Beijing Urban Construction Design & Development Group Co., Limited — Proxy Solicitation & Information Statement 2009

Oct 12, 2009

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 licensed securities dealer or registered institution 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 Ltd., you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaim 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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(incorporated in Hong Kong with limited liability) (Stock Code: 688)

DISCLOSEABLE AND CONNECTED TRANSACTION FORMATION OF JOINT VENTURE WITH 中國建築股份有限公司 (CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION LIMITED) AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

China Everbright Capital Limited

A letter from the Board is set out on pages 4 to 8 of this circular and a letter from the Independent Board Committee is set out on pages 9 to 10 of this circular. A letter from China Everbright, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 11 to 17 of this circular.

A notice convening the Extraordinary General Meeting to be held at 11/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong, on Tuesday, 3 November 2009 at 11:00 a.m. is set out on pages 23 to 24 of this circular. Whether or not you are able to attend the Extraordinary General Meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the registrar of China Overseas Land & Investment Ltd., Tricor Standard Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting and any adjourned meeting (as the case may be) should you so wish.

13 October 2009

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Letter from China Everbright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23

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DEFINITIONS

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

“associate(s)”, “connected each has the meaning ascribed to it under the Listing Rules; person(s)”, “subsidiary(ies)”

• “Board” the board of Directors;

“China Overseas Shanghai” 中海發展（上海）有限公司 (China Overseas Development (Shanghai) Co., Ltd.)*, a limited liability company incorporated in the PRC which is a wholly owned subsidiary of the Company;

• “Company” China Overseas Land & Investment Limited, a company incorporated in Hong Kong with limited liability and whose shares are listed on the Main Board of the Stock Exchange (stock code: 688);

• “CSC” China State Construction International Holdings Limited, a company incorporated in the Cayman Islands with limited liability and whose shares are listed on the Main Board of the Stock Exchange (stock code: 3311);

• “CSCEC” 中國建築工程總公司 (China State Construction Engineering Corporation)*, a state-owned corporation organised and existing under the laws of the PRC, being the ultimate holding company of the Company;

• “CSCECL” 中國建築股份有限公司 (China State Construction & Engineering Corporation Limited)*, a joint stock company incorporated in the PRC held as to 52.64% by CSCEC;

• “CSCNo.8” 中國建築第八工程局有限公司 (China State Construction No.8 Engineering Corporation Limited)*, a limited liability company incorporated in the PRC and a wholly owned subsidiary of CSCECL;

• “Directors” the directors of the Company; “EGM” the extraordinary general meeting of the Company to be held at 11/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong, on Tuesday, 3 November 2009 at 11:00 a.m. to consider and approve, among other things, the JV Agreement and the JV Transaction;

• “Group” the Company and its subsidiaries from time to time; “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

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DEFINITIONS

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC;

• “Independent Board Committee”

an independent committee of the Board, consisting of Dr. Li Kwok Po, David, Mr. Lam Kwong Siu, Dr. Wong Ying Ho, Kennedy and Dr. Fan Hsu Lai Tai, Rita, all being independent non-executive Directors;

• “Independent Financial Adviser” or “China Everbright”

• China Everbright Capital Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the entering into of the JV Agreement and a corporation licensed to carry out type 1 (dealings in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO;

• “Independent Shareholders”

Shareholders other than CSCECL and its associates;

• “JV Agreement”

• the cooperation agreement entered into among China Overseas Shanghai, CSCECL and CSCNo.8 on 24 September 2009 involving, among other things, the formation of a joint venture among the parties for the purpose of the development of the Land through the JV Company;

• “JV Company”

• 上海海創房地產有限公司 (Shanghai Haicang Real Estate Limited)*, a limited liability company incorporated in the PRC which is currently wholly owned by China Overseas Shanghai and will be transformed into a joint venture company pursuant to the JV Agreement;

• “JV Transaction”

• the entering into of the JV Agreement and the transactions contemplated thereunder;

• “Land”

• a piece of land in Shanghai located at No. 6B(B6), 7C, Chang Feng, Putuo district* (上海市普陀區長風6B(B6)、7C) ;

• “Latest Practicable Date” 9 October 2009, 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 Peoples’ Republic of China, which for the purpose of this circular excludes Hong Kong, Macau and Taiwan;

• “RMB” Reminbi, the lawful currency of the PRC;

• “SFO”

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

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DEFINITIONS

“Share(s)”	ordinary share(s) of the Company of HK$0.10 each;
“Shareholders”	holder(s) of the Share(s) from time to time;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“%”	per cent.

