreement, there is no limitation on the number of joint ventures to be formed between King Glory and BCS General Energy & Environment. In the event that King Glory has completed the formation of not less than 10 JV Companies (including the First JV Company) and all the Further Conditions are fulfilled pursuant to the Sale and Purchase Agreement, Angola Group will be interested in aggregate of 30,000,000 Shares, representing approximately 10.05 per cent. of the issued share capital of the Company as enlarged by the issue of the total of 30,000,000 Consideration Shares and become a substantial shareholder of the Company. However, in the event that King Glory manages to form more than 10 Joint Venture Companies, HTH will not be obliged to pay any consideration more than the maximum amount of HK$45,400,000.

Pursuant to the Sale and Purchase Agreement, Angola Group does not have any right to appoint any director to the Board and any management staff to the Company. Currently, the board of directors of King Glory comprises one director. HTH will nominate at least one director to replace the existing one director nominated by Angola Group to King Glory on Completion.

– 11 –

LETTER FROM THE BOARD

Non-disposal Undertaking

Angola Group has irrevocably and unconditionally undertaken to and covenanted with HTH that:—

• (a) for a period of 6 months commencing from the Completion Date, Angola Group shall not dispose of (or enter into any agreement to dispose of), nor permit the registered holder to dispose of (or enter into any agreement to dispose of) any of its direct or indirect interest (as the case may be) in the first batch of 3,000,000 Consideration Shares; and

• (b) for a period of 6 months commencing from each Relevant Date, Angola Group shall not dispose of (or enter into any agreement to dispose of), nor permit the registered holder to dispose of (or enter into any agreement to dispose of) any of its direct or indirect interest (as the case may be) in each subsequent batch of 3,000,000 Consideration Shares.

INFORMATION ON ANGOLA GROUP, KING GLORY AND BCS GENERAL ENERGY & ENVIRONMENT

Angola Group, a company incorporated on 18 April 2000 in the British Virgin Islands with limited liability, is beneficially owned as to 25 per cent. by each of the Warrantors. Since the incorporation of Angola Group in 2000, it has been mainly participated in bond and stock trading in Hong Kong. It only started to explore the waste incineration and processing market in the PRC in 2002 and established King Glory to pursue business opportunities in that area. Angola Group has also engaged a professional consultant to conduct a professional study in similar waste incineration and processing business in various markets.

King Glory, a company incorporated on 20 August 2002 in the British Virgin Islands with limited liability and wholly owned by Angola Group, has no assets and business operations as at the Latest Practicable Date and is a special purpose vehicle for entering into the Co-operation Agreement with BCS General Energy & Environment. BCS General Energy & Environment is owned as to 54.9 per cent. by China Sciences Group and as to 45.1 per cent. by 20 individuals and is a specialist in waste incineration and processing in the PRC. BCS General Energy & Environment and all its beneficial shareholders are not connected persons (as defined in the Listing Rules) of the Company.

China Sciences Group, supported by the technology and expertise of BCS General Energy & Environment, has participated in tendering projects in waste incineration and processing in various municipalities of the PRC. On 17 October, 2003, the Company was informed by King Glory that China Science Group had been awarded a project in waste incineration in Dongguan, the PRC (the “Dongguan Project”). King Glory has invited the Company to carry out the due diligence exercise on the Dongguan Project to determine whether the Dongguan Project shall be the First Project. The investment amount and other principal terms of the PRC project will have to be reviewed and accepted by King Glory before any JV Companies is established as and when China Science Group is awarded with the relevant PRC Project. So far, no JV Company has been established between King Glory and BCS General Energy & Environment and the investment amount for each JV Company has yet to be determined. The JV Companies, if any, will be established in the form of equity joint ventures.

