Beijing Urban Construction Design & Development Group Co., Limited — Proxy Solicitation & Information Statement 2004

Aug 23, 2004

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Overseas Land & Investment Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale or transfer 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, 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.

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(Stock Code: 688)

(incorporated in Hong Kong with limited liability)

CONSTRUCTION CONTRACT FOR YEUNG UK ROAD PROJECT AWARDED BY SINO LAND CONNECTED TRANSACTION

Independent Financial Adviser to the Independent Board Committee

A C C E S S C A P I T A L

A letter from the Independent Board Committee is set out on pages 8 to 9 of this circular. A letter from Access Capital Limited to the Independent Board Committee is set out on pages 10 to 14 of this circular.

23 August 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

– i –

DEFINITIONS

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

“Board” the board of directors of the Company “COBC” China Overseas Building Construction Limited, the main contractor of Yeung Uk Road Project and a wholly-owned subsidiary of the Company “Company” China Overseas Land & Investment Limited (中國海外發展有限公司 ), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the main board of the Stock Exchange “connected person” or the term “connected person” and “associate” shall have the meanings as “associate” defined in the Listing Rules “Construction Contract” the main contract awarded to COBC pursuant to a letter of intent issued by Prime Harvest of 30 July 2004, for the construction of Yeung Uk Road Project, details of which are set out below “Director(s)” the directors of the Company “Group” the Company and its subsidiaries (as defined under the Listing Rules) “HK$” Hong Kong dollars, the lawful currency of Hong Kong Special Administrative Region of the PRC “IFA” Access Capital Limited, the independent financial adviser to the Independent Board Committee, being a deemed licensed corporation to carry out Types 1, 4, 6 and 9 regulated activities under the SFO “Independent Board an independent committee of the Board comprising Dr. Li Kwok Po, Committee” David, Lam Kwong Siu and Wong Ying Ho, Kennedy, all of whom are independent non-executive directors of the Company “Latest Practicable Date” 16 August 2004, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange “PRC” the People’s Republic of China “Prime Harvest” Prime Harvest Development Limited, the employer of Yeung Uk Road Project and a wholly-owned subsidiary of Sino Land

– 1 –

DEFINITIONS

“SFO”

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Shareholders”

the shareholders of the Company from time to time

“Sino Land”

Sino Land Company Limited, a company (stock code: 83) the shares of which are listed on the Stock Exchange and a connected person of the Company, which connection with the Company is set out below

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Yeung Uk Road Project” the construction works for the proposed commercial and residential development at T.W.T.L 398, Tai Ho Road/Yeung Uk Road, Tsuen Wan, New Territories, details of which are set out in the paragraph headed “The Construction Contract” in the section headed “Letter from the Board”

– 2 –

LETTER FROM THE BOARD

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(Stock Code: 688)

(incorporated in Hong Kong with limited liability)

Directors: Sun Wen Jie (Chairman) Kong Qingping (Vice Chairman and Chief Executive) Yao Peifu (Vice Chairman) Cui Duosheng Cheung Shiu Kit Wu Jianbin Yip Chung Nam Nip Yun Wing

Registered Office: 29th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong.

Independent Non-Executive Directors:

Dr. Li Kwok Po, David O.B.E., J.P. Mr. Lam Kwong Siu Mr. Wong Ying Ho, Kennedy, J.P.

23 August 2004

To the Shareholders

Dear Sir or Madam,

CONSTRUCTION CONTRACT FOR YEUNG UK ROAD PROJECT AWARDED BY SINO LAND CONNECTED TRANSACTION

INTRODUCTION

The Board announced on 30 July 2004 that Prime Harvest, a wholly-owned subsidiary of Sino Land, issued a letter of intent awarding (subject to the issuance of a formal letter of award) the Construction Contract for Yeung Uk Road Project to COBC, a wholly-owned subsidiary of the Company. The maximum contract value to be awarded is HK$1,118 million.

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LETTER FROM THE BOARD

Sino Land and the Company, through their respective subsidiaries, are interested in 20% and 80% respectively of a joint venture company established in the PRC. As such, Sino Land is a substantial shareholder of a subsidiary of the Company and Prime Harvest, being an associate of Sino Land, is deemed a connected person of the Company under the Listing Rules.

