Beijing Beida Jade Bird Universal Sci-Tech Company Limited — Proxy Solicitation & Information Statement 2004

Apr 19, 2004

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This circular appears for information purposes only and does not constitute an invitation, purchase or subscription for the securities.

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 or transferred all your H Shares in Beijing Beida Jade Bird Universal Sci-Tech Company Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, make 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.

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北京北大青鳥環宇科技股份有限公司 BEIJING BEIDA JADE BIRD UNIVERSAL SCI-TECH COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock code: 8095)

MAJOR TRANSACTION RELATING TO THE DISPOSAL OF SHARES IN SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

Financial adviser

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A letter from the board of directors of Beijing Beida Jade Bird Universal Sci-Tech Company Limited dated 19 April 2004 is set out on pages 4 to 7 of this circular.

A notice convening a special general meeting of Beijing Beida Jade Bird Universal Sci-Tech Company Limited to be held at Room 301, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing, the PRC on Friday, 4 June 2004 at 11:00 a.m. is set out on pages 19 to 20 in this circular. For holders of H Shares of the Company, whether or not you are able to attend the meeting, please complete and return the enclosed reply slip to Unit 02, 7th Floor, Asia Pacific Centre, 8 Wyndham Street, Central, Hong Kong on or before 4:00 p.m. on Saturday, 15 May 2004 and the form of proxy in accordance with the instructions printed thereon to the office of the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited, Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 24 hours before the time appointed for the holding of the special general meeting. For holders of Promoter Shares of the Company, whether or not you are able to attend the meeting, please complete and return the enclosed reply slip and form of proxy in accordance with the instructions printed thereon to the place of business of the Company in Beijing at 3rd Floor, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing 100871, PRC as soon as practicable but in any event, for the reply slip, on or before 4:00 p.m. on Saturday, 15 May 2004 and the form of proxy not less than 24 hours before the time appointed for the holding of the special general meeting. Completion of the form of proxy will not preclude you from attending and voting at the meeting or any adjourned meeting should you so wish.

19 April 2004

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE

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 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. GEM-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 –

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information on SMIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the Disposal and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Shareholders’ Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix I – Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix II – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

– ii –

DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context requires otherwise:

“Board”	board of Directors
“Closely Allied Group”	a closely allied group of the shareholders of the Company,
	namely Beijing Tianqiao Beida Jade Bird Sci-Tech Company
	Limited, Beijing Beida Jade Bird Limited, Beijing Beida
	Jade Bird Software System Co., Dynamic Win Assets
	Limited, Beijing Beida Yu Huan Microelectornics System
	Engineering Company, Dragon Air Investments Limited and
	Hinet Company Limited
“Company”	北京北大青鳥環宇科技股份有限公司(Beijing Beida Jade
	Bird Universal Sci-Tech Company Limited), a sino-foreign
	joint stock limited company incorporated in the PRC with
	limited liability with its H Shares listed on GEM
“Capital Reorganisation”	the conversion of SMIC Preference Shares into SMIC
	Ordinary Shares and the splitting of SMIC Ordinary Shares
	on a 10-for-1 basis, effected upon completion of the Global
	Offering
“Directors”	directors of the Company
“Disposal”	the disposal of 156,842,000 SMIC Ordinary Shares by JBU
	Development pursuant to the Offer for Sale
“GEM”	The Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Global Offering”	the New Issue and the Offer for Sale
“Group”	the Company and its subsidiaries
“H Shares”	overseas-listed foreign shares in the ordinary share capital
	of the Company, with a nominal value of RMB0.1 each and
	which are listed on GEM
“JBU Cayman”	Beida Jade Bird Universal (Cayman) Investment Company
	Limited, a company incorporated in the Cayman Islands
	and a wholly-owned subsidiary of the Company
“JBU Development”	Beida Jade Bird Universal (Cayman) Development Company
	Limited, a company incorporated in the Cayman Islands
	and a wholly-owned subsidiary of the Company

– 1 –

DEFINITIONS

“Latest Practicable Date”	15 April 2004, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“New Issue”	the issue of new shares by SMIC in connection with the
	listings of SMIC on the Stock Exchange and the New York
	Stock Exchange
“Offer for Sale”	the sale of existing shares of SMIC by some of the existing
	shareholders of SMIC in connection with the listing of
	SMIC on the Stock Exchange and the New York Stock
	Exchange
“Option”	the over-allotment option granted by certain existing
	shareholders of SMIC to the underwriters of the Global
	Offering pursuant to which the underwriters may, during
	the period up to 10 April 2004, request certain existing
	shareholders of SMIC to sell an aggregate of up to
	772,727,000 additional SMIC Ordinary Shares at the selling
	price of HK$2.69 per share
“PRC”	People’s Republic of China
“Promoter Shares”	ordinary shares issued by the Company with a nominal value
	of RMB0.10 each, which are subscribed for by the promoters
	of the Company
“Shares”	H Shares and Promoter Shares
“Shareholders”	the holders of H Shares and Promoter Shares
“SGM”	the special general meeting of the Company to be held for
	the purpose of approving, ratifying and confirming the
	Disposal by the Shareholders
“SMIC”	Semiconductor Manufacturing International Corporation, a
	company incorporated in the Cayman Islands
“SMIC Ordinary Share(s)”	ordinary share(s) of SMIC
“SMIC Preference Share(s)”	various series of convertible preference share(s) of SMIC
	which at the option of holders or upon occurrence of certain
	events are convertible into SMIC Ordinary Share(s)