– 12 –

LETTER FROM THE BOARD

China Sciences Group is a large scale enterprise group established by Chinese Academy of Science. China Sciences Group was established in January 1998 with a registered capital of RMB200 million. BCS General Energy & Environment became a member of China Sciences Group in July 2001 as a result of corporate reorganization of the enterprises of Chinese Academy of Science. The predecessor of BCS General Energy & Environment is Beijing General Energy and Power Company, which in turn was established by the Institute of Engineering Thermophysics of Chinese Academy of Science in the 1980s. China Sciences Group comprises over 40 enterprises focusing on science and technology activities and engaging in a wide range of business activities including, inter alia, research and development, production and sale of products in the fields of information technology, environmental protection, energy, computer systems, medical equipment and biotechnology.

REASONS FOR THE ACQUISITION

The Group is principally engaged in electrical engineering contracting business, trading in electrical equipment and materials mainly in private sector in Hong Kong and the PRC and provision of corporate and business consultancy services, direct investments and securities brokerage services in Hong Kong.

Pursuant to a study from Columbia University of the USA, municipal solid waste is one of the major problems that affects the environmental quality and the sustainable development of the cities of the PRC and rural areas. Accordingly to a report on handling the municipal solid waste in the PRC issued by Lund University in Sweden, the PRC, ranked after the USA, generated the second largest amount of municipal waste when compared with the OECD countries. In terms of municipals waste per capita per day, the PRC, ranked after the USA and Canada, generated the third largest amount of municipal waste when compared with the OECD countries. According to the figures by National Bureau of Statistics of China, the amount of municipal solid waste increased from 108 million tonnes in 1996 to 135 million tonnes in 2001, representing an increase of 25 per cent. The shortage of municipal solid waste disposal and treatment facilities and the backward technologies cause a large amount of solid waste disposal to be untreated and dumped in the open area. As a result, not only have land resources been wasted, but also there is a large scale pollution of the atmosphere, water and soil.

As mentioned in the 2003 annual report of the Company, the Group has been evaluating investment opportunities in the PRC for environmental protection by using sophisticated technology to transform domestic waste into electricity power. The Directors believe that the Acquisition represents an excellent opportunity for the Company to diversify into a unique business with vast market potential. It was also mentioned in the 2003 annual report of the Company that the Group is striving to minimize the adverse impact arising from the contraction of the electrical engineering market by implementing strategies including vertical integration into construction related businesses and horizontal diversification. The Acquisition is in line with the corporate strategy of the Group. In addition to the Shareholders’ returns expected to be generated from the waste management projects, the Directors also aim to participate in the construction of the waste incineration plants and in the electrical engineering contracting services. Accordingly, the Directors expect that the construction of the waste incineration plants and the electrical engineering projects in relation to the Acquisition will be able to create synergy to the existing electrical engineering businesses of the Group.

– 13 –

LETTER FROM THE BOARD

The terms of the Sale and Purchase Agreement were agreed after arm’s length negotiations. The Directors consider that the Acquisition is in the interest of the Company and that the terms of the Sale and Purchase Agreement are fair and reasonable so far as the Shareholders are concerned. As King Glory will become a subsidiary of the Company and the consideration for the Acquisition will be settled partly by cash and partly by Consideration Shares, the Board expected that it will not have any adverse impact in the financial position or any adverse effect on the earnings, assets and liabilities of the Group upon completion of the Acquisition.

SUBSTANTIAL SHAREHOLDERS’ INTEREST IN THE COMPANY

Shareholders YSH Investments Limited_(Note 1) Highworth Venture Limited(Note 2) AWH Fund Ltd. Angola Group Public Total _Notes:	Existing shareholding Number of Shares held Per cent. 58,916,000 21.94 54,900,000 20.44 27,366,000 10.19 — — 127,378,000 47.43 268,560,000 100.00		Shareholding after completion of 10 PRC Projects
			Number of Shares held Per cent. 58,916,000 19.73 54,900,000 18.39 27,366,000 9.17 30,000,000 10.05 127,378,000 42.66 298,560,000 100.00

1. Mr. Lai Sai Sang, former Chairman of the Company and existing director of subsidiaries of the Company, has a 90.4 per cent. beneficial interest in YSH Investments Limited.