The purpose of this circular is to provide you with the particulars of the Construction Contract as a connected transaction, the letter from the Independent Board Committee, the letter from the IFA to the Independent Board Committee and the Shareholders.

BACKGROUND

On 30 July 2004, Prime Harvest, a wholly-owned subsidiary of Sino Land, issued a letter of intent awarding (subject to the issuance of a formal letter of award) the Construction Contract for Yeung Uk Road Project to COBC, a wholly-owned subsidiary of the Company, after a competitive tender process.

Sino Land and the Company, through their respective subsidiaries, are interested in 20% and 80% respectively of a joint venture company established in the PRC. As such, Sino Land is a substantial shareholder of a subsidiary of the Company and Prime Harvest, being an associate of Sino Land, is deemed a connected person of the Company under the Listing Rules.

The principal businesses of the Group are property development, building and civil construction, foundation engineering and project management, property letting, real estate agency and management, infrastructure project investments. COBC is a wholly-owned subsidiary of the Company engaging in building construction as main contractor.

Sino Land is an investment holding company and its principal businesses include property development and investment. Prime Harvest is a wholly-owned subsidiary of Sino Land engaging in property development.

The contract value exceeds 2.5% of each of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules. As such, the Construction Contract constitutes a connected transaction of the Company under Rule 14A.16(5) of the Listing Rules and is subject to the reporting, announcement and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.

THE CONSTRUCTION CONTRACT

Date of letter of intent awarding the Construction Contract

30 July 2004

– 4 –

LETTER FROM THE BOARD

Parties

• (1) COBC, a wholly-owned subsidiary of the Company, as the main contractor for the construction of Yeung Uk Road Project

• (2) Prime Harvest, a wholly-owned subsidiary of Sino Land, as the employer for the construction of Yeung Uk Road Project

Nature of the Construction Contract

COBC will act as the main contractor and undertake the construction of the Yeung Uk Road Project.

Yeung Uk Road Project involves the construction of 5 residential towers and a podium comprising shopping arcade, carpark, public light bus terminus and clubhouse with a total gross floor area of approximately 130,000 square metre. The project was expected to complete in two phases. The first phase was expected to complete before or around the first half of 2006 and the second before or around the second half of 2006. This completion schedule may change subject to actual implementation of the project.

The letter of intent was issued subject to the issuance of a formal letter of award of the Construction Contract.

Consideration

The maximum contract value to be awarded is HK$1,118 million (of which approximately HK$11 million is optional fee depending on actual construction requirement), subject to such payment term, provisions relating to liquidated damages, retention money and performance guarantee as customary in the trade and as set out in the tender document. The contract sum will be payable to the main contractor in progress payments, with reference to the value of works done.

The said contract value was the bid price submitted by COBC in the competitive tender process and was determined based on various factors concerning the project including COBC’s estimation of construction costs and the expected completion schedule.

The Board consider that the said award of the Construction Contract to COBC was made: (1) in the ordinary and usual course of business of the Group; (ii) on an arm’s length basis; (iii) on normal commercial terms; and (iv) on terms no less favourable to the Group than those granted from independent third parties. In particular, the Construction Contract was so awarded to the Group only after a competitive tender process. The Board believe that the terms of the Construction Contract are fair and reasonable and are in the interest of the Shareholders.

– 5 –

LETTER FROM THE BOARD

The opinion of the independent non-executive Directors are set out in the section headed “Letter from the Independent Board Committee” below.

BENEFITS OF THE CONSTRUCTION CONTRACT

As the Group is engaged in the construction business, the Construction Contract was awarded as aforesaid to COBC in its ordinary and usual course of business through a competitive tender process.

The Board believes that it is beneficial for the Group to have secured substantial construction business like the Yeung Uk Road Project and to have maintained good working relationship with reputable property developers in Hong Kong other than the Group itself.

