China City Infrastructure Group Limited — Proxy Solicitation & Information Statement 2005

May 4, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular, 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 (the “ Shares ”) of HK$0.01 each in the capital of Wah Yuen Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the 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 document, 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 document.

WAH YUEN HOLDINGS LIMITED 華 園 控 股 有 限 公 司 (Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2349)

(1) PROPOSED GRANT OF GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE BY THE COMPANY OF ITS OWN SHARES; AND (2) PROPOSED RE-ELECTION OF DIRECTORS

A notice convening an annual general meeting of the Company to be held at 2nd Floor, On Shing Industrial Building, Nos. 2-16 Wo Liu Hang Road, Fo Tan, Shatin, New Territories, Hong Kong on Tuesday, 7 June 2005 at 9:30 a.m. is set out on pages 66 to 70 of the annual report of the Company. A form of proxy for use at the annual general meeting is enclosed with the annual report. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk.

Whether or not you are able to attend the annual general meeting, you are requested to complete the form of proxy, in accordance with the instructions printed thereon and deposit the same at the offices of the Company’s branch share registrar and transfer office in Hong Kong, Tengis Limited at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the annual general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the annual general meeting or any adjournment thereof should you so wish.

28 April 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandate and Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Re-Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Action to be Taken . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Appendix II – Procedures by which Shareholders may demand a poll at
General Meeting pursuant to the Articles of Association . . . . . . . . . . . . .	11
Appendix III – Details of Directors proposed to be Re-Elected at the AGM. . . . . . . . . . . . .	12

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DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be convened and held to
	consider and, if thought fit, to approve, among other things, the proposed
	grant of the General Mandate and the Repurchase Mandate and the re-
	election of Directors
“Articles of Association”	the articles of association of the Company
“associate”	has the meaning ascribed to this term under the Listing Rules
“Board”	the board of Directors
“Company”	Wah Yuen Holdings Limited, a company incorporated in the Cayman
	Islands with limited liability and the issued Shares of which are listed
	on the main board of the Stock Exchange
“Directors”	the directors of the Company
“General Mandate”	the general mandate proposed to be granted to the Directors at the AGM
	to issue further new Shares not exceeding 20% of the issued share capital
	of the Company
“Group”	the Company and all of its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s Republic
	of China
“Latest Practicable Date”	27 April 2005, being the latest practicable date prior to the printing of
	this circular for the purpose of ascertaining certain information contained
	in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Repurchase Mandate”	the repurchase mandate proposed to be granted to the Directors at the
	AGM to repurchase up to 10% of the issued share capital of the Company
“SFO”	the Securities and Futures Ordinance (Chapter 571 of Laws of Hong
	Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the Company

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DEFINITIONS

“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“%”	per cent.

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LETTER FROM THE BOARD

WAH YUEN HOLDINGS LIMITED 華 園 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2349)

Executive Directors: Mr But Ching Pui (Honorary Chairman) Mr But Ka Wai (Chairman) Mr But Chai Tong (Vice Chairman) Mr Lai Wing Kuen Mr Chu Kin Wah

Non-executive Directors: Ms Leung Wai Ling Mr Ngai Chun Kong, Stephen

Independent non-executive Directors: Mr Cheung Yu Yan, Tommy Mr Ip Shing Tong, Francis Mr Ku Siu Fung, Stephen

Registered office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681 GT George Town Grand Cayman British West Indies

Head office and principal place of business in Hong Kong: 2nd Floor On Shing Industrial Building Nos. 2-16 Wo Liu Hang Road Fo Tan, Shatin New Territories Hong Kong

28 April 2005

To the shareholders

Dear Sir or Madam

(1) PROPOSED GRANT OF GENERAL MANDATES TO ISSUE NEW SHARES AND REPURCHASE BY THE COMPANY OF ITS OWN SHARES; AND (2) PROPOSED RE-ELECTION OF DIRECTORS

INTRODUCTION

At the AGM to be held at 2nd Floor, On Shing Industrial Building, Nos. 2-16 Wo Liu Hang Road, Fo Tan, Shatin, New Territories, Hong Kong on Tuesday, 7 June 2005 at 9:30 a.m., resolutions will be proposed:

• (a) to re-elect the Directors;

• (b) to grant the General Mandate to the Directors;

• (c) to grant the Repurchase Mandate to the Directors; and

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LETTER FROM THE BOARD

• (d) to increase the number of Shares to be allotted and issued under the General Mandate by an additional number representing such number of Shares repurchased under the Repurchase Mandate.

The purpose of this circular is to provide you with information in relation to the resolutions to be proposed at the AGM for the grant of the General Mandate and the Repurchase Mandate and the reelection of Directors.

GENERAL MANDATE AND REPURCHASE MANDATE

The General Mandate and the Repurchase Mandate shall be effective until whichever is the earliest

of:

• (a) the conclusion of the next annual general meeting of the Company; or

• (b) the expiration of the period within which the next annual general meeting of the Company is required by the Articles of Association, or any other applicable law of the Cayman Islands to be held; or

• (c) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying the authority given to the Directors.

Under the Listing Rules, the Company is required to give to the Shareholders all information which is reasonably necessary to enable Shareholders to make an informed decision as to whether to vote for or against the resolution to renew the grant to the Directors of the Repurchase Mandate. The explanatory statement required by the Listing Rules to be included in this circular is set out in Appendix I.