2. Highworth Venture Limited is a company wholly owned by Mr. Hon Ming Kong, Chairman and executive Director.

GENERAL MANDATE FOR ISSUE OF NEW SHARES

The Board proposes to seek the approval of the Shareholders at the EGM to grant a new general mandate to the Directors to issue new Shares not exceeding 20 per cent. of the aggregate nominal amount of the issued share capital of the Company as at the date of passing the relevant resolution in order to assist in the future expansion of the Group as the Directors consider appropriate. However, the Board does not have any potential investment at this stage.

RECOMMENDATIONS

The Board believes that the Acquisition and the grant of a general mandate for issue of new Shares are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolutions set out in the notice of the EGM.

– 14 –

LETTER FROM THE BOARD

EGM

A notice convening the EGM to be held at Unit 3616, 36th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong on Monday, 17 November 2003 at 11:00 a.m. is set out on pages 25 to 27 of this circular for the propose of considering, and if thought fit, passing the ordinary resolutions in respect of:—

• (a) the Acquisition, including the issue of the aggregate of 30,000,000 Consideration Shares to Angola Group pursuant to the Sale and Purchase Agreement; and

• (b) the granting of the general mandate to the Directors to issue new Shares.

A form of proxy for use by the Shareholders at the EGM is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch registrar and transfer office in Hong Kong, Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable and in any event, not later than 48 hours before the time appointed for holding such meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjourned meeting thereof (as the case may be) should you so wish.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information contained in the Appendices to this circular.

Yours faithfully, By order of the Board Hon Ming Kong Chairman

– 15 –

BUSINESS VALUATION OF THE BENCHMARK PROJECT

APPENDIX I

==> picture [106 x 44] intentionally omitted <==

Suite 603, Printing House 6 Duddell Street, Central Hong Kong Tel : (852) 2114 8888 Fax : (852) 2114 0282 E-mail : enquiry@adonis.com.hk

27 October 2003

The Board of Director Hong Tong Holdings Limited Unit 3616, China Merchants Tower Shun Tak Center 168-200 Connaught Road Center Sheung Wan, Hong Kong

Dear Sir/Madam,

According to the instructions of Hong Tong Holdings Limited (the “Company”), we have conducted an appraisal on the fair market value of a 100 per cent. interest in the business enterprise of a waste processing and disposal project (the “Benchmark Project”) for the purpose of serving as a benchmark for King Glory Development Limited (“King Glory”) to decide on and engage in a series of waste processing and disposal projects with Beijing China Science General Energy & Environment Co., Ltd (“BCS”) in the People’s Republic of China (the “PRC”). King Glory was incorporated on 20 August 2002 in the British Virgins Islands (“BVI”) with limited liability. King Glory has no assets and business operations, and is a special purpose vehicle for entering into a Co-operation Agreement (the “Co-operation Agreement”) with BCS, whereby both parties agreed to form joint ventures in exploring the waste disposal market in the PRC. It is our understanding that this appraisal report is used for the purpose of acquiring a 100 per cent. interest in King Glory by the Company, as of the appraisal date of 15 August 2003 (the “appraisal date”).

This letter identifies the business appraised, describes the basis of valuation and assumptions, explains the valuation methods used, and presents our conclusion of fair market value.

The term fair market value is defined as the amount at which the appraised interest might be expected to exchange between a willing buyer and a willing seller, neither being under compulsion, each having reasonable knowledge of all relevant facts.

Business enterprise value is defined for this appraisal as the total invested capital, excluding debts but including shareholders’ equity, and is equivalent to shareholders’ equity plus shareholders’ loans, whether long-term or short-term. The fair market value of a 100 per cent. interest in the business enterprise of the Benchmark Project was derived based on income approach, more specifically the discounted cash flow method.