OTHER INFORMATION FOR THE SHAREHOLDERS

The contract value exceeds 2.5% of each of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules. As such, the Construction Contract constitutes connected transaction of the Company under Rule 14A.16(5) of the Listing Rules and is subject to the reporting, announcement and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules. Sino Land has confirmed to the Company that neither it nor its associates have any interest in any shares of the Company giving the right to attend and vote at general meetings of the Company. As such, none of the Shareholders is required to abstain from voting on the Construction Contract. The following persons are together beneficially interested in 3,248,050,800 shares representing approximately 51.02% of the issued share capital of the Company:

		Percentage of total
	No. of ordinary	issued share capital
Name of beneficial	shares beneficially	of the Company
shareholder	interested	as of the date hereof	Relationship
China Overseas Holdings	2,990,858,800	46.98%	COHL is a substantial
Limited (“COHL”)			shareholder of the
			Company
Silver Lot Development	211,192,000	3.32%	a wholly-owned
Limited			subsidiary of COHL
China Overseas Insurance	46,000,000	0.72%	a wholly-owned
Limited			subsidiary of COHL
TOTAL	3,248,050,800	51.02%

– 6 –

LETTER FROM THE BOARD

POLL PROCEDURE AND SHAREHOLDERS’ MEETING

Under the Company’s Articles of Association, a poll can be demanded by:-

• (a) the Chairman;

• (b) at least three members present in person or by proxy;

• (c) any member or members present in person or by proxy and representing not less than one tenth of the total voting rights of all members having the right to vote at the meeting; or

• (d) any member or members present in person or by proxy and holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

The Company has applied to the Stock Exchange for a waiver from strict compliance with the requirement to hold a shareholders’ meeting to approve the Construction Contract, on the basis of a written independent shareholders’ approval given in accordance with Rule 14A.43 of the Listing Rules. As mentioned in the paragraph headed “Other Information for the Shareholders” above, no Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Construction Contract.

ADDITIONAL INFORMATION

Your attention is also drawn to the general information set out in the Appendices to this circular.

Yours faithfully,

By order of the Board

China Overseas Land & Investment Limited

Kong Qingping

Vice Chairman & Chief Executive

– 7 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Stock Code: 688)

(incorporated in Hong Kong with limited liability)

Registered Office: 29th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong.

23 August 2004

To the Shareholders

Dear Sir or Madam,

CONSTRUCTION CONTRACT FOR YEUNG UK ROAD PROJECT AWARDED BY SINO LAND CONNECTED TRANSACTION

We have been appointed as the Independent Board Committee to advise you in connection with the Construction Contract and the transactions contemplated thereunder, details of which are set out in the letter from the Board contained in the circular to the shareholders of the Company dated 23 August 2004 (the “Circular” ), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

Access Capital Limited has been appointed as the independent financial adviser to consider and advise the Independent Board Committee and the Shareholders on the Construction Contract and the transactions contemplated thereunder.

– 8 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the terms of the Construction Contract and the transactions contemplated thereunder and the principal factors, reasons and opinion of the IFA in relation thereto as set out on pages 10 to 14 of the Circular, we are of the opinion that the Construction Contract was awarded on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and in the interests of the Company and its Shareholders as a whole. We therefore recommend the Shareholders to support the Construction Contract and the transactions contemplated thereunder. Your attention is drawn to the letter from the Board and the letter from the IFA set out in the Circular.

Yours faithfully, For and on behalf of the Independent Board Committee

Dr. Li Kwok Po, David O.B.E., J.P. Independent Non-Executive Director

Mr. Lam Kwong Siu Independent Non-Executive Director

Mr. Wong Ying Ho, Kennedy, J.P. Independent Non-Executive Director

– 9 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice to the Independent Board Committee and the Shareholders from the IFA prepared for incorporation in this circular.

A C C E S S C A P I T A L

Suite 606 6th Floor Bank of America Tower 12 Harcourt Road Central Hong Kong

23 August 2004

To: The Independent Board Committee and the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION CONSTRUCTION CONTRACT FOR YEUNG UK ROAD PROJECT AWARDED BY SINO LAND

1. INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Shareholders with regard to the transactions contemplated under the Construction Contract that was awarded to COBC, a wholly-owned subsidiary of the Company by Prime Harvest, in turn a wholly-owned subsidiary of Sino Land, on 30 July 2004. The maximum contract value to be awarded is HK$1,118 million. Pursuant to the Construction Contract, COBC will act as the main contractor and undertake the construction of the Yeung Uk Road Project. The Yeung Uk Road Project involves the construction of 5 residential towers and a podium comprising shopping arcade, car park, public light bus terminus and clubhouse with a total gross floor area of approximately 130,000 square metres. The project is expected to complete in two phases. The first phase is expected to complete before or around the first half of 2006 and the second before or around the second half of 2006. This completion schedule may change subject to actual implementation of the project. Details of the Construction Contract are contained in the “Letter from the Board” of the circular to the Shareholders dated 23 August 2004 (the “Circular” ), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular, unless the context otherwise specifies.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Sino Land and the Company, through their respective subsidiaries, are interested in 20% and 80% respectively of a joint venture company established in the PRC. As such, Sino Land is a substantial shareholder of a subsidiary of the Company and Prime Harvest, being an associate of Sino Land, is deemed a connected person of the Company under the Listing Rules. The contract value exceeds 2.5% of each of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules. As such, the Construction Contract constitutes a connected transaction of the Company under Rule 14A.16(5) of the Listing Rules and is subject to the reporting, announcement and independent shareholders’ approval requirements of Chapter 14A of the Listing Rules.