Unless otherwise specified in this circular, amounts denominated in Renminbi have been converted, for the purpose of illustration only, into Hong Kong dollars at the rate of RMB0.88 = HK$1.00. The exchange rate is for the purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be converted at the above rate or any other rates.

• The English names are only translations of the official Chinese names. In case of inconsistency, the Chinese names prevail.

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LETTER FROM THE BOARD

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(incorporated in Hong Kong with limited liability)

(Stock Code: 688)

Executive Directors:

Mr. Kong Qingping (Chairman) Mr. Hao Jian Min (Vice Chairman and Chief Executive Officer) Mr. Xiao Xiao (Vice Chairman) Mr. Chen Bin Mr. Dong Daping Mr. Nip Yun Wing Mr. Luo Liang Mr. Lin Xiaofeng

Registered Office: 10/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong

Non-executive Director:

Mr. Wu Jianbin

Independent Non-executive Directors:

Dr. Li Kwok Po, David

Mr. Lam Kwong Siu

Dr. Wong Ying Ho, Kennedy

Dr. Fan Hsu Lai Tai, Rita

13 October 2009

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION FORMATION OF JOINT VENTURE WITH 中國建築股份有限公司

(CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION LIMITED)

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 24 September 2009, announcing that, on 24 September 2009, China Overseas Shanghai (a wholly owned subsidiary of the Company), CSCECL and CSCNo.8 entered into the JV Agreement, pursuant to which the parties agreed to form a joint venture to jointly develop the Land which China Overseas Shanghai has recently won an open tender to acquire.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things,

• the particulars of the JV Agreement;

• the letter from the Independent Board Committee with their view on the JV Agreement and the JV Transaction; and

• the letter from China Everbright with their advice on the JV Agreement and the JV Transaction to the Independent Board Committee and the Independent Shareholders,

as well as to seek the approval of the Independent Shareholders in respect of the entering into the JV Agreement and the JV Transaction.

BACKGROUND

On 10 September 2009, China Overseas Shanghai has won an open tender for the acquisition of the Land at a price of RMB7,006 million (approximately HK$7,961 million). The total investment amount for the development of the Land is estimated to be approximately RMB10,300 million (approximately HK$11,705 million), which is inclusive of the said purchase price of the Land. It is expected that the development of the Land will be completed in around four years.

Pursuant to the tender documents, China Overseas Shanghai has set up the JV Company (a wholly-owned subsidiary of China Overseas Shanghai with a paid-up registered capital of RMB10 million (approximately HK$11.4 million)) as the project company to hold and develop the Land.

It is expected that the JV Company will enter into the State-owned Land Use Right Transfer Contract (the “ Land Transfer Contract ”) with the relevant PRC government authority on/about 15 October 2009 to acquire the Land. Pursuant to the Land Transfer Contract, the purchase price of the Land will be paid as to (i) 10% within 15 days after the signing of the Land Transfer Contract; and (ii) 90% within 60 days after the signing of the Land Transfer Contract.

On 24 September 2009, China Overseas Shanghai, CSCECL and CSCNo.8 entered into the JV Agreement, pursuant to which CSCECL and CSCNo.8 agreed to acquire 50% equity interest in the JV Company with a view to jointly developing the Land together with the Group through the JV Company.

THE JV AGREEMENT

Date

24 September 2009

Parties

• (i) China Overseas Shanghai, a wholly owned subsidiary of the Company

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LETTER FROM THE BOARD

(ii) CSCECL

(iii) CSCNo.8, a wholly owned subsidiary of CSCECL

Formation of a joint venture

China Overseas Shanghai, CSCECL and CSCNo.8 shall form a joint venture by a transfer of 50% equity interest in the JV Company by China Overseas Shanghai to CSCECL and CSCNo.8 at a total cash consideration of RMB5 million (representing half of the JV Company’s existing registered capital fully paid up by China Overseas Shanghai) or through cash injections by each of China Overseas Shanghai, CSCECL and CSCNo.8 proportionally to increase the registered capital of the JV Company such that the equity interests of the JV Company will be owned by China Overseas Shanghai, CSCECL and CSCNo.8 as to 50%, 30% and 20% respectively (“ Formation ”). On completion of such Formation, the JV Company will become a jointly-controlled entity of the Company.

China Overseas Shanghai, CSCECL and CSCNo.8 shall provide funds as required by the JV Company from time to time by way of capital injections, loans or guarantees in proportion to their respective equity interests in the JV Company. The Board believes that the intention of the parties to the JV Agreement is to fund the first instalment (i.e. 10%) of the acquisition price of the Land by shareholders’ loan.

The total financial commitment of the Group in the JV Company is estimated to be in the amount of approximately RMB5,150 million (approximately HK$5,852 million), representing half of the estimated total investment amount for the development of the Land. The Group intends to fund its financial commitment from its internal resources and/or bank borrowings.

