Almana Limited — Proxy Solicitation & Information Statement 2003

May 30, 2003

IMPORTANT

The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) 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.

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

If you have sold all your shares in Medical China Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

==> picture [93 x 61] intentionally omitted <==

MEDICAL CHINA LIMITED 神州醫療科技有限公司[*]

(Incorporated in the Bermuda with limited liability)

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

A notice convening the Annual General Meeting of Medical China Limited (the “Company”) to be held at Salon IV, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wan Chai, Hong Kong on Monday, 30th June, 2003 at 10:00 a.m. is set out on pages 8 to 11 of this circular. A form of proxy for the Annual General Meeting (“AGM”) is enclosed with this circular. Whether you are able to attend or not, please complete and return the enclosed form of proxy to the share registrar of the Company, that is Central Registration Hong Kong Limited, at Rooms 1901–5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting. The completion and delivery of a form of proxy will not preclude you from attending and voting at the AGM in person.

The circular, for which the directors (“Directors”) of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market (the “GEM Listing Rules”) of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors of the Company having made all reasonable enquires, confirm that, to the best of their knowledge and belief, (i) the information contained in this circular is accurate and complete in all material aspects and not misleading; (ii) there are no other matters the omission of which would make any statement herein misleading; and (iii) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

The circular will remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for 7 days from the date of its posting.

* For identification only

29th May, 2003

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

– i –

LETTER FROM THE BOARD OF DIRECTORS

==> picture [93 x 62] intentionally omitted <==

MEDICAL CHINA LIMITED 神州醫療科技有限公司[*]

(Incorporated in the Bermuda with limited liability)

Executive directors: LI Nga Kuk, James (Chairman) LI Wo Hing (General Manager) NG Kwai Sang CHAN Shut Li, William CHAN Siu Sun LI Tai To, Titus

Non-executive director: CHEN Minshan

Independent non-executive directors: GUO Guoqing FAN Wan Tat HAN K. Huang

Registered office: Cedar House 41 Cedar Avenue Hamilton HM12 Bermuda

Principal place of business: Office B 21st Floor Teda Building 87 Wing Lok Street Hong Kong

To Shareholders of the Company

29th May, 2003

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the AGM of the Company to be held at Salon IV, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wan Chai, Hong Kong on Monday, 30th June, 2003 at 10:00 a.m..

* For identification only

– 1 –

LETTER FROM THE BOARD OF DIRECTORS

BACKGROUND

On 12th June, 2002, resolutions were passed by the shareholders of the Company giving general unconditional mandates (“general mandates”) to the directors of the Company to:

• (a) allot, issue and deal with additional shares of the Company and to make or grant offers, agreements, options and warrants not exceeding 20% of the aggregate nominal value of the share capital of the Company in issue at the date of passing of this resolution on 12th June, 2002;

• (b) repurchase shares not exceeding 10% of the aggregate nominal value of the shares of the Company in issue at the date of passing this resolution on 12th June, 2002; and

• (c) add to the general mandate for issuing shares set out in (a) above the number of shares repurchased by the Company pursuant to the Repurchase Mandate set out in (b) above.

These general mandates will expire at the conclusion of the AGM and the purpose of this circular is to request your support to renew the general mandates at the AGM as referred to below.

PROPOSED GENERAL MANDATE TO REPURCHASE SHARES

At the AGM, it will be proposed, by way of an ordinary resolution, that the Directors of the Company be given a general and unconditional mandate to exercise all powers of the Company to repurchase shares on the Growth Enterprise Market (“GEM”) of the Stock Exchange in the Company up to a maximum of 10% of the shares of the Company in issue at the date of passing the ordinary resolution (the “Repurchase Mandate”).

The Repurchase Mandate, if approved, will continue in force until the conclusion of the next AGM of the Company or until revoked or varied by ordinary resolution of shareholders in general meeting prior to the next AGM.

The Company may only repurchase its shares on GEM if:

• (i) the shares proposed to be repurchased by the Company are fully paid up;

• (ii) the Company has previously sent to its shareholders the explanatory statement set out on pages 5 to 7 of this circular; and

• (iii) the shareholders of the Company have in general meeting approved the Repurchase Mandate and the relevant documents in connection therewith have been delivered to the Stock Exchange.

– 2 –

LETTER FROM THE BOARD OF DIRECTORS

An explanatory statement containing information relating to the Repurchase Mandate and as required pursuant to the GEM Listing Rules of the Stock Exchange, in particular Rule 13.08, is set out on pages 5 to 7 to this circular. This explanatory statement provides you with information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution relating to the Repurchase Mandate.