Sino Land has confirmed to the Company that neither it nor its associates have any interest in any shares of the Company giving the right to attend and vote at general meetings of the Company. As such, none of the Shareholders is required to abstain from voting on the Construction Contract. Hence, the Company has made an application to the Stock Exchange for a waiver from strict compliance with the requirement to hold a shareholder’ meeting to approve the Construction Contract, in accordance with Rule 14A.43 of the Listing Rules and on the basis of a written approval given by independent shareholders beneficially interested in aggregate 3,248,050,800 Shares (representing approximately 51.02% of the existing issued share capital of the Company) in respect of the Construction Contract.

The Independent Board Committee, comprising Dr. Li Kwok Po, David, Mr. Lam Kwong Siu and Mr. Wong Ying Ho, Kennedy (all of whom are independent non-executive Directors), has been established to consider the terms of the transactions contemplated under the Construction Contract and to advise the Shareholders. We have been appointed by the Independent Board Committee to advise it as to whether the terms and conditions of the Construction Contract are fair and reasonable so far as the Shareholders are concerned and in the interests of the Company and its Shareholders as a whole, and to give our opinion in relation to the Construction Contract for its consideration in issuing its opinion to the Shareholders.

2. BASIS OF THE OPINION

In formulating our advice, we have relied solely on the statements, information, opinions and representations contained in the Circular and the information and representations provided and/or made to us by the Company and the Directors. We have assumed that all such statements, information, opinions and representations contained or referred to in the Circular or otherwise provided or made or given by the Company and the Directors and for which it is/they are solely responsible were true, accurate and valid at the time they were made and given and continue to be true, accurate and valid as at the date of the Circular. We have assumed that all the statements, information, opinions and representations made or provided by the Company and/or the Directors contained in the Circular have been reasonably made after due and careful enquiry. We have also sought and obtained confirmation from the Company and the Directors that no material facts have been omitted from the information provided and referred to in the Circular.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We consider that we have reviewed all currently available information and documents to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. We have no reason to doubt the truth, accuracy and completeness of the statements, information, opinions and representations provided to us by the Company, the Directors and their respective advisers or to believe that material information has been withheld or omitted from the information provided to us or referred to in the aforesaid documents. We have not, however, carried out an independent verification of the information provided, nor have we conducted an independent investigation into the business and affairs of the Company or any of its subsidiaries.

3. PRINCIPAL FACTORS AND REASONS CONSIDERED

In forming our opinion, we have taken into consideration the following principal factors and reasons:

3.1 Background to and reasons for the transactions contemplated under the Construction Contract

The principal businesses of the Group are property development, building and civil construction, foundation engineering and project management, property letting, real estate agency and management, infrastructure project investments.

Sino Land is an investment holding company and its principal businesses include property development and investment.

On 30 July 2004, Prime Harvest, a wholly-owned subsidiary of Sino Land, issued a letter of intent awarding (subject to the issuance of a formal letter of award) the Construction Contract for Yeung Uk Road Project to COBC, after a competitive tender process. The letter of intent was issued subject to the issuance of a formal letter of award of the Construction Contract.

As the Group is engaged in the property construction business, it is a part of the ordinary and usual course of business of the Group to be invited to tender for construction contracts. In addition, the Board believes that it is in the interest of the Group and to seek to secure substantial construction projects such as the Yeung Uk Road Project.

Having considered the abovementioned reasons, we concur with the Board’s view that it is reasonable for the Group to enter into the Construction Contract under the current competitive business environment.