Scope of business

The JV Company will be engaged in the development, sale and the leasing of the Land and the provision of related property management services.

Term of co-operation

The joint venture is for a term of 10 years from the issue of a new business licence following the Formation and will dissolve after the development of the Land is completed, if earlier.

Profit and loss sharing

China Overseas Shanghai, CSCECL and CSCNo.8 shall share the profits, risks and losses of the JV Company in proportion to their respective equity interests in the JV Company.

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LETTER FROM THE BOARD

Board composition

The board of directors of the JV Company shall comprise of six persons, of which three persons will be nominated by China Overseas Shanghai, two persons by CSCECL and one person by CSCNo.8. The quorum of a board meeting is two-third of all directors. Save for certain reserved matters that require a unanimous vote by all directors attending the meeting, matters required to be resolved by the board of directors of the JV Company shall be resolved by two-third of all directors attending the board meeting, provided that in the event that none of the directors nominated by CSCECL or CSCNo.8 attends the meeting, the resolutions shall be passed by all directors attending the board meeting.

REASONS AND BENEFITS FOR THE JV TRANSACTION

The Group is principally engaged in property development and investment project management, infrastructure project investments, investment holding, real estate agency and management and treasury operations.

The Land is located at the prime site of Shanghai. The Group intends to develop the Land into a residential development. The Directors consider that the formation of a joint venture with CSCECL for the development of the Land is in line with the Group’s overall development strategy to share the funding burden with its parent group.

The Directors (other than the independent non-executive Directors whose opinion has been set out in the letter from the Independent Board Committee in this circular) consider that the JV Transaction is in the ordinary and usual course of business, on normal commercial terms after arm’s length negotiations between the parties, and the terms of the JV Transaction are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION ABOUT CSCECL AND CSCNO.8

CSCECL is a contractor mainly participating in the international construction market and CSCNo.8 (being CSCECL’s wholly owned subsidiary) is a contractor in the PRC construction market. Since CSCECL is the intermediate holding company of the Company , CSCECL and CSCNo.8 are connected persons of the Company.

IMPLICATIONS UNDER THE LISTING RULES

Since CSCECL and CSCNo.8 are connected persons of the Company, the JV Transaction constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules.

Since the largest applicable percentage ratio as defined under the Listing Rules calculated for the Company in respect of the JV Transaction exceeds 5%, the JV Transaction constitutes a discloseable and connected transaction subject to the reporting, announcement and independent shareholders’ approval requirements under Chapters 14 and 14A of the Listing Rules.

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LETTER FROM THE BOARD

The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the JV Transaction. The Independent Financial Adviser has also be appointed to advise the Independent Board Committee and the Independent Shareholders in this connection.

EXTRAORDINARY GENERAL MEETING

Set out on pages 23 and 24 of this circular is a notice convening the EGM to be held at 11/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong on Tuesday, 3 November 2009 at 11:00 a.m. at which an ordinary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the JV Agreement and the JV Transaction.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the registrar of the Company, Tricor Standard Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting and any adjourned meeting (as the case may be) should you so wish.

In accordance with the Rule 13.39(4) of the Listing Rules, voting at the EGM will be conducted by poll. The chairman of the EGM will demand a poll for the resolution to be proposed at the EGM in accordance with the Company’s Articles of Association. CSCECL and its associates, in aggregate holding 4,222,367,308 Shares as at the Latest Practicable Date, will abstain from voting at the EGM. The results of the voting will be announced in accordance with Rule 2.07C of the Listing Rules after the EGM.

RECOMMENDATION

Your attention is drawn to the letter of advice from the Independent Board Committee and the letter from China Everbright as set out on pages 9 to 10 and 11 to 17 respectively to this circular.

Your attention is also drawn to the additional information set out in the appendix to this circular and the notice of the EGM.

Yours faithfully, By Order of the Board China Overseas Land & Investment Ltd. Kong Qingping Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(incorporated in Hong Kong with limited liability)

(Stock Code: 688)

13 October 2009

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION FORMATION OF JOINT VENTURE WITH 中國建築股份有限公司

(CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION LIMITED) AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

We refer to the circular dated 13 October 2009 (the “ Circular ”) issued by the Company to its Shareholders of which this letter forms part. Terms defined in the Circular shall have the same meanings herein unless the context otherwise requires.

We have been appointed to form the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the JV Agreement and the JV Transaction, are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. China Everbright has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the JV Agreement and the JV Transaction.