– 16 –

BUSINESS VALUATION OF THE BENCHMARK PROJECT

APPENDIX I

INTRODUCTION

King Glory, a company incorporated on 20 August 2002 in BVI with limited liability, has no assets and business operations and is a special purpose vehicle for entering into the Co-operation Agreement with BCS. BCS, owned as to 54.9 per cent. by China Sciences Group (Holding) Corporation (“China Science Group”) and as to 45.1 per cent. by 20 individuals, is a specialist in waste processing and disposal in the PRC. China Science Group, supported by BCS, has been participating in tendering projects in waste processing and disposal in various municipalities of the PRC.

Pursuant to the Co-operation Agreement, BCS and King Glory agreed to form joint ventures in exploring waste disposal market in the PRC. BCS will own not more than 49 per cent. and King Glory will own not less than 51 per cent. of the registered capital of each of these joint ventures. BCS will be responsible for providing technical support and operation management for the waste incineration projects for the joint ventures. King Glory will be responsible for making financing arrangement for the joint ventures.

In this appraisal, we have relied on a business model and financial projection (the “Financial Projection”) of the Benchmark Project located in the Guangdong Province in the PRC provided by the Company and BCS, in arriving at our conclusions. It is estimated that the total investment cost of the Benchmark Project is RMB 220 million. The Benchmark Project would involve the construction of an incineration plant with annual waste processing capacity of 365,000 tons, which would generate 128,000,000 kWh of electric power per annum. The Benchmark Project will rely on circulating fluid bed combustion technique developed by BCS.

The Benchmark Project would have 2 sources of revenues. The first source of revenues would derive from waste handling charges provided by the local government on per ton basis. The second source of revenues, also the prime source, would derive from the generation of electric power. It is expected that the Benchmark Project will last for a term of 25 years.

BASIS OF VALUATION AND ASSUMPTION

We have appraised the business enterprise of the Benchmark Project on the basis of fair market value. Fair market value has been defined above; however, it is assumed that the buyer and seller both contemplate retention of the business at its present location for continuation of current operations unless the break-up of the business or the sale of its assets would yield greater investment returns.

– 17 –

APPENDIX I BUSINESS VALUATION OF THE BENCHMARK PROJECT

Our investigation included discussions with the management of the Company with regards to the operations and prospects of the Benchmark Project. We also studied the current condition of the waste processing and disposal industry in general in the PRC, and reviewed the Financial Projection that was provided by BCS. We assumed that the data we obtained in the course of the valuation, along with the opinions and representations provided to us by the Company and BCS are true and accurate. It is reasonable to assume that the Financial Projection was prepared with due care and consideration. We see no reason, nor are we aware of any condition, to cause us to doubt the appropriateness of the bases and assumptions adopted in the Financial Projection. Before arriving at our opinion of value, we have considered the following principal factors:

• the background of BCS and the Company;

• the Financial Projection;

• the global economic outlook in general and the specific economic and competitive elements affecting the operation of the Benchmark Project;

• the waste processing and disposal industry in the PRC in general; and

• the business risks of operating the Benchmark Project.

Due to the changing environment in which the Benchmark Project is expected to operate, a number of assumptions have to be made in order to sufficiently support our concluded value of the business enterprise. The major assumptions adopted in this appraisal are:

• there will be no major changes in the existing political, legal, and economic conditions in the PRC;

• there will be no major changes in the current taxation law in the PRC, that the rates of tax payable remain unchanged and that all applicable laws and regulations will remain in compliance;

• exchange rates and interest rates will not differ materially from those presently prevailing;

• the Co-operation Agreement is legal and enforceable;

• the intellectual property of the Benchmark Project will not be infringed upon in a manner which would materially affect the economic benefits attributable to the Benchmark Project;

• the availability of finance will not be a constraint on the forecasted operation of the Benchmark Project in accordance with the Financial Projection;

• the Financial Projection has been prepared on a reasonable basis, reflecting estimates which have been arrived at after due and careful consideration by BCS and the Company;

– 18 –

APPENDIX I BUSINESS VALUATION OF THE BENCHMARK PROJECT

• King Glory will engage in waste processing and disposal projects in the PRC that have similar business models, business risks and forecast operation results as the Benchmark Project, and that the Financial Projection will materialize;

• King Glory and BCS will retain and have competent management, key personnel, and technical staff to support its ongoing operation; and

• industry trends and the market conditions for related industries will not deviate significantly from economic forecasts.