As stated in the “Letter from the Board”, the Construction Contract was awarded to COBC through a competitive tender process. We have discussed with the senior management of the Company (i) the process of preparing the tender invited by Prime Harvest and (ii) the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

subsequent discussions and negotiations between the parties involved following the tender being granted to COBC, we concur with the view of the Directors that the Construction Contract has been awarded through a competitive tender process.

3.2 Terms and conditions of the transactions contemplated under the Construction Contract

The maximum contract value to be awarded is HK$1,118 million (of which approximately HK$11 million is an optional fee depending on the actual construction requirement), subject to such payment term, provisions relating to liquidated damages, retention money and performance guarantee as customary in the trade and as set out in the tender document. The contract sum will be payable to the main contractor in progress payments, with reference to the value of works done.

The Directors confirm that the said contract value was the bid price submitted by COBC in the competitive tender process and was determined based on various factors concerning the project including COBC’s estimation of construction costs and the expected completion schedule.

As stated in the “Letter from the Board”, the Directors (excluding the independent nonexecutive Directors) confirmed that the tender prepared by COBC for the Construction Contract to COBC was made: (i) in the ordinary and usual course of business of the Group; (ii) on an arm’s length basis; (iii) on normal commercial terms; and (iv) on terms no less favorable to the Group than those granted from independent third parties. In particular, according to the Directors (excluding the independent non-executive Directors), the Construction Contract was so awarded to the Group only after a competitive tender process. The Directors (excluding the independent non-executive Directors), therefore, believe that the terms of the Construction Contract are fair and reasonable and are in the interests of the Shareholders and the Company as a whole.

We have discussed with the senior management of the Company about (i) the methodologies and (ii) the factors taken into consideration in the course of preparing (a) the tender invited by Prime Harvest and (b) those tenders invited by other independent property developers. Based on our discussion, we noted that the methodologies and the factors taken into consideration in the course of preparing tender invited by Prime Harvest and the other independent property developers are consistent and comparable in all material aspects.

We have also compared the terms of the tenders submitted by the Group for construction contracts (of similar nature in terms of size of the contract and/or the locality of the construction projects) of development projects undertaken either by Sino Land (when Sino Land was not a connected person of the Company under the Listing Rules) or other independent property developers within the past 30 months. We noted that the terms of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Construction Contract granted by Prime Harvest to the Group are arrived at after taking into account the normal commercial terms and relevant factors which the Group customarily applied in its preparation for tenders, and is not less favorable than terms granted by the other independent third parties to the Group.

4. OPINION

Having considered the abovementioned factors, being (i) the background to, and reasons for, the transactions contemplated under the Construction Contract; and (ii) the terms and conditions the Construction Contract, we are of the view that the terms and conditions of the Construction Contract are fair and reasonable so far as the Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend to the Shareholders to accept and approve the transactions contemplated under the Construction Contract.

Yours faithfully, For and on behalf of Access Capital Limited Jeanny Leung Managing Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular with regard to the Company and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts with regard to the Company, the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and chief executives

As at the Latest Practicable Date, the interests and short positions of the Directors and the Company’s chief executives in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), the Model Code for Securities Transactions by Directors of Listed Companies and which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

Personal Interests in the Shares

	Number of	Percentage of
Name of director	Shares held	issued share capital
Mr. Sun Wen Jie	3,800,000	0.06
Mr. Kong Qingping	2,460,000	0.04
Mr. Yao Peifu	2,300,000	0.04
Mr. Cui Duosheng	1,760,000	0.03
Mr. Wu Jianbin	1,040,000	0.02
Mr. Yip Chung Nam	2,200,000	0.03
Dr. Li Kwok Po, David	200,000	0.00

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GENERAL INFORMATION

APPENDIX

Underlying Shares

As at the Latest Practicable Date, the outstanding number of Shares issuable under the share options granted pursuant to the Share Option Scheme to the Directors and the Chief Executive of the Company was 100,830,000 Shares, representing approximately 1.58% of the issued capital of the Company.