We wish to draw your attention to the letter from the Board, as set out on pages 4 to 8 of this Circular and the text of a letter of advice from China Everbright, as set out on pages 11 to 17 of this Circular, both of which provide details of the JV Agreement and the JV Transaction.

Having considered the terms of the JV Agreement and the JV Transaction, the advice of China Everbright and the relevant information contained in the letter from the Board, we are of the opinion that the JV Agreement and the JV Transaction, are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM.

Yours faithfully, For and on behalf of

Independent Board Committee of China Overseas Land & Investment Ltd.

Li Kwok Po, David Independent Non-executive Director

Lam Kwong Siu Independent Non-executive Director

Wong Ying Ho, Kennedy Independent Non-executive Director

Fan Hsu Lai Tai, Rita Independent Non-executive Director

— 10 —

LETTER FROM CHINA EVERBRIGHT

The following is the text of the “Letter from China Everbright” to the Independent Board Committee and the Independent Shareholders prepared for the purpose of inclusion in this circular.

13 October 2009

• To the Independent Board Committee and the independent Shareholders of China Overseas Land & Investment Ltd.

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION FORMATION OF JOINT VENTURE WITH CHINA STATE CONSTRUCTION & ENGINEERING CORPORATION LIMITED

INTRODUCTION

We refer to our engagement as the independent financial adviser to make recommendation to the Independent Board Committee and the Independent Shareholders as to whether the JV Transaction is fair and reasonable and is in the interests of the Company and the Independent Shareholders as a whole. The details of the JV Agreement are set out in the letter from the Board (“ Letter from the Board ”) in the circular to the Shareholders dated 13 October 2009 (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

As referred to in the Letter from the Board, on 24 September 2009, China Overseas Shanghai (a wholly owned subsidiary of the Company), CSCECL and CSCNo.8 (a wholly owned subsidiary of CSCECL) entered into the JV Agreement, pursuant to which the parties agreed to form a joint venture to jointly develop the Land which China Overseas Shanghai has recently won an open tender to acquire.

CSCECL is the intermediate holding company of the Company. Therefore, CSCECL and CSCNo.8 are connected persons of the Company. As a result, the JV Transaction constitutes a connected transaction for the Company under the Listing Rules and is subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Voting at the EGM will be conducted by poll and CSCECL and its associates will abstain from voting at the EGM.

In formulating our advice and recommendation, we have relied on the information and facts supplied, and the opinions expressed, by the Directors and management (the “ Management ”) of the Company and have assumed that such information, facts and opinions are true and accurate. We have also sought and received confirmation from the Directors that no material factors have been omitted

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LETTER FROM CHINA EVERBRIGHT

from the information supplied and opinions expressed to us. However, we have not conducted any independent investigation into the business, operations or financial condition of the Group and CSCECL. We have assumed that all statements and presentations made or referred to in the Circular were accurate at the time when they were made and are true at the Latest Practicable Date.

We consider we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. Apart from normal professional fees for our services to the Company in connection with the engagement described above, no arrangement exists whereby China Everbright will receive any benefits from the Group, CSCECL or any of their respective associates.

PRINCIPAL FACTORS AND REASONS TAKEN INTO ACCOUNT

In formulating our view on the JV Transaction, we have taken into consideration the principal factors and reasons as set out below. In reaching our conclusion, we have considered the results of the analysis in light of each other and ultimately reached our opinion based on the results of all analysis taken as a whole.

(A) Background to and reasons for the entering into of the JV Agreement

Background

On 24 September 2009, the Company announced that China Overseas Shanghai (a wholly owned subsidiary of the Company), CSCECL and CSCNo.8 (a wholly owned subsidiary of CSCECL) entered into the JV Agreement, pursuant to which the parties agreed to form a joint venture to jointly develop the Land which China Overseas Shanghai has recently won an open tender to acquire.

Upon completion (“ Completion ”) of the JV Agreement, the equity interests of the JV Company will be owned by China Overseas Shanghai, CSCECL and CSCNo.8 as to 50%, 30% and 20% respectively, and the JV Company will become a jointly-controlled entity of the Company. Details of the major terms of the JV Agreement are set out in the Letter from the Board.

Reasons for entering into of the JV Agreement

Principal business of the Group

The Group is principally engaged in property development and investment project management, infrastructure project investments, investment holding, real estate agency and management and treasury operations.

As disclosed in the interim report of the Company for the six months ended 30 June 2009 (the “ 2009 Interim Report ”), the total turnover of the Group was HK$15.48 billion for the six months ended 30 June 2009, representing an increase of 44.4% as compared to the corresponding

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LETTER FROM CHINA EVERBRIGHT

period last year. The turnover of the Group’s property development business in mainland China was HK$14.83 billion, accounting for 95.8% of the total turnover and representing an increase of 58.1%. The turnover of the Hong Kong and Macau property development business decreased by 73.6% to about HK$220 million.