– 2 –

DEFINITIONS

“SMIC Series A-1	Series A-1 non-convertible preference shares of SMIC,
Non-Convertible	which are non-convertible and which have been redeemed
Preference Shares”	by SMIC for a nominal amount upon closing of the Global
	Offering
“SMIC Shanghai”	Semiconductor Manufacturing International (Shanghai)
	Corporation, a limited company incorporated in the PRC
	and a wholly-owned subsidiary of SMIC
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“US$”	United States dollars, the lawful currency of the United
	States of America
“RMB”	Renminbi, the lawful currency of the PRC
“HK$”	Hong Kong dollars, the lawful currency of the Hong Kong
	Special Administrative Region of the PRC

Unless otherwise specified in this circular and for the purpose of illustration only, translation rates have been used as follows:

HK$7.7740 = US$1.00 RMB8.2781 = US$1.00 HK$0.9335 = RMB1.00

No representation is made that any amounts in US$ or HK$ or RMB have been or could be converted at the above rate or at any other rates or at all.

– 3 –

LETTER FROM THE BOARD

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北京北大青鳥環宇科技股份有限公司 BEIJING BEIDA JADE BIRD UNIVERSAL SCI-TECH COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

Executive Directors: Mr. Xu Zhen Dong (Chairman) Mr. Xu Zhi Xiang Prof. Zhang Wan Zhong

Non-Executive Directors: Mr. Lo Lin Shing, Simon Mr. Liu Yong Jin Mr. Hao Yi Long Mr. Wu Min Sheng Mr. Li Li Xin

Independent Non-Executive Directors: Prof. Nan Xiang Hao Mr. Chin Man Chung, Ambrose

Legal Address: Rooms 1117/1119 Zhongcheng Building Haidian Road Beijing 100080 PRC

Principal place of business in the PRC: 3rd Floor, Beida Jade Bird Building No. 207 Chengfu Road Haidian District Beijing 100871 PRC

Place of business in Hong Kong: Unit 02, 7th Floor Asia Pacific Centre 8 Wyndham Street Central Hong Kong

19 April 2004

MAJOR TRANSACTION RELATING TO THE DISPOSAL OF SHARES IN SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

INTRODUCTION

As announced by the Company on 6 September 2001, JBU Cayman, a wholly-owned subsidiary of the Company, subscribed for 54,000,540 SMIC Preference Shares and 54,000,540 SMIC Series A-1 Non-Convertible Preference Shares, representing approximately 5.29% of the then issued share capital of SMIC, for an aggregate consideration of US$60 million (equivalent to approximately RMB500 million). In June 2002, JBU Cayman assigned its entire interest in SMIC to JBU Development, a wholly-owned subsidiary of the Company.

– 4 –

LETTER FROM THE BOARD

On 9 March 2004, the Company announced that JBU Development would dispose of up to 240,000,000 SMIC Ordinary Shares in the initial public offering of SMIC. The purpose of this circular is to provide you with (i) more information in relation to the Disposal; and (ii) a notice convening the SGM.

THE DISPOSAL

On 8 March 2004, SMIC issued its prospectus in relation to the Global Offering. Effective upon completion of the Global Offering on Thursday, 18 March 2004 (Hong Kong time), all the SMIC Preference Shares (other than Series A-1 Non-Convertible Preference Shares) were converted into SMIC Ordinary Shares pursuant to the Capital Reorganisation. Immediately after the Capital Reorganisation but before the Offer for Sale, JBU Development held 540,005,400 SMIC Ordinary Shares. Pursuant to the Offer for Sale, JBU Development disposed of 156,842,000 SMIC Ordinary Shares. The offer price per SMIC Ordinary Share was HK$2.69. Accordingly, the gross proceeds to be received by JBU Development from such disposal is approximately HK$422 million. After the Disposal, JBU Development will continue to hold 383,163,400 SMIC Ordinary Shares, representing approximately 2.1% of the issued share capital of SMIC as enlarged by the New Issue.

Pursuant to the Option, which may be exercised by the joint book runners of the Global Offering during the period up to 10 April 2004, JBU Development may be required to further dispose of up to 68,890,000 additional SMIC Ordinary Shares. The Option has not been exercised and JBU Development is not required to dispose of additional SMIC Ordinary Shares.

INFORMATION ON SMIC

The principal business of SMIC is its investment in SMIC Shanghai, which is principally engaged in manufacture, probe test and testing of semiconductor (silicon and compound semiconductor), integrated circuit chips, research and development, design, technical services, mask manufacture, testing and packaging and sale of proprietary IC-related products.