VALUATION METHODOLOGY

The fair market value of the Benchmark Project was developed through the application of the income approach technique known as the discounted cash flow method. The income approach is the conversion of expected periodic benefits of ownership into an indication of value. It is based on the principle that an informed buyer would pay no more for the business enterprise than an amount equal to the present worth of anticipated future benefits (income) from the same or equivalent business enterprise with similar risk.

The income approach explicitly recognizes that the current value of an investment is premised upon the expected receipt of future economic benefits such as cost savings, periodic income, or sale proceeds. We have applied the discounted cash flow method in appraising the economic benefits of the Benchmark Project. In practice, the discounted cash flow approach consists of estimating future annual cash flows and individually discounting them to present value.

A major requirement of the discounted cash flow approach is an earnings forecast, in particular a cash flow projection. Management of BCS provided the Financial Projection, covering a term of 25 years, in valuing the Benchmark Project. It is expected that the Benchmark Project will be launched as soon as in the beginning of January 2004. The business enterprise value of the Benchmark Project was calculated by adding the present values of the projected yearly cash flow covering a term of 25 years of the Benchmark Project, from January 2004 to December 2028. The present value of the projected yearly cash flow was derived by discounting the cash flow by a discount rate appropriate for the risks of the investment.

A discount rate represents the total expected rate of return that an investor would demand on the purchase price of an ownership interest in an asset given the level of risk inherent in that ownership interest. When developing a discount rate to apply to the cash flow streams attributable to the Benchmark Project, the discount rate is the cost of equity.

The cost of equity was developed through the application of the Capital Asset Pricing Model (“CAPM”). The CAPM states that an investor requires excess returns to compensate for any risk that is correlated to the risk in the return from the stock market as a whole but requires no excess return for other risks. Risks that are correlated to the risk in the return from the stock market as a whole are referred to as systematic and measured by a parameter called beta, whereas other risks are referred to as nonsystematic. The discount rate for the Benchmark Project was the sum of the risk-free return, equity risk premium, and specific risk premium of the Benchmark Project. Our analysis suggested that a discount rate of 14.5 per cent. was appropriate for valuing the Benchmark Project.

– 19 –

APPENDIX I BUSINESS VALUATION OF THE BENCHMARK PROJECT

We were furnished, for the purpose of this appraisal, with audited and unaudited financial data as well as other records, documents and projections. In arriving at our opinion of value, we have relied, to a very considerable extent, on the information provided by, and discussions held with the management of the Company.

CONCLUSION OF VALUE

Based on the aforesaid investigation, analysis and appraisal method employed, it is our opinion that as of 15 August 2003, the fair market value of a 100 per cent. interest in the business enterprise of the Benchmark Project is reasonably stated as HONG KONG DOLLARS THIRTEEN MILLION AND ONE HUNDRED THOUSAND ONLY (HK$13,100,000).

The opinion of value was based on generally accepted appraisal procedures and practices that rely extensively on the use of numerous assumptions and the consideration of many uncertainties, not all of which can be easily quantified and ascertained.

We have not investigated the title to or any liabilities against the property appraised.

We hereby certify that we have neither present nor prospective interests in the Company, BCS and the value reported.

Respectfully submitted, For and on behalf of Adonis Appraisal Limited Anna H.Y. Lok Chartered Financial Analyst Senior Manager

Note: Ms. Anna H.Y. Lok, Chartered Financial Analyst, has been conducting business valuation in the Greater China region for various purposes since 1997.