As stated in the 2009 Interim Report, the Group aims to expand sources in getting high quality land reserve through various means and ways, and to replenish not less than 4 million square meters of land reserve in 2009 in order to ensure sustainable rapid growth in the coming years.

Cooperation with and support from CSCECL

On 10 September 2009, China Overseas Shanghai has won an open tender for the acquisition of a piece of land located in No. 6B(B6), 7C, Chang Feng, Putuo district, Shanghai. As advised by the Management, the Group plans to develop the acquired land into a high-end quality residential project (“ Project ”) with gross floor area of approximately 393,500 square meters.

As stated in the Letter from the Board, the acquisition price for the Land is RMB7.006 billion, representing approximately 21.14% of the Company’s net assets value as at 30 June 2009. The total investment amount for the Project is estimated to be approximately RMB10.3 billion, representing approximately 31.07% of the Company’s net assets value as at 30 June 2009. It is expected that the Project will be completed in around four years.

In light of the size of required investment, the Group intends to adopt a more conservative approach for the development of the Project, and through the JV Transaction, share the funding burden of the JV Company with CSCECL and CSCNo.8.

CSCECL is a contractor mainly participating in the international construction market and CSCNo.8 (being CSCECL’s wholly owned subsidiary) is a leading contractor for the design, construction, scientific research, and material equipment supply of large industrial and civil buildings in the PRC construction market.

Taking into account of their extensive experience and proven track record in the PRC construction market, the Management believes that the introduction of CSCECL and CSCNo.8 as shareholders of the JV Company through the JV Transaction will benefit the development of the JV Company by improving cost and time efficiency in managing the implementation of the Project.

Having considered that (i) the Group’s business nature and future development plan in the PRC market; and (ii) the benefits arising from the JV Transaction, details of which are set out in this paragraph, we are of the view that (i) the formation of the JV Company is consistent with the overall corporate strategy of the Group; and (ii) the JV Transaction is in the interest of the Company and the Independent Shareholders as a whole.

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LETTER FROM CHINA EVERBRIGHT

(B) Major terms of the JV Agreement

Scope of business and term of co-operation

Pursuant to the JV Agreement, the JV Company will be engaged in the development, sale and the leasing of the Land and the provision of related property management services.

The joint venture is for a term of 10 years from the issue of a new business licence following the Formation and will dissolve after the development of the Land is completed, if earlier.

Shareholding structure

Under the JV Agreement, equity capital of the JV Company, a limited liability company established in the PRC, will be owned by China Overseas Shanghai, CSCECL and CSCNo.8 as to 50%, 30% and 20% respectively. Upon Completion, the JV Company will be treated as a jointly controlled entity of the Company.

Board composition of the JV Company

The board of directors of the JV Company shall comprise of six persons, of which three persons will be nominated by China Overseas Shanghai, two persons by CSCECL and one person by CSCNo.8. The quorum of a board meeting is two-third of all directors. Save for certain reserved matters that require a unanimous vote by all directors attending the meeting, matters required to be resolved by the board of directors of the JV Company shall be resolved by two-third of all directors attending the board meeting, provided that in the event that none of the directors nominated by CSCECL or CSCNo. 8 attends the meeting, the resolutions shall be passed by all directors attending the board meeting.

Based on the above, we are of the view that the Company will be able to control the operation and financial position of the JV Company.

Registered capital, total investment and funding arrangements

The registered capital of the JV Company is RMB10 million. As stated in the Letter from the Board, it is expected that the JV Company will enter into the State-owned Land Use Right Transfer Contract (the “ Land Transfer Contract ”) with the relevant PRC government authority on/about 15 October 2009 to acquire the Land. The purchase price of the Land will be paid as to (i) 10% within 15 days after the signing of the Land Transfer Contract; and (ii) 90% within 60 days after the signing of the Land Transfer Contract.

China Overseas Shanghai, CSCECL and CSCNo.8 shall provide funds as required by the JV Company from time to time by way of capital injections, loans or guarantees in proportion to their respective equity interests in the JV Company.

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LETTER FROM CHINA EVERBRIGHT

The total financial commitment of the Group in the JV Company is estimated to be in the amount of approximately RMB5,150 million (approximately HK$5,852 million), representing half of the estimated total investment amount for the Project. The Group intends to fund its financial commitment from its internal resources and/or bank borrowings.

Profit sharing

Pursuant to the JV Agreement, the profits and losses from the operation of the JV Company shall be distributed to each of China Overseas Shanghai, CSCECL and CSCNo.8 in proportion to their respective capital contribution to the JV Company.