The audited loss of SMIC for the two years ended 31 December 2003 were approximately US$102,603,000 and US$103,262,000 respectively. The audited consolidated net tangible assets of SMIC as at 31 December 2002 and 31 December 2003 were approximately US$856,244,000 and US$1,443,995,000 respectively.

REASONS FOR THE DISPOSAL AND USE OF PROCEEDS

The Directors consider that the Disposal will allow the Company to realize part of its investment in SMIC at a profit and therefore is in the interest of the Company. Based on the book cost for the 156,842,000 SMIC Ordinary Shares disposed of by JBU Development and the offer price of HK$2.69 per share, JBU Development recorded a gain of approximately HK$269 million from the Disposal, which gain will be reflected in the Company’s financial statements for the year ending 31 December 2004. The gross and net proceeds from the Disposal amounted to approximately HK$422 million and HK$408 million respectively. It is intended that part of the proceeds of approximately HK$300 million will be used for repayment of bank loans utilised for financing the Group’s investment in SMIC and the remaining balance of approximately HK$108 million will be used as general working capital of the Company.

– 5 –

LETTER FROM THE BOARD

SHAREHOLDERS’ APPROVAL

The Disposal constitutes a major transaction pursuant to Rule 19.06 of the GEM Listing Rules and is subject to approval by the Shareholders. Written confirmations from the Closely Allied Group, namely Beijing Tianqiao Beida Jade Bird Sci-Tech Company Limited, Beijing Beida Jade Bird Limited, Beijing Beida Jade Bird Software System Co., Dynamic Win Assets Limited, Beijing Beida Yu Huan Microelectronics System Engineering Company, Dragon Air Investments Limited and Hinet Company Limited, holding approximately 52.5% of the issued share capital of the Company approving the Disposal have been obtained. All the members of the Closely Allied Group were promoters of the Company and accordingly each of the members of the Closely Allied Group has been a Shareholder since the incorporation of the Company in March 2000. The members of the Closely Allied Group have voted unanimously in the past on shareholders’ resolutions of the Company in addition to routine resolutions at the Company’s annual general meetings, e.g. the resolution to approve the subdivision of the shares of the Company in October 2000 and the resolution to approve the acquisition of 5.29% interest in SMIC in December 2001.

As written confirmations from the members of the Closely Allied Group approving the Disposal have been obtained, in accordance with Rule 19.39 of the GEM Listing Rules, the Company need not hold a general meeting to consider the Disposal. However, pursuant to its Articles of Association, the Company would hold the SGM as a procedural formality for the purpose of approving, ratifying and confirming the Disposal by the Shareholders.

None of the Shareholders has any interest in the Disposal. Accordingly, none of the Shareholders will be required to abstain from voting in respect of the Disposal.

On 13 April 2004, the Company announced that (1) Beijing Tianqiao Beida Jade Bird SciTech Company Limited entered into a conditional agreement to transfer its entire interest in the Company to Beijing Beida Jade Bird Limited; and (2) Dynamic Win Assets Limited entered into a conditional agreement to transfer 14,586,000 Promoter Shares to New View Venture Limited. Both agreements are conditional upon satisfaction of a number of conditions, including approval by Shareholders of the amendments to the Articles of Association of the Company to reflect changes in the shareholder and shareholdings. As the parties to the transfers are all promoters of the Company, and as the transfers are conditional upon satisfaction of certain conditions, such proposed transfers will not affect the confirmations or approvals given by such parties to the Disposal.

SPECIAL GENERAL MEETING

The notice convening the SGM as a procedural formality to approve, ratify and confirm the Disposal by way of ordinary resolution is set out on pages 19 to 20 in this circular. Shareholders holding approximately 52.5% of the issued share capital of the Company have already given their written approval of the Disposal.

– 6 –

LETTER FROM THE BOARD

A reply slip for the SGM to be held at Room 301, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing, the PRC on Friday, 4 June 2004 at 11:00 a.m. is enclosed. Whether or not you intend to attend the SGM, you are requested to complete and return the reply slip, for holders of H shares, to Unit 02, 7th Floor, Asia Pacific Centre, 8 Wyndham Street, Central, Hong Kong, on or before 4:00 p.m. on Saturday, 15 May 2004 and for holder of Promoter Shares to the principal place of business of the Company in Beijing at 3rd Floor, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing 100871, PRC on or before 4:00 p.m. on Saturday, 15 May 2004.

A proxy form for use at the SGM to be held at Room 301, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing, the PRC on Friday, 4 June 2004 at 11:00 a.m. is also enclosed. Whether or not you intend to attend the SGM, you are requested to complete and return the proxy form, for holders of H Shares, to the Company’s H share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong, and for holder of Promoter Shares, to the Company’s principal place of business in Beijing at 3rd Floor, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing 100871, PRC not less than 24 hours before the time appointed for the holding of the SGM. Completion and return of the proxy form will not preclude you from attending and voting in person at the SGM or at any adjourned meeting should you so wish.

