Bloks Group Limited — Board/Management Information 2007

Feb 28, 2007

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

HONG KONG PHARMACEUTICAL HOLDINGS LIMITED 香港葯業集團有限公司[*]

(incorporated in Bermuda with limited liability)

(Stock code: 182)

PROPOSED INCREASE IN AUTHORIZED ORDINARY SHARE CAPITAL PROPOSED ADOPTION OF A NEW SHARE OPTION SCHEME PROPOSED CHANGE OF AUDITORS CHANGE IN BOARD LOT SIZE

The Board announces that it proposes to adopt the New Share Option Scheme and to increase the authorized ordinary share capital of the Company from HK$35,000,000 to HK$60,000,000. The adoption of the New Share Option Scheme and the increase in authorized share capital are subject to approval of the Shareholders at the AGM. A circular setting out, among other things, details of the New Share Option Scheme, the proposed increase in the authorized share capital of the Company will be dispatched to the Shareholders as soon as practicable.

It has resolved to change the board lot size for trading in the Shares on the Stock Exchange from 100,000 Shares to 10,000 Shares with effect from 19 March 2007. The Shareholders should refer to the trading arrangement set out in this announcement.

Moore Stephens have tendered their resignation as auditors of the Company. The Company proposes to appoint, PwC as auditors of the Company to fill the causal vacancy following the resignation of Moore Stephens subject to the approval of the Shareholders at the AGM.

PROPOSED ADOPTION OF THE NEW SHARE OPTION SCHEME

After the restructuring of the Company completed in 2006, the new management has reviewed the staff remuneration policies of the Group. Based on such review, the Directors propose to terminate the Existing Share Option Scheme and to adopt the New Share Option Scheme in accordance with the requirements under Chapter 17 of the Listing Rules.

Adoption of the New Share Option Scheme is subject to (a) approval of the Shareholders at the AGM; and (b) the Stock Exchange granting the approval for the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of any options which may be granted under the New Share Option Scheme which shall not be more than 10% of the issued share capital of the Company as at the date of the AGM. An application for the above listing approval will be made to the Stock Exchange.

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Details of the New Share Option Scheme and other disclosure requirements under Chapter 17 of the Listing Rules will be set out in a circular to be dispatched to the Shareholders as soon as practicable.

PROPOSED INCREASE IN AUTHORIZED ORDINARY SHARE CAPITAL

The Board intends to put forward a proposal to the Shareholders to increase the authorized ordinary share capital of the Company from HK$35,000,000, dividing into 3,500,000,000 Shares, to HK$60,000,000, dividing into 6,000,000,000 Shares, by the addition of HK$25,000,000, divided into 2,500,000,000 new Shares which will rank pari passu in all respects with all the existing Shares. The authorized preference share capital of the Company will remain unchanged at HK$25,000,000, dividing into 2,500,000,000 Preference Shares.

As at the date of this announcement, 950,379,669 Shares and 2,160,000,000 Preference Shares have already been issued. The aggregate number of the 950,379,669 Shares in issue and the 2,160,000,000 new Shares which may be issued by the Company (at the prevailing conversion price as at the date of this announcement) upon full conversion of the Preference Shares represents approximately 88.9% of the existing authorized ordinary share capital of the Company. The Directors consider that the increase in authorized ordinary share capital to help the Company carry out equity-related transactions (including any share placement) when the right opportunities arise and is in the interests of the Company and the Shareholders as a whole.

The proposed increase in the authorized ordinary share capital of the Company is subject to approval of the Shareholders at the AGM. Under the relevant Bermuda laws, the Company is required to file a memorandum of increase in the authorized share capital together with a certified resolution with the Bermuda Registrar of Companies within 30 days of the effective date of the increase.

The Company has no present plan or intention to issue any Shares, save for the issuing of new Shares pursuant to the exercise of any share options granted or may be granted under the Existing Share Option Scheme or the New Share Option Scheme and the conversion of the Preference Shares.

PROPOSED CHANGE OF AUDITORS

On 23 February 2007, Moore Stephens tendered its resignation to the Company with effect from the date of its resignation letter and will not seek re-appointment as auditors of the Company at the AGM. In this regard, the Board is not aware of any facts or circumstances that ought to be brought to the notice of the Shareholders of the Company. Moore Stephens have issued a letter to the audit committee of the Company, confirming that there are no circumstances connected with their resignation that they consider ought to be brought to the attention of the Shareholders.

The Board proposes to appoint, PwC as auditors of the Company to fill the causal vacancy following the resignation of Moore Stephens. The appointment of PwC will be subject to approval of the Shareholders at the AGM in accordance with the bye-laws of the Company.