PROPOSED GENERAL MANDATE TO ISSUE NEW SHARES

At the AGM, it will also be proposed, by way of ordinary resolution, that the Directors of the Company be given a general and unconditional mandate to exercise all powers of the Company to issue new shares in the Company up to 20% of the aggregate nominal value of the issued share capital of the Company on the date of the passing of the ordinary resolution (“New Issue Mandate”). In addition, it is further proposed, by way of a separate ordinary resolution, that the New Issue Mandate be extended so that the Directors of the Company be given a general mandate to issue further shares in the Company of an aggregate nominal value equal to the aggregate nominal value of the share capital of the Company repurchased under the Repurchase Mandate. Any issue of new shares in the Company is subject to approval from the Stock Exchange for the listing of and permission to deal in such new shares.

ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting to be held at Salon IV, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wan Chai, Hong Kong on Monday, 30th June 2003, at 10:00 a.m. is set out on pages 8 to 11 to this circular.

A form of proxy for the AGM is enclosed with this circular. Whether or not you intend to be present at the AGM, you are requested to complete the form of proxy and return it to the share registrar of the Company, that is Central Registration Hong Kong Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for the meeting. The completion of a form of proxy will not preclude you from attending and voting at the meeting in person.

– 3 –

LETTER FROM THE BOARD OF DIRECTORS

RECOMMENDATION

The Directors are of the opinion that the proposals referred to in this circular are in the best interests of the Company and its shareholders and recommend you to vote in favour of the resolutions relating to the general mandates to be proposed at the AGM.

Yours faithfully,

On behalf of the Board of Directors

Li Nga Kuk, James Chairman

– 4 –

EXPLANATORY STATEMENT

APPENDIX

This is an explanatory statement given to all shareholders relating to a resolution to be proposed at the forthcoming AGM authorizing the Repurchase Mandate.

This explanatory statement contains all the information required pursuant to Rule 13.08 and other relevant provisions of the GEM Listing Rules which is set out as follows:

1. EXERCISE OF THE REPURCHASE MANDATE

If the Repurchase Mandate was exercised in full, on the basis of 835,000,000 shares in issue as at the latest practicable date (“Latest Practicable Date”), could result in up to 83,500,000 shares be repurchased by the Company during the period up to the conclusion of the next AGM of the Company, the expiration of the period within which the next AGM of the Company is required by any applicable law or the articles of association of the Company to be held or when it is revoked or varied by an ordinary resolution by the shareholders in general meeting, whichever is the earliest.

2. REASONS FOR REPURCHASES

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

3. FUNDING OF REPURCHASES

Any repurchases will only be funded out of funds of the Company legally available for the purposes in accordance with its memorandum and articles of association of the Company and the laws of the Bermuda.

4. EFFECT OF EXERCISING THE REPURCHASE MANDATE

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in its latest management accounts) in the event that the Repurchase Mandate is exercised in full. However, the Directors do not propose to exercise the Repurchase Mandate to such an 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.

– 5 –

EXPLANATORY STATEMENT

APPENDIX

5. DISCLOSURE OF INTERESTS

None of the Directors and, to the best of their knowledge, having made all reasonable enquiries, none of their respective associates, have any present intention, if the Repurchase Mandate is exercised, to sell any shares to the Company or its subsidiaries.

No connected person (as defined in the GEM Listing Rules) has notified the Company that they have a present intention to sell shares to the Company if the Repurchase Mandate is exercised.

6. DIRECTOR’S UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the Repurchase Mandate in accordance with the GEM Listing Rules and the applicable laws of the Bermuda.

7. TAKEOVER CODE CONSEQUENCES

If as a result of a repurchase of shares, 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 the Hong Kong Code on Takeovers and Mergers (the “Takeover Code”). As a result, a shareholder, or a group of shareholders acting in concert, depending on the level of increase in the shareholder’s interests, may obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeover Code. The Directors are not aware of any consequences which could arise under the Takeover Code as a consequence of any repurchases pursuant to the Repurchase Mandate.

As at the Latest Practicable Date, People Market Management Limited (“PMM”), which is the main shareholder of the Company, held approximately 25.43% of the shares issued by the Company. As at the latest Practicable Date, the Directors are not aware of any consequences for PMM under the Code as a result, solely of the Directors exercising the Repurchase Mandate in full.

8. SHARE PURCHASE MADE BY THE COMPANY

No repurchases of securities have been made by the Company during the period from 31st December, 2001 (date of listing) to the Latest Practicable Date.

– 6 –

EXPLANATORY STATEMENT

APPENDIX

9. CONNECTED PERSON

No connected person (as defined in the GEM Listing Rules) has notified the Company that it has a present intention to sell shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the shareholders.