RECOMMENDATION

The Directors consider that the Disposal will allow the Company to realize part of its investment in SMIC at a profit and therefore is in the interest of the Company. Accordingly, the Directors recommended the Shareholders to vote in favour of the resolution.

ADDITIONAL INFORMATION

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

Yours faithfully, By Order of the Board Xu Zhen Dong Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. STATEMENT OF INDEBTEDNESS

At the close of business on 29 February 2004, being the latest practicable date for ascertaining information regarding this indebtedness statement, the Group had total outstanding borrowings of approximately RMB396.3 million which solely consist of short-term bank loans.

At the close of business on 29 February 2004, approximately RMB3.1 million of the bank loans mentioned above were secured by mortgages over some of the buildings, machinery and equipment of the Group with a net book value of approximately RMB1.1 million. The remaining bank loans mentioned above of approximately RMB393.2 million have also obtained a joint guarantee by Beijing Beida Jade Bird Limited which is a shareholder of the Company and Peking University Resource Group, a subsidiary of Peking University which is the ultimate controlling shareholder of the Company.

Save as aforesaid or as otherwise mentioned in this circular and apart from intra-group liabilities, the Directors confirmed that no company in the Group had outstanding, at the close of business on 29 February 2004, any mortgages, charges, pledge, debentures, loan capital, bank loans and overdrafts, debt securities or other similar indebtedness, finance leases or hire purchase commitments, acceptance liabilities or acceptance credits, any guarantees or other material contingent liabilities.

Foreign currency amounts have, for the purpose of this indebtedness statement, been translated into RMB at the rates of exchange prevailing as at the close of business on 29 February 2004.

On 16 March 2004, the Company repaid approximately RMB83 million of the bank loans as set out in the bank loans of approximately RMB393.2 million mentioned above.

Save as aforesaid or as otherwise mentioned in this circular, the Directors confirmed that there has been no material change in the indebtedness and contingent liabilities of the Group since 29 February 2004.

2. WORKING CAPITAL

The Directors, including independent non-executive Directors, are of the opinion that, following completion of the Disposal, taking into account the financial resources available to the Group, including internally generated funds and the present available banking facilities, and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements.

3. RULES 17.15 TO 17.21 OF THE GEM LISTING RULES

The Directors have confirmed that, as at the Latest Practicable Date, the Group was not aware of any circumstances that would give rise to a disclosure requirement under Rules 17.15 to 17.21 of the GEM Listing Rules.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. MATERIAL CHANGE

Save as and except for the gain as a result of the Disposal, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2003, being the date to which the latest published audited financial statements of the Company were made up.

5. ADJUSTED NET TANGIBLE ASSETS (FOR REFERENCE AND ILLUSTRATION PURPOSES ONLY)

Based on the audited net tangible assets of the Group as at 31 December 2003, after the Disposal, the net tangible assets of the Group will be increased by approximately RMB288 million from approximately RMB532 million to RMB820 million.

6. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Overview

The Group is principally engaged in the research, development, production, marketing and sales of embedded systems, including network security products, wireless fire alarm systems, application specific integrated circuits, global positioning system applications, smart card application systems, remote automatic meter-reading systems and related products. The Group is also engaged in the sales of computer products and the provision of total solution services through application of its existing embedded system products.

Financial year ended 31 December 2003

Turnover

The audited consolidated turnover of the Group for the year ended 31 December 2003 amounted to RMB199,740,000 (2002 – RMB250,463,000).

The decrease in turnover and the unfavorable operating results was primarily due to a substantial reduction in total solution services projects as affected by the outbreak of the atypical pneumonia in the first half of the year. The higher margin total solution services business experienced a decrease of RMB42.4 million to RMB14.4 million from RMB56.8 million in last year. The decrease in revenue of total solution services was partly offset by increase in revenue from the development and sales of embedded systems and related products of RMB29.5 million to RMB114.9 million. For the year ended 31 December 2003, the turnover from the sales of embedded system products and related products, sales of computer products and total solution services were approximately 57%, 35% and 8% respectively as compared to the more evenly distributed sales mix of 34%, 43% and 23% respectively in the same period last year.

– 9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Operating Profit

The operating profit of the Group for the year ended 31 December 2003 amounted to RMB16,312,000 (2002 – RMB63,568,000).

The operating result of the Group was affected by the decrease in the revenue of total solution services which carried a higher margin. In addition, sales of embedded systems as well as sales of computer products also recorded decrease in gross profit margin. The decrease in gross profit was partly offset by savings in employee costs and other operating expenses resulting in a decrease of 74% in operating profit as compared to last year.

Finance Cost

In January 2003, the Company had replaced a short-term bank loan of RMB360 million drawn down in year 2001 with a foreign currency short term bank loan of US$47.5 million (approximately RMB393 million) with a lower interest rate to finance the investment in SMIC. Therefore, the interest expense recorded a decrease of RMB11.8 million or 49% as compared to last year.