– 20 –

GENERAL INFORMATION

APPENDIX II

1. 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 the 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.

The Directors jointly and severally 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, their opinions expressed in this circular, the omission of which would make any of their statements in this circular misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date were as follows:

Authorised: HK$ 1,000,000,000 Shares 100,000,000.00

Authorised:

Issued and fully paid:

268,560,000 Shares 26,856,000.00

All the Shares rank pari passu in all respects, including all rights as to dividend, voting and interests in capital.

3. DISCLOSURE OF INTERESTS

• (a) As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which each of them was taken or deemed to have under such provisions of the SFO); or (b) were required pursuant to section 352 of the SFO, to be entered into the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange were as follows:

– 21 –

GENERAL INFORMATION

APPENDIX II

(i) Interests in Shares

Number of Shares held Name of Director Corporate Percentage of interests shareholding Mr. Hon Ming Kong (Note) 54,900,000 20.44 per cent. Mr. Tsoi Wai Kwong 174,000 0.06 per cent.

Note: These Shares are owned by Highworth Venture Limited, a company incorporated in the British Virgin Islands which is wholly owned by Mr. Hon Ming Kong.

• (ii) Interests in options to subscribe for Shares

As at the Latest Practicable Date, the following Directors held options under the share option scheme of the Company:

			Number of
	Exercise price		share options
Name of Director	per Share	Exercise period	outstanding
	(HK$)
Mr. Hon Ming Kong	4.9600	14 November 2002	2,000,000
		to 13 November 2007
	1.3060	27 August 2003	2,000,000
		to 26 August 2008
Mr. Lee Yu Leung	1.4944	1 September 2002	2,000,000
		to 1 September 2007
	1.3060	27 August 2003	2,000,000
		to 26 August 2008
Mr. Hon Yik Kwong	1.3500	28 July 2003	2,000,000
		to 27 July 2008

Save as disclosed herein, as at the Latest Practicable Date, none of Directors, chief executive or their respective associates had any interests or short positions in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which each of them was taken or deemed to have under such provisions of the SFO); or (b) were required pursuant to section 352 of the SFO, to be entered into the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange.

– 22 –

GENERAL INFORMATION

APPENDIX II

• (b) As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (other than agreements expiring or determinable by the Group within one year without payment of compensation, other than statutory compensation).

• (c) As at the Latest Practicable Date, Adonis Appraisal Limited has no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

4. SUBSTANTIAL SHAREHOLDER’S INTERESTS

As at the Latest Practicable Date, according to the register of interests kept by the Company under section 336 of the SFO, and so far as was known to the Directors, the following persons had an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO or, who were, directly or indirectly interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other member of the Group:

	Number of	Percentage of
Name	Shares held	shareholding
YSH Investments Limited_(Note 1)_	58,916,000	21.94 per cent.
Highworth Venture Limited_(Note 2)_	54,900,000	20.44 per cent.
AWH Fund Ltd.	27,366,000	10.19 per cent.

Notes:

1. Mr. Lai Sai Sang, former Chairman of the Company and existing director of subsidiaries of the Company, has a 90.4 per cent. beneficial interest in YSH Investments Limited.

2. Highworth Venture Limited is a company wholly owned by Mr. Hon Ming Kong, Chairman and executive Director.

Save as disclosed herein, as at the Latest Practicable Date, the Directors are not aware of any other persons who had interests in the Shares or debentures of, or short positions in the Shares which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO or, who was, directly or indirectly interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other member of the Group.

– 23 –

GENERAL INFORMATION

APPENDIX II

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in litigation or arbitration of material importance in which the Company or any of its subsidiaries are engaged and litigation or claims of material importance which are pending or threatened by or against the Company of any of its subsidiaries.

6. CONSENT

Adonis Appraisal Limited has given and has not withdrawn its written consents to the issue of this circular with the inclusion of and references to its names in the form and context in which it appears.