							Approximate
							percentage
							of the issued
							share capital
							of the
							Company
							as at the
							Latest
Name of director		Number of	shares under options granted on				Practicable
	17 July 1997	14 Feb. 1998	30 Sep. 1998	4 Jan. 2000	18 June 2004	Total	Date
	(Note 1)	(Note 2)	(Note 3)	(Note 4)	(Note 5)
Mr. Sun Wen Jie	6,880,000	19,480,000	1,520,000	1,500,000	3,360,000	32,740,000	0.51
Mr. Kong Qingping	1,000,000	10,720,000	920,000	1,200,000	3,360,000	17,200,000	0.27
Mr. Yao Peifu	3,800,000	15,000,000	1,000,000	1,200,000	2,880,000	23,880,000	0.37
Mr. Cui Duosheng	1,000,000	9,000,000	720,000	1,020,000	2,880,000	14,620,000	0.23
Mr. Cheung Shiu Kit	1,000,000	—	—	—	2,880,000	3,880,000	0.06
Mr. Wu Jianbin	550,000	640,000	360,000	780,000	2,880,000	5,210,000	0.08
Mr. Yip Chung Nam	800,000	—	—	—	2,000,000	2,800,000	0.04
Mr. Nip Yun Wing	—	—	—	—	500,000	500,000	0.01

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the Company’s chief executives, had, under Divisions 7 and 8 of Part XV of the SFO, nor were they taken to or deemed to have under such provisions of the SFO, any interests or short positions in the shares, underlying shares or debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) or any interests which are required to be entered into the register kept by the Company pursuant to section 352 of the SFO or any interests which are required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies in the Listing Rules.

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GENERAL INFORMATION

APPENDIX

(b) Interests of shareholders discloseable pursuant to the SFO

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, had an interest 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:

			Approximate
			percentage of
			the outstanding
		Name of	share capital
Name of Shareholder	Nature	Shares held	of the Company
China Overseas Holdings Limited	Long Position	3,248,050,800	51.02%
CSCEC	Long Position	3,248,050,800	51.02%
J.P. Morgan Chase & Co.(Note 6)	Long Position	540,489,900	8.49%
J.P. Morgan Chase & Co.	Lending Pool	200,718,000	3.15%
HSBC Asset Management
(Hong Kong) Limited	Long Position	326,836,000	5.13%

CSCEC owns 100% of China Overseas Holdings Limited and is accordingly deemed by the SFO to be interested in 3,248,050,800 Shares directly owned by China Overseas Holdings Limited.

Notes:

• (1) The share options were granted at an exercise price of HK$4.06 per Share, exercisable for the period from 17 July 1998 to 16 July 2007 (both days inclusive).

• (2) The share options were granted at an exercise price of HK$1.08 per Share, exercisable for the period from 14 February 1999 to 13 February 2008 (both days inclusive).

• (3) The share options were granted at an exercise price of HK$0.52 per Share, exercisable for the period from 30 September 1999 to 29 September 2008 (both days inclusive).

• (4) The share options were granted at an exercise price of HK$0.58 per Share, exercisable for the period from 4 January 2001 to 3 January 2010 (both days inclusive).

• (5) The share options were granted at an exercise price of HK$1.13 per Share, exercisable for the period from 18 June 2005 to 17 June 2014 (both days inclusive).

• (6) The shares in which J.P. Morgan Chase & Co. were deemed to be interested, were held via, inter alia, J.P. Morgan Chase Bank, J.P. Morgan Securities Ltd., J.P. Morgan Whitefriars Inc., JF Asset Management Limited and JF Asset Management (Singapore) Limited.

For the latest disclosure of interests filings, they can be found at the “Disclosure of Interests” section at the Stock Exchange’s web-site at www.hkex.com.hk.

– 17 –

GENERAL INFORMATION

APPENDIX

(c) Substantial shareholding in other members of the Group

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, was directly or indirectly interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Macwan Finance Limited	Brilliant Fortune Properties Limited	20%
（名運財務有限公司）	（旭威置業有限公司）
	Golden Properties Finance Limited	10%
Maxjet Finance Limited	Goldmond Finance Company Limited	10%
（美逸財務有限公司）
Macwan Limited	Rich Tower Properties Limited	20%
（名運有限公司）	（鴻堅置業有限公司）
	Golden Queen International Limited	10%
Maxjet Company Limited	Goldmond Company Limited	10%
（美逸有限公司）
Macfull Finance Limited	Denmore Limited	20%
（名發財務有限公司）
	Smart Winner Development Limited	10%
	（邦永發展有限公司）
	Top Brain Development Limited	10%
	（豐迎置業有限公司）