Profit Attributable to Shareholders

The profit attributable to shareholders and earning per share of the Group for the year ended 31 December 2003 were RMB7,136,000 (2002 – RMB42,646,000) and RMB0.7 cents (2002 – 4.4 cents) respectively.

Liquidity and Financial Resources

The Group has financed its operation mainly by equity, funds generated from operating activities and short term bank loans.

As at 31 December 2003, the Group had cash on hand of RMB278 million and short term bank loans totalling RMB396 million. Included in the short term bank loans, an amount of US$47.5 million (approximately RMB393 million) was the short term bank loan for financing the investment in SMIC. The Group’s short term bank loan of RMB3,060,000 was secured by the Group’s fixed assets with a net book value of RMB1,097,000. The aforesaid US$ short term bank loan was guaranteed by a shareholder of the Company and a subsidiary of Peking University.

On 20 June 2003, the Company entered into a placing agreement with a placing agent for the placing, on a best effort basis, of an aggregate of up to 140,000,000 new H Shares at a price of HK$0.6 per H share (“the Placing”). On 4 July 2003, the Company completed the Placing and obtained the approval from GEM Listing Committee for the listing of and permission to deal in the 140,000,000 new H Shares. The proceeds from the Placing were credited to the books of the Company in July 2003.

– 10 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Future prospects

In recent years, network security has been more and more important to government departments and large business enterprises in China. The Group has been selected by certain government departments and major Chinese business enterprises, such as Beijing Municipal Government and China Petroleum, as one of the few on-list suppliers for provision of network security products. The Directors estimate that the results from network security products in year 2004 would be very promising.

In the coming year, the Group proposes to research on and develop first-rate firewall of higher bandwidth, zero packet loss and advanced technology (including the mixed mode firewall with expanded and developed firewall functions, and the improvement of VLAN and VPN), as well as the development of multiple interfaces for external net, virtual private network and email filter.

Wuhan Beida Jade Bird Netsoft Company Limited (“Jade Bird Netsoft ”), a subsidiary of the Company, plans to perfect the enterprise version of the network management software, conduct technology development for SNMP Agent API and SNMP Proxy Agent API, the No.2 and No.3 products of the series of Simple Network Management Protocol development platform (SNMP API), so as to complete the production of telecommunications version of the network management software. It plans to research on and develop VPN management software products. In the future, Jade Bird Netsoft will continue its sales activities nationwide, enhance its marketing activities, build up the awareness of its brands and enlarge its market share with a view to replacing imported goods gradually and accomplishing penetration of the telecommunications version of the network management software into the telecommunications market.

The fire prevention product department of the Group will jointly with a German company research on and develop JBF-11S/CD6 the ancillary micron control unit. Further, the Group will also implement the following new projects: the project of Air Force Blue Sky Community for Sichuan Smart Electric Co. Ltd., and the project of General Time International Apartment in Beijing for Hua Xia Fire Services (Group) Company Limited.

– 11 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief:

• (a) the information contained in this circular is accurate and complete in all material respects and not misleading;

• (b) there are no other matters the omission of which would make any statement in this circular misleading; and

• (c) 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.

2. DISCLOSURE OF INTERESTS

• (a) Interests and short positions of the Directors, chief executive and supervisors of the Company in the total issued Promoter Shares of the Company and its associated corporations

As at the Latest Practicable Date, the interests (including interests in shares and short positions) of the Directors, chief executive or supervisors of the Company in the Promoter Shares of the issued share capital of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) which will be required to be notified to the Company and the Stock Exchange pursuant to: (a) Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which each of them is taken or deemed to have taken under such provisions of the SFO); or (b) which will be required pursuant to section 352 of the SFO to be entered in the register referred to in that section; or (c) will be required, pursuant to Rules 5.40 to 5.58 of the GEM Listing Rules relating to securities transactions by Directors, to be notified to the Company and the Stock Exchange, will be as follows:

			Percentage
		Number of	shareholding
Director/		Promoter Shares	in the
Supervisor	Capacity	held by Heng Huat	Promoter Shares
		(Note)
Xu Zhen Dong	Beneficiary	220,000,000	31.43%
	of a trust
Xu Zhi Xiang	Beneficiary	220,000,000	31.43%
	of a trust

– 12 –

GENERAL INFORMATION

APPENDIX II

			Percentage
		Number of	shareholding
Director/		Promoter Shares	in the
Supervisor	Capacity	held by Heng Huat	Promoter Shares
		(Note)
Zhang Wan Zhong	Beneficiary	220,000,000	31.43%
	of a trust
Liu Yong Jin	Beneficiary	220,000,000	31.43%
	of a trust
Wu Min Sheng	Beneficiary	220,000,000	31.43%
	of a trust
Zhang Yong Li	Beneficiary	220,000,000	31.43%
	of a trust
Dong Xiao Qing	Beneficiary	220,000,000	31.43%
	of a trust

Note:

