11:43     RUILI HOLD<00491>&HANNY HOLDINGS<00275>-Joint Ann.&Resume-20        

    required to subscribe any untaken Rights Shares even if no Shareholders   
    (other than Mr. Yu and Dr. Chan) take up the Rights Shares                
    provisionally allotted to them. On this basis, Tai Fook will not be       
    obliged to make a general offer for the Shares under the Takeovers Code   
    as a result of the performance of its obligations under the               
    Underwriting Agreement.                                                   
                                                                              
    The Stock Exchange has stated that if, at the date of completion of the   
    Rights Issue, less than 25% of the Shares are held by the public or if    
    the Stock Exchange believes that:                                         
                                                                              
    ?a false market exists or may exist in the trading in the Shares; or      
                                                                              
    ?there are too few shares of the Shares in public hands to maintain an    
    orderly market,                                                           
                                                                              
    then it will consider exercising its discretion to suspend trading in     
    the Shares until a sufficient public float is attained. In this           
    connection, it should be noted that upon completion of the Rights         
    Issue, there may be insufficient public float for the Shares and          
    therefore trading in the Shares may be suspended until a sufficient       
    level of public float is attained.                                        
                                                                              
    Board of directors and management of the Company                          
                                                                              
    Currently neither Hanny nor Dr. Chan has intention to nominate            
    directors to the Board of the Company. However, in the event that Hanny   
    is required to take up any Rights Shares pursuant to the Underwriting     
    Agreement and as a result becomes a substantial shareholder of the        
    Company, Hanny may consider seeking appointment of its nominee(s) to      
    the Board of the Company for the purpose of protecting its interest in    
    the Company as a substantial shareholder. The SFC has indicated that it   
    would then re-consider whether there would be any effective change in     
    control of the Company, taking into consideration all relevant factors    
    at that time, including the change in composition of the Board of the     
    Company. Hanny will take note of the relevant provisions of the           
    Takeovers Code in respect of any change of control of the Company and     
    will make all necessary and full compliance of the requirements in        
    accordance with the Takeovers Code.                                       
                                                                              
    Dilution effect on Shareholders                                           
                                                                              
    In view of the future dilution of existing Shareholders on the exercise   
    of the conversion rights attaching to the Convertible Notes, the          
    Company will keep the Shareholders informed of the level of dilution      
    and details of conversion as follows:                                     
                                                                              
    (a)  the Company will make a monthly announcement (the "Monthly           
    Announcement") on the website of the Stock Exchange. Such announcement    
    will be made on or before the fifth business day following the end of     
    each calendar month and will include the following details in a table     
    form:                                                                     
                                                                              
    (i)  whether there is any conversion of the Convertible Notes during      
    the relevant month. If yes, details of the conversion(s), including the   
    conversion date, number of new Shares issued, conversion price for each   
    conversion. If there is no conversion during the relevant month, a        
    negative statement to that effect;                                        
                                                                              
    (ii)  the number of outstanding Convertible Notes after the conversion,   
    if any;                                                                   
                                                                              
    (iii)  the total number of Shares issued pursuant to other transactions   
    during the relevant month, including Shares issued pursuant to exercise   
    of options under any share option scheme(s) of the Company; and           
                                                                              
    (iv)  the total issued share capital of the Company as at the             
    commencement and the last day of the relevant month; and                  
                                                                              
    (b)  in addition to the Monthly Announcement, if the cumulative amount    
    of new Shares issued pursuant to the conversion of the Convertible        
    Notes reaches 5% of the issued share capital of the Company as            
    disclosed in the last Monthly Announcement or any subsequent              
    announcement made by the Company in respect of the Convertible Notes      
    (as the case may be) (and thereafter in a multiple of such 5%             
    threshold), the Company will make an announcement on the website of the   
    Stock Exchange including details as stated in (a) above for the period    
    commencing in respect of the Convertible Notes (as the case may be) up    
    to the date on which the total amount of Shares issued pursuant to the    
    conversion amounted to 5% of the issued share capital of the Company as   
    disclosed in the last Monthly Announcement or any subsequent              
    announcement made by the Company in respect of the Convertible Notes      
    (as the case may be).