– 18 –

GENERAL INFORMATION

APPENDIX

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Macfull Limited	Denmore Limited	20%
（名發有限公司）
	Smart Winner Development Limited	10%
	（邦永發展有限公司）
	Top Brain Development Limited	10%
	（豐迎置業有限公司）
China Overseas Installation	Shanghai Industrial Equipment	35%
Works Limited	Installation Corp.
（中國海外安裝工程	（上海市工業設備安裝公司）
有限公司）
China Overseas –	Young’s Engineering Holdings Limited	49%
Young’s Mechanical &
Electrical Engineering Limited
（中景機電工程有限公司）
Nanjing China Overseas	Contemporary Developments Ltd.	25%
Wolong Real Estate	（現代發展有限公司）
Development Limited
（南京中海臥龍房地產開發
有限公司）
Nanjing China Overseas	Contemporary Developments Ltd.	25%
Xiandai Real Estate	（現代發展有限公司）
Development Limited
（南京中海現代房地產開發
有限公司）
Shenzhen Haipeng Property	Shenzhen Gangpengji Investment	35%
Development Limited	Development Limited
（深圳市海鵬物業發展	（深圳市港鵬基投資發展
有限公司）	有限公司）

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GENERAL INFORMATION

APPENDIX

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Shanghai Haixing Real	Shanghai Zhongcheng Venture	49%
Estate Limited	Group Real Estate Limited
（上海海興房產有限公司）	（上海中城企業集團房地產有限公司）
Shanghai Winning Property	Prudential Surplus Limited	30%
Development Co., Ltd.	（佳利盛有限公司）
（上海永菱房地產有限公司）
Beijing Zhonghai Guangchang	Xihua Industrial Investment	25%
Real Estate Development	Group Limited
Limited	（鍚華實業投資集團有限公司）
（北京中海廣場房地產開發
經營有限公司）
Beijing Zhonghai Seagarden	Benefit Sales Limited	28%
Real Estate Development	（益業有限公司）
Co., Ltd.
（北京中海海洋花園房地產
開發有限公司）
Beijing Guo Run Property	Xihua Industrial Investment	25%
Development Limited	Group Limited
（北京國潤房地產開發	（鍚華實業投資集團有限公司）
經營有限公司）
Shenzhen China Overseas	Shenzhen Huifusheng	49%
Freight Co., Ltd.	Industrial Co., Ltd.
（深圳市中海運輸有限公司）（深圳市㶅福盛實業有限公司）
Guangzhou China Overseas	Dongjiang Industrial and Development	10%
Science City Residential Park	Company Limited
Development Co., Ltd.	(東江實業發展有限公司)
(廣州中海科學城生活園區
發展有限公司)
China Overseas Property	Shenzhen China Overseas Investment	11%
Group Co., Ltd.	Management Co., Ltd.
(中海地產股份有限公司)	(深圳市中海投資管理有限公司)

– 20 –

GENERAL INFORMATION

APPENDIX

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Nanchang China Overseas	Nanchang Daqiao Co., Ltd.	44.76%
Infrastructure Co., Ltd.	(南昌大橋有限責任公司)
(南昌中海基礎建設
有限公司)
Nanchang Haisheng	Nanchang Daqiao Co., Ltd.	44.76%
City Bridges Co., Ltd.	南昌大橋有限責任公司
南昌海盛城市橋樑有限公司
Nanchang Haixing	Nanchang Daqiao Co., Ltd.	44.76%
City Bridges Co., Ltd.	(南昌大橋有限責任公司)
(南昌海興城市
橋樑有限公司)
Shenyang Pengfa	Shenyang Huanggufen Coal Ash	10%
Industrial Co., Ltd.	Construction Materials Company Limited
瀋陽鵬發實業有限公司	(瀋陽皇姑粉煤灰建材有限公司)
Taixing China Overseas	Taixing Taitong Investment
Qiwei Ferry Establishment	Development Company Limited	30%
Co., Ltd.	(泰興市泰通投資發展有限公司)
(泰興中海七圩輪渡設施
經營有限公司)
Taixing Haotong Qiwei Qidu	Taixing Taitong Investment	30%
Transport Co., Ltd.	Development Company Limited
(泰興市浩通七圩汽渡	(泰興市泰通投資發展有限公司)
運輸有限公司)
Shenzhen Pengjun	Lai Ming	36%
Transportation Services
Co., Ltd.	Zhang Huashan	12%
(深圳市鵬駿運輸服務
有限公司)
Shandong Haitian	Shandong Municipal Construction	40%
Construction and Decoration	Corporation
Co., Ltd.	(山東市政建設總公司)
(山東海天建築裝飾
工程有限公司)