The above Directors and supervisors of the Company are taken to be interested in the issued share capital of the Company through their respective interests as beneficiaries, among other beneficiaries, of Heng Huat Trust. By a declaration of trust (“Heng Huat Trust”) made as a deed on 19 July 2000, Mr. Xu Zhen Dong, Mr. Zhang Wan Zhong and Ms. Liu Yue (who has been replaced by Mr. Xu Zhi Xiang since 9 May 2003 as a trustee) declared that they held the shares of Heng Huat Investments Limited (“Heng Huat”) as trustees for the benefits of 477 employees of Beijing Beida Jade Bird Software System Company, Beijing Beida Jade Bird Limited, Beijing Beida Yu Huan Microelectronics System Engineering Company and Beijing Tianqiao Beida Jade Bird Sci-Tech Company Limited and their respective subsidiaries and associated companies and the Company. Heng Huat is beneficially interested in approximately 93.37% in the issued share capital of Dynamic Win Assets Limited (“Dynamic Win”), and is taken to be interested in 220,000,000 Promoter Shares which Dynamic Win Assets Limited is interested. Mr. Xu Zhen Dong, Mr. Zhang Wan Zhong and Mr. Xu Zhi Xiang (who replaced Ms. Liu Yue as a trustee on 9 May 2003 upon Ms. Liu’s resignation as a trustee on the same date) are trustees holding 60, 20 and 20 shares out of 100 shares in the issued share capital of Heng Huat.

(b) Interests in share options

As at the Latest Practicable Date, no options have been granted by the Group pursuant to the share option scheme adopted by the Company on 5 July 2000.

3. DIRECTORS’ SERVICE CONTRACTS

Each of the Directors has entered into a service contract with the Company for a term of three years commencing from 25 June 2003.

– 13 –

GENERAL INFORMATION

APPENDIX II

4. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, the persons other than a Director or chief executive or supervisor of the Company who have interests or short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO are as follows:

Shareholder
(Holders of		No. of	% in total
Promotor Shares)	Capacity	Promoter Shares	Promoter Shares
Peking University	Interest of controlled	310,000,000(L)	44.28%
(Note 1)	corporation
Heng Huat Investments	Interest of controlled	220,000,000(L)	31.43%
Limited_(Note 2)_	corporation
Dynamic Win Assets	Beneficial owner	220,000,000(L)	31.43%
Limited_(Notes 2 & 3)_
New World Cyberbase	Interest of controlled	70,000,000(L)	10.00%
Limited	Corporation
New View Venture	Beneficial Owner	84,586,000(L)	12.08%
Limited_(Note 3)_
Asian Technology	Beneficial Owner	50,000,000(L)	7.14%
Investment Company
Limited

– 14 –

GENERAL INFORMATION

APPENDIX II

Notes:

• (1) Peking University is taken to be interested in 44.28% of the total Promoter Shares through the following companies:

• (a) 85,000,000 Promoter Shares (representing approximately 12.14% of the Company’s total Promoter Shares) held by Beijing Beida Yu Huan Microelectronics System Engineering Company (北京北 大宇環微電子系統工程公司 ), which is beneficially wholly-owned by Peking University;

• (b) 110,000,000 Promoter Shares (representing approximately 15.71% of the Company’s total Promoter Shares) held by Beijing Beida Jade Bird Software System Co. (北京市北大青鳥軟件系統公 司 ), which is beneficially wholly-owned by Peking University;

• (c) 40,000,000 Promoter Shares (representing approximately 5.71% of the Company’s total Promoter Shares) held by Beijing Beida Jade Bird Limited (北京北大青鳥有限責任公司 ), which is approximately 46% owned by Peking University. Pursuant to a conditional transfer agreement dated 15 March 2004 and commencing from 15 March 2004, Beijing Beida Jade Bird Limited is taken to be interested in the 75,000,000 Promoter Shares that Beijing Tianqiao Beida Jade Bird Sci-Tech Company Limited is interested. Completion of the transfer agreement is pending fulfillment of the conditions specified therein; and

• (d) 75,000,000 Promoter Shares (representing approximately 10.71% of the Company’s total Promoter Shares) held by Beijing Tianqiao Beida Jade Bird Sci-Tech Company Limited (北京天橋北大青 鳥科技股份有限公司 ), the board of which is controlled by Beijing Beida Jade Bird Limited.

• (2) Heng Huat Investments Limited is beneficially interested in 93.37% of the issued share capital of Dynamic Win Assets Limited and is taken to be interested in 220,000,000 Promoter Shares held by Dynamic Win Assets Limited in the issued capital of the Company.

• (3) Pursuant to a conditional transfer agreement dated 11 March 2004 and commencing from 11 March 2004, New View Venture Limited is taken to be interested in 14,586,000 Promoter Shares that Dynamic Win Assets Limited is interested. Completion of the transfer agreement is pending fulfillment of the conditions specified therein.

• (4) The letter “L” denotes a long position in shares.

Save as disclosed above, so far as is known to the Directors there are no persons, other than the Company, who are interested in 5% 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.