7. MISCELLANEOUS

• (a) The secretary of the Company is Mr. Chan Tak Hing, Kenji. He is a member of the Association of Chartered Certified Accountants, the Hong Kong Society of Accountants and the Taxation Institute of Hong Kong.

• (b) The registered office of the Company is located at P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies. The head office and principal place of business in Hong Kong of the Company is located at Unit 3616, 36th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong.

• (c) The Company’s branch registrar and transfer office in Hong Kong are Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The English text of the circular shall prevail over the Chinese text.

– 24 –

NOTICE OF EGM

==> picture [52 x 53] intentionally omitted <==

HONG TONG HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Hong Tong Holdings Limited (the “Company”) will be held at Unit 3616, 36th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong on Monday, 17 November 2003 at 11:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions which will be proposed as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. “ THAT , conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited (“Listed Committee”) granting the listing of, and permission to deal in, the aggregate of 30,000,000 new shares of HK$0.10 each in the capital of the Company (“Shares”) to be issued to Angola Group Holdings Limited pursuant to the Sale and Purchase Agreement (as defined in the circular dated 27 October 2003 (“Circular”) despatched to the shareholders of the Company, a copy of which marked “A” has been initialled by the Chairman of this meeting for the purpose of identification), the transaction contemplated under the Sale and Purchase Agreement and the issue of the aggregate of 30,000,000 new Shares (“Consideration Shares”) pursuant to the Sale and Purchase Agreement be and are hereby approved and that the directors of the Company be and are hereby authorised to do all acts and things which they may consider necessary, desirable or expedient to implement the same.”

2. “ THAT :

3. (a) subject to the following provisions of this resolution, the exercise by the directors of the Company during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company, and to make or grant offers, agreements or options (including bonds, notes, warrants, debentures and securities convertible into shares of the Company) which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

4. (b) the approval in paragraph (a) above shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options (including bonds, notes, warrants, debentures and securities convertible into shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

– 25 –

NOTICE OF EGM

• (c) the aggregate nominal amount of share capital of the Company 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 (a) above, otherwise than pursuant to (i) a Rights Issue (as defined below), (ii) an issue of shares pursuant to any existing specific authority, including upon the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any bonds, notes, debentures or securities convertible into shares of the Company; (iii) any employee share option scheme or similar arrangement for the time being adopted by the Company; and (iv) an issue of shares of the Company in lieu of the whole or part of a dividend on shares of the Company in accordance with the bye-laws of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing of this resolution and the said approval shall be limited accordingly; and

• (d) for the purposes of this resolution:

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

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

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

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

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company made to holders of shares whose names appear on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares (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, or in any territory outside, Hong Kong).”

– 26 –

NOTICE OF EGM

1. “ THAT , subject to the passing of Resolution numbered 2 as set out in the notice convening this meeting (the “Notice”), the general mandate granted to the directors of the Company to allot, issue and deal with additional shares of the Company pursuant to Resolution numbered 2 set out in the Notice be and is hereby extended by the addition to it of an amount representing the aggregate nominal amount of the shares in the capital of the Company which are repurchased by the Company pursuant to and since the granting to the Company of the general mandate to repurchase shares in accordance with the resolution passed in the annual general meeting of the Company held on 29 August 2003.”

By order of the Board Chan Tak Hing, Kenji Company Secretary

Hong Kong, 27 October 2003

Head Office and Principal Place of Business: Unit 3616 36th Floor, China Merchants Tower Shun Tak Centre 168-200 Connaught Road Central Sheung Wan Hong Kong

Notes:

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

2. A form of proxy for use at the meeting is enclosed.

3. In order to be valid , a form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited at the Company’s branch registrar and transfer office in Hong Kong, Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time of the meeting or any adjournment of it.

4. Completion and return of the form of proxy shall not preclude a member of the company from attending and voting in person at the meeting or any adjourned meeting or on the poll concerned and, in such event, the form of proxy shall be deemed to be revoked.

– 27 –