Having considered that each party’s power to nominate director(s) of the JV Company, contribution to the registered capital, the total investment amount, future funding of the JV Company, if required, and sharing of profit of the JV Company are based on their respective shareholding in the JV Company, we are of the view that the terms of the JV Agreement are fair and reasonable so far as the Group and the Independent Shareholders are concerned and in the interests of the Group and the Independent Shareholders as a whole.

(C) Financial effects

Net asset value

As stated in the Letter from the Board, China Overseas Shanghai, CSCECL and CSCNo.8 shall form a joint venture by a transfer of 50% equity interest in the JV Company by China Overseas Shanghai to CSCECL and CSCNo.8 at a total cash consideration of RMB5 million (representing half of the JV Company’s existing registered capital fully paid up by China Overseas Shanghai) or through cash injections by each of China Overseas Shanghai, CSCECL and CSCNo.8 proportionally to increase the registered capital of the JV Company such that the equity interests of the JV Company will be owned by China Overseas Shanghai, CSCECL and CSCNo.8 as to 50%, 30% and 20% respectively.

Upon the JV Company has been formed, the JV Company will become a jointly-controlled entity of the Company and their results and financial positions will be equity accounted for in the Group’s consolidated financial statements.

As the JV Company will be a new start up and each of the parties shall contribute the registered capital and total investment amount of the JV Company in proportion to their respective equity interest, the investment by the Group in the JV Company is not expected to have any significant immediate effect on the net assets of the Group.

Working capital and gearing

As stated in the 2009 Interim Report, the bank balances and cash, current assets and current liabilities of the Group were approximately HK$18.54 billion, HK$80.74 billion and HK$59.42 billion respectively as at 30 June 2009. The Group had unutilized banking facilities of approximately HK$2.67 billion as at 30 June 2009.

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LETTER FROM CHINA EVERBRIGHT

The Group’s proportionate maximum total investment amount in the JV Company of approximately RMB5,150 million (approximately HK$5,852 million) is currently expected to be financed by its internal cash resources and/or external bank borrowings. However, the Group is not able to ascertain the proportion between internal cash resources and external bank borrowings at this stage. Taken into account the cash position and available bank facilities of the Group as at 30 June 2009, the Group’s share of the maximum total investment amount in the JV Company is not expected to have any significant adverse effect on the working capital of the Group.

No matter the Group’s share of the maximum total investment amount in the JV Company will be financed by internal cash resources and/or external bank borrowings, the net gearing ratio of the Group will increase because of the Group’s investment in the Project. However, the increase in the Group’s net gearing ratio cannot be ascertained at this stage as the Group is not able to ascertain the proportion between internal cash resources and external bank borrowings as at the Latest Practicable Date.

As set out in the 2009 Interim Report, the net gearing ratio of the Group as at 30 June 2009 was approximately 13.2% (calculated on the basis of dividing the difference between bank loans and guaranteed notes payable and the bank balance and cash by shareholders’ equity).

Based on the net gearing ratio of the Group as at 30 June 2009 and assuming that the Group’s share of the maximum total investment amount in the JV Company of approximately RMB5,150 million (approximately HK$5,852 million) were fully financed by debt financing, the Group’s net gearing ratio would increase to approximately 29% as at 30 June 2009.

Given that the Group’s net gearing ratio as at 30 June 2009 was relative low and the JV Transaction would allow the Group to expand its land reserve in core district of Shanghai, we are of the view that the increase in the net gearing ratio of the Group after the JV Transaction is justifiable and acceptable.

Earnings

Following the formation of the JV Company, the JV Company will be treated as a jointly controlled entity of the Company, and their results and financial positions will be equity accounted for in the Group’s consolidated financial statements.

Since the development of the Project is still in early stage, it is not expected that significant contributions will be recorded from the JV Company for the Group in the near future. However, after completion of the development of the Project, it is expected that the JV Company would contribute positively to the Group’s future financial performance.

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LETTER FROM CHINA EVERBRIGHT

RECOMMENDATION

Having considered the principal factors and reasons referred to in the above, we are of the opinion that (i) the JV Transaction falls within the ordinary and usual course of business of the Group and is in the interests of the Group and the Independent Shareholders as a whole; and (ii) the terms of the JV Agreement are on normal commercial terms, fair and reasonable so far as the Group and the Independent Shareholders are concerned and in the interests of the Group and the Independent Shareholders as a whole.

Therefore, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the JV Transaction.

Yours faithfully, For and on behalf of China Everbright Capital Limited Alvin Kam Director

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GENERAL INFORMATION

APPENDIX

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 not contained in this circular, the omission of which would make any statement in this circular misleading.