5. SHARE CAPITAL

As at the Latest Practicable Date, the authorized share capital of the Company was as follows:

Number of issued shares ’000 Existing Issued Shares: Promoter shares 700,000 H shares 404,000 1,104,000	Nominal value RMB’000 70,000 40,400 110,400	Paid up capital RMB’000 70,000 40,400
		110,400

Note: Promoter Shares and H Shares are both ordinary shares in the share capital of the Company with nominal value of RMB0.10 each.

– 15 –

GENERAL INFORMATION

APPENDIX II

6. MANAGEMENT CONTRACTS

No contract concerning the management and administration of the whole or any substantial part of the business of the Company was entered into or existed during the year.

7. COMPETING INTERESTS

None of the Directors, the management shareholders of the Company or any of their respective associate (as defined in the GEM Listing Rules) had an interest in a business which competes or may compete with the businesses of the Company.

8. LITIGATION

No member of the Group is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

9. GENERAL

• (a) In the event of any inconsistency, the English language text of this circular shall prevail over the Chinese language text.

• (b) The principal place of business of the Company in the PRC is at 3rd Floor, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing 100871, the PRC.

• (c) The place of business of the Company in Hong Kong is at Unit 02, 7th Floor, Asia Pacific Centre, 8 Wyndham Street, Central, Hong Kong.

• (d) The share register and transfer office of the Company is Hong Kong Registrars Limited at Rooms 1901-5, 19th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (e) The appointed auditors of the Company is Messrs. Ernst & Young, Certified Public Accountants at 15th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong.

• (f) The compliance officer of the Company is Mr. Zhang Wan Zhong (“Mr. Zhang”). Mr. Zhang graduated from Peking University with a master degree in science. Mr. Zhang held various positions in the administrative arm of Peking University and was the authorised representative and general manager of Peking University Science Information Technology Company.

• (g) The qualified accountant and company secretary of the Company is Mr. Chan Him, Alfred (“Mr. Chan”). Mr. Chan is a fellow member of both the Hong Kong Society of Accountants and the Association of Chartered Certified Accountants.

– 16 –

GENERAL INFORMATION

APPENDIX II

• (h) The Company has established an audit committee on 5 July 2000 with terms of reference in compliance with Rules 5.23, 5.24 and 5.25 of the GEM Listing Rules. The primary duties of the audit committee are to review the financial reporting process and internal control system of the Company. The audit committee has two members, namely the two independent non-executive Directors, Mr. Chin Man Chung, Ambrose (“Mr. Chin”) and Prof. Nan Xiang Hao (“Prof. Nan”). Mr. Chin, holds a master degree in literature from the Peking University and is currently a professor of the Faculty of History of the Fudan University. Prof. Nan is currently a part-time professor in the graduate school of University of Science & Technology of China. Prof. Nan was awarded various science award such as 國家科技進步二等獎 (the Second Prize of State Technological Achievement).

• (i) As at the Latest Practicable Date, the authorised share capital of the Company was RMB110.4 million divided into 700 million Promoter Shares and 404 million H Shares of RMB0.10 each.

• (j) The Company did not have any outstanding convertible debt securities as at the Latest Practicable Date.

• (k) Save as disclosed in this circular, none of the Directors is, directly or indirectly, interested in any assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2003, the date to which the latest published audited accounts of the Company were made up.

• (l) Save as disclosed in this circular, there is no other contract or arrangement subsisting at the date of this circular in which a Director is materially interested and which is significant in relation to the business of the Group.

• (m) Dealings in the H Shares may be settled through the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited, and investors should seek the advice of their stockbroker or other professional adviser for details of those settlement arrangement and how such arrangements will affect their rights and interest.

10. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business of the Company) have been entered into by members of the Group within two years immediately the date of this circular which are or may be material:

1. Share Transfer Agreement dated 5 February 2002 between the Company and Beijing Beida Jade Bird Limited for the acquisition of 51% equity interest of Beijing Jade Bird Haodi Electric System Company Limited for RMB10,000,000;

2. Assets Transfer Agreement dated 1 April 2002 between the Company and Chengdu Jian Bang Technology Company Limited for the transfer of digital video recording system assets for RMB3,000,000.

– 17 –

GENERAL INFORMATION

APPENDIX II

1. Capital Increase Agreement dated 2 August 2002 of Wuhan Tianxun Technology Company Limited entered into by the Company with Central China Normal University Technology Development Company, Zhuhai Zhongjun Development Company Limited and Gluonsoft Corporation to increase the capital of Wuhan Tianxun Technology Company Limtied to RMB7,100,000.

2. Placing Agreement date 20 June 2003 between the Company and Tai Fook Securities Company Limited in relation to the underwriting of the placing of H shares.

3. Digital Video Recording System Assets Transfer Agreement dated 3 November 2003 between the Company and Shenzhen Beida Jade Bird Technology Limited for the transfer of the digital video recording system assets for RMB3,000,000.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents (and English translations thereof, if appropriate) will be available for inspection at Unit 02, 7th Floor, Asia Pacific Centre, 8 Wyndham Street, Central, Hong Kong during normal business hours up to and including 3 May 2004:

• (a) the Memorandum and Articles of Association of the Company;

• (b) the annual report of the Company for the year ended 31 December 2003; and

• (c) the material contracts referred to in paragraph 10 of this Appendix.

