09:38     WAI YUEN TONG<00897> - Announcement (4)                             

    particularly with respect to their proportional interests in              
    the Company and voting rights, be affected in any way.                    
                                                                              
    CONDITIONS OF THE CAPITAL REORGANISATION                                  
                                                                              
    The Capital Reorganisation is conditional upon:                           
                                                                              
    (a)     the passing of a special resolution by the Shareholders to        
    approve the Capital Reorganisation at the SGM;                            
                                                                              
    (b)     compliance with the relevant procedural requirements under        
    the Companies Act to effect the Capital Reorganisation                    
    (including a publication of a press notice in an appointed                
    newspaper in Bermuda); and                                                
                                                                              
    (c)     the Listing Committee of the Stock Exchange granting the          
    listing of, and permission to deal in, the New Shares in issue            
    after the Capital Reorganisation and (if required) the Shares             
    which may fall to be issued upon exercise of the 2005 Convertible         
    Notes and Share Options (if any).                                         
                                                                              
    Assuming that all the above conditions are fulfilled, it is               
    expected that the Capital Reorganisation will become effective            
    on the Business Day following the passing of the special                  
    resolution to be proposed at the SGM. Further details regarding           
    the expected timetable for the Capital Reorganisation, parallel           
    trading arrangements, arrangements for odd lot facilities and             
    free exchange of share certificates will be included in the               
    circular to the Shareholders.                                             
                                                                              
    Since the Capital Reorganisation is subject to the fulfillment            
    of a number of conditions, the Capital Reorganisation may or              
    may not complete. Shareholders and potential investors in the             
    Company are advised to exercise caution when dealing in the               
    Existing Shares.                                                          
                                                                              
    REASONS FOR THE CAPITAL REORGANISATION                                    
                                                                              
    Under the Bye-laws and the Companies Act, the credit arising              
    from the Capital Reduction and credited to the contributed                
    surplus account of the Company may be used to offset the loss             
    of the Company. On the basis that 349,086,922 Consolidated Shares         
    will be in issue immediately before the implementation of the             
    Capital Reduction, a credit in the amount of approximately                
    HK$31,417,823 will arise as a result of the Capital Reduction.            
    If any of the conversion rights attaching to the 2005 Convertible         
    Notes are exercised resulting in Existing Shares being issued             
    before the effective date of the Capital Reorganisation, the              
    number of Existing Shares subject to the Share Consolidation              
    and Capital Reduction, and the credit arising from the Capital            
    Reduction will be increased accordingly. Assuming that the whole          
    of the HK$16,000,000 outstanding principal amount of the 2005             
    Convertible Notes is converted in full at HK$0.08 per Existing            
    Share, 200,000,000 additional Existing Shares will be issued              
    and 369,086,922 Consolidated Shares will be subject to the                
    Capital Reduction, and a credit in the amount of approximately            
    HK$33,217,822 will arise as a result of the Capital Reduction.            
                                                                              
    The aggregate of the amounts arising from the Capital Reduction           
    will be credited to the contributed surplus account of the                
    Company and be utilized to eliminate any loss of the Company.             
    The contributed surplus account may be used in future for such            
    purposes as the Board may direct in accordance with the Companies         
    Act and the Bye-laws. As a result of elimination of the loss              
    of the Company, the Company may declare dividends to Shareholders         
    at an earlier opportunity than by generating profits to offset