DISCLOSURE OF DIRECTORS’ INTERESTS FOR THE COMPANY

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which (a) 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 were taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies of the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

Long position in shares and underlying shares of the Company

( all being personal interest and being held in the capacity of beneficial owner )

		Number of		% of shares
		underlying		in issue as
		shares		at the Latest
	Number of	comprised in		Practicable
Name of director	shares held	share options	Total	Date
		(Note 1)
Mr. Kong Qingping	7,435,760	1,359,334	8,795,094	0.108%
Mr. Hao Jian Min	5,670,600	582,572	6,253,172	0.077%
Mr. Xiao Xiao	1,530,680	404,564	1,935,244	0.024%
Mr. Wu Jianbin	3,036,800	582,572	3,619,372	0.044%
Mr. Chen Bin	1,048,320	323,651	1,371,971	0.017%
Mr. Dong Daping	453,440	80,913	534,353	0.007%
Mr. Luo Liang	620,620	129,460	750,080	0.009%
Mr. Lin Xiaofeng	1,110,000	161,825	1,271,825	0.016%
Dr. Li Kwok Po, David	6,000,000	—	6,000,000	0.073%

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GENERAL INFORMATION

APPENDIX

Long positions in shares and underlying shares of the Associated Corporation - CSC (unless otherwise stated, all being personal interest and being held in the capacity of beneficial owner)

		Number of		% of shares
		underlying		in issue as
		shares		at the Latest
	Number of	comprised in		Practicable
Name of director	shares held	share options	Total	Date
		(Note 2)
Mr. Kong Qingping	2,988,800	3,160,834	6,149,634	0.209%
Mr. Hao Jian Min	3,206,240	1,843,820	5,050,060	0.171%
Mr. Xiao Xiao	—	2,801,188	2,801,188	0.095%
Mr. Wu Jianbin	3,306,240	1,843,820	5,150,060	0.175%
Mr. Chen Bin	1,437,696	1,264,334	2,702,030	0.092%
Mr. Dong Daping	1,043,840	614,607	1,658,447	0.056%
Mr. Luo Liang	1,889,280	1,053,611	2,942,891	0.100%
Mr. Lin Xiaofeng	—	614,607	614,607	0.021%
Dr. Li Kwok Po, David	100,000	—	100,000	0.003%

Notes:

1. The exercise price for the share options is HK$1.13 per share (before adjustment for open offer). Immediately after the adjustment on 3 February 2009, the exercise price for the share options is HK$1.118 per share. The vesting period is from 18 June 2004 to 17 June 2009 (both days inclusive) and the exercise period is from 18 June 2005 to 17 June 2014 (both days inclusive). 20% can be exercised annually (“Limit”) from 18 June 2005. Unexercised portion of the Limit (if any) can be exercised in the remaining exercise period and will not be included in calculating the Limit of the relevant year. It can be fully exercised from 18 June 2009 to 17 June 2014 (both days inclusive).

2. The exercise price for the share options is HK$0.99 per share (before share subdivision). Immediately after the share subdivision approved on 12 June 2008, the exercise price for the share options is HK$0.2475 per share. Immediately after the adjustment for the rights issue made on 1 September 2009, the exercise price for the share options is HK$0.2345 per share. The vesting period is from 14 September 2005 to 13 September 2010 (both days inclusive) and the exercise period is from 14 September 2006 to 13 September 2015 (both days inclusive). 20% can be exercised annually (“Limit”) from 14 September 2006. Unexercised portion of the Limit (if any) can be exercised in the remaining exercise period and will not be included in calculating the Limit of the relevant year. It can be fully exercised from 14 September 2010 to 13 September 2015 (both days inclusive).

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company hold any interest or short position in the shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which (a) 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

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APPENDIX

GENERAL INFORMATION

or deemed to have under such provisions of the SFO); or (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies of the Listing Rules, to be notified to the Company and the Stock Exchange.

There is no contract or arrangement subsisting at the Latest Practicable Date in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

None of the Directors has had any direct or indirect interest in any assets which have since 31 December 2008 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

Save as disclosed in this circular, so far as was known to the Directors, none of the Directors is a director or employee of a company which has an interest or short position in the shares and underlying shares of the issuer which would fall to be disclosed to the issuer under the provisions of Divisions 2 and 3 of Part XV of the SFO.

SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract or a proposed service contract with any member of the Group which is not expiring or determinable by the employer within one year without the payment of compensation (other than statutory compensation).

MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2008, the date to which the latest published audited consolidated financial statements of the Company have been made up.