– 18 –

NOTICE OF SPECIAL GENERAL MEETING

==> picture [64 x 37] intentionally omitted <==

北京北大青鳥環宇科技股份有限公司 BEIJING BEIDA JADE BIRD UNIVERSAL SCI-TECH COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “Special General Meeting”) of the holders of Promoter Shares and H Shares of Beijing Beida Jade Bird Universal Sci-Tech Company Limited (the “Company”) will be held at Room 301, Beida Jade Bird Building, No. 207 Chengfu Road, Haidian District, Beijing, the PRC on Friday, 4 June 2004 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following as an ordinary resolution:

ORDINARY RESOLUTION

THAT:

• (a) the disposal of 156,842,000 ordinary shares (the “Disposal”) of Semiconductor Manufacturing International Corporation (“SMIC”) by Jade Bird Universal (Cayman) Development Company Limited, a wholly-owned subsidiary of the Company, in the initial public offering of SMIC at the offer price of HK$2.69 per ordinary share (details of the Disposal have been set out in an announcement of the Company dated 9 March 2004 and in a circular to the shareholders of the Company dated 19 April 2004) be and is hereby approved, ratified and confirmed; and

• (b) the acts of the board of directors of the Company on behalf of the Company for the purpose of or in connection with the implementation and completion of the Disposal be and are hereby approved, ratified and confirmed.

By order of the board of directors Xu Zhen Dong

Chairman

Hong Kong, 19 April 2004

Place of Business in Hong Kong

Unit 02, 7th Floor, Asia Pacific Centre 8 Wyndham Street

Central, Hong Kong

– 19 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

(A) The H Share register of the Company will be closed from 4 May 2004 (Tuesday) to 3 June 2004 (Thursday) (both days inclusive), during which no transfer of H Shares will be effected. Any holders of H Shares of the Company, whose name appear on the Company’s H Share Register of Members at the close of business on 4 May 2004 (Tuesday) 2004, are entitled to attend and vote at the Special General Meeting after completing the registration procedures for attending the meeting.

The address of the Company’s H Shares registrar, Hong Kong Registrars Limited, is as follows:

Rooms 1901-5 19th Floor, Hopewell Centre 183 Queen’s Road East Hong Kong

(Fax no.: 2865-0990)

(B) Holders of Promoter Shares or H Shares, who intend to attend the Special General Meeting, must complete the reply slips for attending the Special General Meeting and return them to Unit 02, 7th Floor, Asia Pacific Centre, 8 Wyndham Street, Central, Hong Kong (Fax No.(852) 2521-1669) (for holders of H Shares) or to the place of business of the Company in Beijing (for Promoter Shares) not later than 20 days before the date of the Special General Meeting, i.e. no later than 4:00 p.m. on Saturday, 15 May 2004.

The place of business of the Company in Beijing:

3rd Floor, Beida Jade Bird Building

No.207 Chengfu Road Haidian District Beijing 100871 PRC Fax no: 86-10-62758434

(C) Each holder of H Shares who has the right to attend and vote at the Special General Meeting is entitled to appoint in writing one or more proxies, whether a shareholder or not, to attend and vote on his behalf at the Special General Meeting. A proxy of a shareholder who has appointed more than one proxy may only vote on a poll.

(D) The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorized in writing. If that instrument is signed by an attorney of the appointor, the power of attorney authorizing that attorney to sign, or other documents of authorization, must be notarially certified.

(E) To be valid, the form of proxy, and if the form of proxy is signed by a person under a power of attorney or other authority on behalf of the appointor, a notarially certified copy of that power of attorney or other authority, must be delivered to the Company’s H Share Registrar, Hong Kong Registrars Limited, the address of which is set out in Note (A) above, not less than 24 hours before the time for holding the Special General Meeting or any adjournment thereof in order for such documents to be valid.

(F) Each holder of Promoter Shares is entitled to appoint in writing one or more proxies, whether a shareholder or not, to attend and vote on its behalf at the Special General Meeting. Notes (C) to (D) also apply to holders of Promoter Shares, except that the proxy form or other documents of authority must be delivered to the place of business of the Company in Beijing, the address of which is set out in Note (B) above, not less than 24 hours before the time for holding the Special General Meeting or any adjournment, thereof in order for such documents to be valid.

(G) If a proxy attends the Special General Meeting on behalf of a shareholder, he should produce his identity card and the instrument signed by the proxy or his legal representative, and specifying the date of its issuance. If a legal person shareholder appoints its corporate representative to attend the Special General Meeting, such representative should produce his/her identity card and the notarised copy of the resolution passed by the Board of Directors or other authorities or other notarised copy of the licence issued by such legal person shareholder.

(H) The Special General Meeting is expected to last for half a day. Shareholders attending the Special General Meeting are responsible for their own transportation and accommodation expenses.

– 20 –