09:37     HUTCH TELECOM<02332> & HGC HOLDINGS<00757>-Ann. & Resumed-10        

    should be noted that the average daily trading value of HGCH              
    Shares for the 1 month period from 23 March 2005 up to the day            
    prior to the HGCH Last Trading Day, or 22 April 2005, has fallen          
    to approximately HK$3.45 million. Comparatively, and over the             
    same 3 month and 1 month periods, the average daily trading value         
    of HTIL Shares was approximately HK$34.99 million and HK$20.02            
    million, respectively.                                                    
                                                                              
    In view of the above, the HTIL Board and the HGCH Board believe           
    that the ability of HGCH to take advantage of being a listed              
    company to raise funds from the equity markets is limited and             
    consider that the costs associated with the maintenance of HGCH's         
    listing on the Stock Exchange and its publicly listed status              
    are no longer warranted.                                                  
                                                                              
    Notwithstanding, HTIL and HGCH retain a long-standing commitment          
    to and confidence in the businesses of HGCH and plan to continue          
    to invest to develop HGCH's businesses. Furthermore, and                  
    particularly in light of HTIL's public listing subsequent to              
    HGCH's effective listing in March 2004, the Proposal will                 
    simplify the group structure of HTIL and HGCH, as well as will            
    offer greater operational flexibility and increased financing             
    flexibility. In addition, it will simplify and hence improve              
    the transparency of HTIL's group structure and ultimately                 
    achieve greater efficiency on a long-term strategic as well as            
    day-to-day operating basis, and hence enhance their                       
    competitiveness in the market place.                                      
                                                                              
    In light of all of the above, HTIL has requested the HGCH                 
    Directors to put forward the Proposal, on terms which the HTIL            
    Board considers full and fair, to the Scheme Shareholders for             
    consideration. Value of the Cancellation Consideration under              
    the Cash Alternative and the Share Alternative represents a               
    premium of approximately 36.84% and 48.38% respectively over              
    the closing price of the HGCH Shares on the HGCH Last Trading             
    Day as well as a premium of approximately 43.09% and 55.16%               
    respectively over the average closing price of the HGCH Shares            
    over the last 12 months. The HTIL Board and the HGCH Board believe        
    that the Proposal represents a good opportunity for all Scheme            
    Shareholders to realise their investments in HGCH at a price              
    significantly above the levels the HGCH Shares have traded in             
    any material volume for a number of months and in excess of any           
    price that they might obtain under current market conditions              
    if the Proposal does not take place and, if they elect the Share          
    Alternative, to exchange for shares of a more substantial and             
    diversified company with more liquidity.                                  
                                                                              
    CONDITIONS OF THE PROPOSAL                                                
                                                                              
    The Proposal will become effective and binding on HGCH and all            
    Scheme Shareholders subject to the fulfilment or waiver, as               
    applicable, of the following conditions:                                  
                                                                              
    (a)     the approval (by way of a poll) of the Scheme by a majority       
    in number of the HGCH Independent Shareholders present and voting         
    either in person or by proxy at the Court Meeting representing            
    not less than three-fourths in value of the HGCH Shares that              
    are voted either in person or by proxy by the HGCH Independent            
    Shareholders at the Court Meeting, provided that the Scheme is            
    not disapproved by the HGCH Independent Shareholders at the Court         
    Meeting holding more than 10% in value of all the HGCH Shares             
    held by the HGCH Independent Shareholders;                                
                                                                              
    (b)     the passing of a special resolution (by way of a poll) to         
    approve and give effect to the Scheme (including the cancellation         
    of the Scheme Shares and the reduction of the issued share capital        
    of HGCH) by a majority of at least three-fourths of the votes             
    cast by the HGCH Shareholders present and voting, in person or            
    by proxy, at a special general meeting of HGCH;