– 21 –

GENERAL INFORMATION

APPENDIX

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Beijing Jiayide Real	Beijing Lidi Property Co., Ltd.	20%
Estate Development Co., Ltd.	(北京利地地產有限公司)
(北京嘉益德房地產開發
有限公司)
Shenzhen China Overseas	Shenzhen Zhengtong Hongxing	40%
Seaview Villa Property	Industrial and Development Co., Ltd.
Development Co., Ltd.	(深圳市正通紅星實業發展有限公司)
(深圳市中海海景山莊
物業發展有限公司)
Chengdu China Overseas	Sino Land (Sichuan) Co., Ltd.	20%
Xinhe International	(信和置業(四川)有限公司)
Community Development
Co., Ltd.
(成都中海信和國際社區
發展有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Longhui Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海龍匯房
地產開發有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Long Rui Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海龍瑞
房地產開發有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Longze Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海龍澤
房地產開發有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Longrun Real	Consulting Co., Ltd.
Estate Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海龍潤
房地產開發有限公司)

– 22 –

GENERAL INFORMATION

APPENDIX

Name of	Name of	Percentage of
Subsidiaries	substantial shareholders	Shareholdings
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Zixia Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海紫霞
房地產開發有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Zirui Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海紫瑞
房地產開發有限公司)
Nanjing Lishui China	Nanjing Yuanhao Investment	25%
Overseas Zixi Real Estate	Consulting Co., Ltd.
Development Co., Ltd.	(南京源昊投資顧問有限公司)
(南京市溧水縣中海紫曦
房地產開發有限公司)

(d) Other Directors’ Interests

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have since 31 December 2003 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to the Company or any of its subsidiaries.

As at the Latest Practicable Date, none of the Directors or their respective associates had any interest in a business apart from the Company’s business which competes or is likely to compete, either directly or indirectly, the Company’s business, or which would be required to be disclosed under Rule 8.10 of the Listing Rules as if each of them were a controlling shareholder.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries, which was subsisting and was significant in relation to the business of the Group.

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GENERAL INFORMATION

APPENDIX

3. MATERIAL CHANGES

Other than the matters set out in this circular, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2003, the date to which the latest published audited financial statements of the Company were made up.

4. EXPERT

• (a) The following are the qualifications of the IFA who has given its opinions or advices which are contained in this circular:

Name Qualifications Access Capital Limited

Deemed licensed corporation to carry out Types 1, 4, 6 and 9 regulated activities under the SFO

• (b) As at the Latest Practicable Date, the IFA does not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

• (c) As at the Latest Practicable Date, the IFA has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they are included.

• (d) As at the Latest Practicable Date, the IFA does not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Group, nor which 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 financial statements of the Company were made up.

• (e) The letter of the IFA set out in the section headed “Letter from the Independent Financial Adviser” is given for incorporation in this circular.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries 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 against the Company or any of its subsidiaries.

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GENERAL INFORMATION

APPENDIX

6. SERVICE CONTRACTS

There is no existing or proposed service contracts between any of the Directors and the Company or any of its subsidiaries respectively, other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

7. GENERAL

• (a) The secretary of the Company is Mr. Keith Cheung, Solicitor.

• (b) Mr.Nip Yun Wing, executive director of the Company, has been appointed as qualified accountant for the purpose of Rule 3.24 of the Listing Rules, He is Fellow of the Hong Kong Society of Accountants and Fellow of the Association of Chartered Certified Accountants.

• (c) The registered office of the Company is at 29th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong. The share registrar of the Company is Standard Registrars Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (d) The English text of this circular shall prevail over the Chinese text.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection on any weekday (Saturdays and Sundays excepted) during normal business hours up to 4:00 p.m. on 6 September 2004 (Monday) at the registered office of the Company at 29th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong:

• (a) the letter of intent awarding the Construction Contract;

• (b) the letter from the Independent Board Committee, the text of which is set out in the section headed “Letter from the Independent Board Committee” of this Circular;

• (c) the letter from the IFA, the text of which is set out in the section headed “Letter from the Independent Financial Adviser” of this circular; and

• (d) the written consents referred to in paragraph 4 in this Appendix.

– 25 –