As part of a general review of its obligations under the new corporate governance code, the Board had invited proposals from other audit firms for the purpose of reviewing professional appointments generally. Having taken into account the various proposals, the Board decided to appoint PwC as the auditors of the Company at the AGM as PwC’s proposal meets most of the needs of the Company and fits in well with the Company’s corporate governance approach.

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Save for the above, to the best of the Directors’ knowledge, there is no other information which should be brought to the attention of the Shareholders in this regard.

CHANGE IN BOARD LOT SIZE

The Board announces that it has resolved to change the board lot size for trading in the Shares on the Stock Exchange from 100,000 Shares to 10,000 Shares with effect from 19 March 2007. Based on the closing price of HK$0.415 per Share as at the date of this announcement and the existing board lot size of 100,000 Shares, the prevailing board lot value is HK$41,500. On the basis of the aforesaid closing price and the new board lot size of 10,000 Shares, the new board lot value would be HK$4,150. The change in board lot size will reduce the board lot value which may help further improve the trading liquidity of the Shares on the Stock Exchange. The change of board lot size will not result in any change of the relative rights of the Shareholders and is not expected to create any additional odd-lots. Accordingly, no matching agent will be engaged by the Company to stand in the market to match the sales and purchases of oddlots.

EXPECTED TIMETABLE FOR THE CHANGE OF BOARD LOT SIZE

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First day of free exchange of share certificates in the denomination of 10,000 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 March

Effective date for change of board lot size from

100,000 Shares to 10,000 Shares: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 March

Parallel trading in board lot of 10,000 Shares

in the original counter and in board lot of 100,000 Shares in temporary counter commences: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:30 a.m. on 19 March

Temporary counter for trading in board lot of 100,000 Shares closes: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on 12 April

Parallel trading in board lot of 10,000 Shares

in the original counter and in board lot of 100,000 Shares in temporary counter ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on 12 April

Latest time for free exchange of share certificates

in the denomination of 10,000 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 April

FREE EXCHANGE OF SHARE CERTIFICATES

All existing share certificates will continue to be valid evidence of title to the relevant Shares for delivery, transfer and settlement purposes. Nevertheless, the Shareholders may submit their existing share certificates for the Shares to the Company’s branch share registrar in Hong Kong, Tengis Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, in exchange for the share certificates in the denomination of 10,000 Shares free of charge between 9:00 a.m. and 4:00 p.m. on any business day from 5 March 2007 to 16 April 2007 (both days inclusive). After 16 April 2007, the exchange of any

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existing share certificates for new share certificates in the denomination of 10,000 Shares will be made at a cost of HK$2.5 (or such other amount as may from time to time be specified by the Stock Exchange) for each share certificate submitted for cancellation or each new share certificate obtained, whichever number is higher. New share certificates in the denomination of 10,000 Shares are expected to be available for collections from Tengis Limited at the above address by the relevant Shareholders within 10 business days after submission of the existing share certificates to Tengis Limited for exchange proposes.

GENERAL

As at the date of this announcement, the Board comprises Mr. Ko Chun Shun, Johnson, Mr. Tsoi Tong Hoo, Tony, Mr. Chan Kam Kwan, Jason, Mr. Wong Fan, Frank, and Mr. Yeung Heung Yeung (who are executive Directors), Mr. Kelvin Edward Flynn (who is a non-executive Director), and Mr. Ho Tak Man, Billy, Mr. Yap Fat Suan and Dr. Wong Yau Kar, David (who are independent non-executive Directors).

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

“AGM”	the next annual general meeting to be convened and held by the Company
“Board”	the board of the Directors
“business days”	any day on which the Stock Exchange is open for the transaction of business
“Company”	Hong Kong Pharmaceutical Holdings Limited, a company incorporated in
	Bermuda with limited liability, and the Shares of which are listed on the
	main board of the Stock Exchange
“Directors”	directors of the Company
“Existing Share	the existing share option scheme adopted by the Company on
Option Scheme”	6 November 2001
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong Special Administrative
	Region of the People’s Republic of China
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of
	Hong Kong Limited
“Moore Stephens”	Messrs. Moore Stephens
“New Share	the new share option scheme proposed to be adopted by the Company
Option Scheme”	at the AGM
“Preference Shares”	preference shares of the Company of HK$0.01 each
“PwC”	Messrs. PricewaterhouseCoopers

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“Shareholders”

holders of the Shares

“Shares”

the ordinary share(s) of HK$0.01 each in the share capital of the Company

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

By order of the Board HONG KONG PHARMACEUTICAL HOLDINGS LIMITED Ko Chun Shun, Johnson Chairman

27 February 2007, Hong Kong

* for identification purposes only

Please also refer to the published version of this announcement in the China Daily.

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