10. SHARE PRICES

The highest and lowest prices at which the shares were traded on the GEM during each of the previous twelve months preceding the Latest Practicable Date were as follows:

	Shares	Shares
	Highest	Lowest
	HK$	HK$
2002
May	0.69	0.62
June	0.61	0.48
July	0.63	0.50
August	0.50	0.285
September	0.32	0.245
October	0.25	0.185
November	0.215	0.184
December	0.195	0.163
2003
January	0.189	0.153
February	0.16	0.125
March	0.13	0.09
April (1 April – 7 April)	0.125	0.10

• Trading in the shares has been suspended from 2:30 p.m. 7 April 2003 up to the Latest Practicable Date.

– 7 –

NOTICE OF ANNUAL GENERAL MEETING

==> picture [93 x 62] intentionally omitted <==

MEDICAL CHINA LIMITED 神州醫療科技有限公司[*]

(Incorporated in the Bermuda with limited liability)

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of Medical China Limited (the “Company”) will be held at Salon IV, Mezzanine Floor, Grand Hyatt Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on Monday, 30th June, 2003 at 10:00 a.m. to transact the following ordinary business:

1. to receive and consider the audited consolidated financial statements and the reports of the directors and auditors of the Company for the year ended 31st December, 2002;

2. to re-elect directors and to authorise the board of directors to fix their remuneration;

3. to re-appoint auditors and to authorise the board of directors to fix their remuneration;

4. As special business, to consider and, if thought fit, pass with or without alterations, the following resolution as ordinary resolutions:

“ THAT:

• (a) subject to paragraph (c) below, pursuant to the Rules Governing the Listing of Securities on The Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (“GEM Listing Rules”), the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with (otherwise than by way of rights issue or pursuant to the exercise of options granted under any of the Company’s share option schemes or any scrip dividend scheme or similar arrangements providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company pursuant to the articles of association of the Company from time to time) additional shares in the capital of the Company and to make or grant offers, agreements and options which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

* For identification only

– 8 –

NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall be in addition to any other authorization given to the directors of the Company and shall authorise the directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period (as hereinafter defined);

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) and issued by the directors pursuant to the approval in paragraph (a) above, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

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

• (i) the conclusion of the next AGM of the Company;

• (ii) the expiration of the period within which the next AGM of the Company is required by any other applicable law or articles of association of the Company to be held; and

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

“ Rights Issue ” means an offer shares in the Company, or offer or issue of warrants, options or other securities giving rights to subscribe for shares open for a period fixed by the Directors to holders of shares in the Company on the register on a fixed record date in proportion to their holdings of shares (subject to such exclusion or other arrangements as the Directors 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, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction applicable to the Company, or any recognized regulatory body or any stock exchange applicable to the Company).”

– 9 –

NOTICE OF ANNUAL GENERAL MEETING

1. As special business, to consider and if thought fit, pass with or without amendments, the following resolution as an ordinary resolution:

“ THAT :

• (a) subject to paragraph (b) of this resolution, the exercise by the directors during the Relevant Period (as defined in resolution no.4(d) set out in the notice of this meeting) of all powers of the Company to repurchase ordinary shares in the capital of the Company on the Stock Exchange or on any other stock exchange on which the shares of the Company may be listed and recognized by the Securities and Futures Commission and the Stock Exchange for such purpose, subject to and in accordance with all applicable laws and requirements of the GEM Listing Rules or any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares of the Company which is authorised to repurchase pursuant in paragraph (a) of this resolution and shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution and the authority pursuant to paragraph (a) of this resolution shall be limited accordingly.”

• As special business, to consider and if, pass with or without any amendments, the following resolution as an ordinary resolution:

• “THAT conditional upon resolutions nos. as 4 and 5 set out in the notice convening this meeting duly passed, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot and issue shares pursuant to resolution no. 4 set out in the notice convening this meeting be and is hereby extended by the addition to the aggregate nominal amount of the share capital which may be allotted or agreed conditionally or unconditionally to be allotted any issued by the Directors of the Company pursuant to such general mandate 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 resolution no. 5 set out in the notice convening this meeting, provided that such amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing this resolution.”

By order of the board of directors

Medical China Limited Li Nga Kuk, James Chairman

Hong Kong, 29th May, 2003

– 10 –

NOTICE OF ANNUAL GENERAL MEETING

Registered office: Head office and Principal place Cedar House of business in Hong Kong: 41 Cedar Avenue Office B, 21st Floor Hamilton HM12 Teda Building Bermuda 87 Wing Lok Street Hong Kong

Notes:

1. A proxy form to be used for the meeting is enclosed.

2. Any member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.

3. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such instrument of proxy on behalf of the corporation without further evidence of the facts.

4. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s registrar in Hong Kong, Central Registration Hong Kong Limited, Rooms 1901–5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than forty-eight (48) hours before the time appointed for holding the meeting.

5. Where there are joint holders of any share any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.

– 11 –