COMPETING BUSINESS INTERESTS OF DIRECTORS

As at the Latest Practicable Date, the interests of the Directors in the businesses (other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or member of the Group) which are considered to compete or are likely to compete, either directly or indirectly, with the businesses of the Group were as follows:

Messrs. Kong Qingping, Hao Jian Min, Xiao Xiao, Wu Jianbin, Chen Bin, Dong Daping and Luo Liang held directorships in CSCEC, the Company’s ultimate holding company, and/or its subsidiaries (but excluding the Group), which are engaged in construction, property development and related business. Mr. Kong Qingping is also the Vice President of CSCECL.

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GENERAL INFORMATION

APPENDIX

Save as disclosed above, the Company had not been notified of any other relationship among the directors, senior management or substantial or controlling shareholders of the Company.

As the Board operates independently of the boards of these companies, the Group operates its business independently of, and at arm’s length from, the business of these companies.

Save as disclosed in this section, as at the Latest Practicable Date, none of the Directors and their respective associates had any interest in a business apart from the Group’s business, which competes or is likely to compete directly or indirectly, with the Group’s business and would require disclosure under Rule 8.10 of the Listing Rules.

EXPERT

• (a) The following is the qualification of the expert who has given its opinion and advice which are contained in this circular:

Name

Qualification

• China Everbright a corporation licensed to carry out type 1 (dealings in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities under the SFO

• (b) China Everbright had no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group as at the Latest Practicable Date.

• (c) China Everbright has given and has not withdrawn its written consent to the issue of this circular with inclusion of its letter and references to its name in the form and context in which they appear.

• (d) As at the Latest Practicable Date, China Everbright did 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, or which are proposed to be acquired or disposed of by or leased to any member of Group since 31 December 2008, being the date to which the latest published audited consolidated financial statements of the Company were made up.

• (e) The letter of China Everbright is given as of the date of this circular for incorporation herein.

MISCELLANEOUS

The English texts of this circular and the accompanying form of proxy shall prevail over the Chinese texts.

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GENERAL INFORMATION

APPENDIX

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during business hours at the office of the Company at 10/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong from the date of this circular up to and including 3 November 2009 (except Saturdays and Sundays) and will be available for inspection at the EGM:-

• (a) the JV Agreement;

• (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; and

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

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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==> picture [363 x 58] intentionally omitted <==

(incorporated in Hong Kong with limited liability)

(Stock Code: 688)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the shareholders of China Overseas Land & Investment Ltd. (the “ Company ”) will be held at 11/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong, on Tuesday, 3 November 2009 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT:

• (a) the JV Agreement (as defined in the circular of the Company dated 13 October 2009 of which this notice forms part) (the “ Circular ”)) (a copy of which is tabled at the meeting and marked “A” and initialled by the chairman of the meeting for identification purpose) and the transactions contemplated thereunder and the implementation thereof be and are hereby approved, ratified and confirmed;

• (b) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute any such other documents, instruments and agreements and to do any such acts or things deemed by him to be incidental to, ancillary to or in connection with the matters contemplated in the JV Agreement and the transactions contemplated thereunder including the affixing of Common Seal thereon.”

By Order of the Board China Overseas Land & Investment Ltd. Kong Qingping Chairman

Hong Kong, 13 October 2009

Registered office:

10/F., Three Pacific Place, 1 Queen’s Road East, Hong Kong

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

• (1) A form of proxy for use at the meeting is enclosed herewith.

• (2) Any member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him/her. A proxy need not be a member of the Company.

• (3) The instrument appointing a proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing or, if the appointor is a corporation, either under its common seal or under the hand of an officer, attorney or other person authorised to sign the same.

• (4) In order to be valid, the form of proxy, together with the power of attorney (if any) or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be deposited at the Company’s registrar, Tricor Standard Limited, 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be).

• (5) Where there are joint registered holders of any share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she was solely entitled thereto, but if more than one of such joint holders are present at the meeting, whether in person or by proxy, the joint registered holders present whose name stands first on the register of members in respect of the shares shall be accepted to the exclusion of the votes of the other registered holders.

• (6) Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting or at any adjourned meeting thereof (as the case may be) should they so wish, and in such event, the form of proxy shall be deemed to be revoked.

• (7) The register of members of the Company will be closed, for the purpose of determining the identity of members who are entitled to attend and vote at the meeting, from Monday, 2 November 2009 to Tuesday, 3 November 2009, both days inclusive, during which period no transfers of shares will be registered. In order to be entitled to attend and vote at the meeting, all properly completed and duly stamped transfer forms accompanied by the relevant share certificates should be lodged with the Company’s registrar, Tricor Standard Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Friday, 30 October 2009.

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