General Mandate

The Company has in issue an aggregate of 200,000,000 Shares as at 27 April 2005, being the Latest Practicable Date. Subject to the passing of the proposed resolution for the approval of the General Mandate and in accordance with the terms therein, the Company would be allowed to allot and issue up to a maximum of 40,000,000 Shares, representing 20% of the aggregate nominal amount of the issued Shares at the time of the passing of the resolution approving the General Mandate on the basis that no further Shares will be issued or repurchased by the Company prior to the AGM.

The Directors have no immediate plans to issue any new Shares other than Shares which may fall to be issued under the share option scheme providing for the allotment and issue of Shares in lieu of whole or part of a dividend in accordance with the Articles of Association or any scrip dividend scheme which may be approved by the Shareholders.

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LETTER FROM THE BOARD

Repurchase Mandate

On pages 66 to 70 of the annual report of the Company in respect of the financial year ended 31 December 2004 is the notice of the AGM. At the AGM, and as part of the special business of the AGM, an ordinary resolution will be proposed to grant the Repurchase Mandate to the Directors.

RE-ELECTION OF DIRECTORS

According to Article 108, one-third of the Directors for the time being, or, if their number is not three or a multiple of three, then the number nearest to but not exceeding one-third, shall retire from office by rotation at every annual general meeting of the Company. A retiring Director shall be eligible for re-election.

In accordance with Article 108, Mr. Lai Wing Kuen and Mr. Ip Shing Tong, Francis shall retire from office by rotation at the AGM. Mr. Ip Shing Tong, Francis will offer himself for re-election as independent non-executive Director. At the AGM, an ordinary resolution will be proposed to re-elect Mr. Ip Shing Tong, Francis as independent non-executive Director.

Particulars relating to Mr. Ip Shing Tong, Francis are set out in Appendix III to this circular.

ACTION TO BE TAKEN

Whether or not you intend to attend the AGM, you are requested to complete and return the form of proxy accompanying the annual report of the Company in accordance with the instructions printed thereon not less than 48 hours before the time appointed for holding the AGM. The completion and return of a form of proxy will not preclude you from attending and voting at the AGM and adjournment thereof in person if you so wish.

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Directors believe that the proposed grant of the General Mandate and the Repurchase Mandate and the proposed re-election of Directors are in the best interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the above resolutions to be proposed at the AGM.

The Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets value of the Company and its net assets and/or earnings per Share and will only be made when the Directors believe that a repurchase of Shares will benefit the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

An exercise of the Repurchase Mandate in full could have a material adverse impact on the working capital and gearing position of the Company compared with that as at 31 December 2004, being the date of its latest published audited consolidated accounts. The Directors do not, however, intend to make any repurchase in circumstances that would have a material adverse impact on the working capital or gearing position of the Company.

The Directors believe that an exercise of the General Mandate to allot and issue new Shares will enable the Company to take advantage of market conditions to raise additional capital for the Company.

Yours faithfully For and on behalf of the board of Directors of Wah Yuen Holdings Limited But Ka Wai Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to you for your consideration of the Repurchase Mandate.

1. Repurchase of securities from connected parties

The Listing Rules prohibit a company from knowingly purchasing securities on the Stock Exchange from a “connected person”, that is, a director, chief executive or substantial shareholder of the Company or any of its subsidiaries or their respective associates (as defined in the Listing Rules) and a connected person is prohibited from knowingly selling his/her/its securities to the Company.

No connected person of the Company has notified the Company that he/she/it has a present intention to sell any Shares to the Company nor has any such connected person undertaken not to sell any of the Shares held by him/her/it to the Company in the event that the Repurchase Mandate is passed.

2. Share capital

As at the Latest Practicable Date, the issued share capital of the Company comprised 200,000,000 fully paid Shares.

Subject to the passing of the proposed resolution for the approval of the Repurchase Mandate and on the basis that no further Shares are issued or repurchased by the Company prior to the AGM, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 20,000,000 fully paid Shares.

3. Reasons for the repurchase

The Directors believe that the Repurchase Mandate is in the best interests of the Company and its shareholders as a whole. An exercise of the Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets per Share and/or earnings per Share and will only be made when the Directors believe that a repurchase will benefit the Company and its shareholders as a whole.

4. Funding of repurchases

Pursuant to the Repurchase Mandate, repurchases would be funded entirely from the Company’s available cash flow or working capital facilities which will be funds legally available under the Cayman Islands law and the memorandum and articles of association of the Company for such purpose.

An exercise of the Repurchase Mandate in full could have a material adverse impact on the working capital and gearing position of the Company compared with that as at 31 December 2004, being the date of its latest published audited consolidated accounts. The Directors do not, however, intend to make any repurchase in circumstances that would have a material adverse impact on the working capital or gearing position of the Company.

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EXPLANATORY STATEMENT

APPENDIX I

5. Share prices

The highest and lowest prices at which the Shares have traded on the Stock Exchange in each of the previous twelve calendar months were as follows:

	Highest	Lowest
	HK$	HK$
2004
April	0.63	0.485
May	0.69	0.50
June	0.62	0.48
July	0.51	0.46
August	0.50	0.44
September	0.56	0.41
October	0.445	0.375
November	0.39	0.345
December	0.425	0.295
2005
January	0.33	0.285
February	0.365	0.30
March	0.42	0.325
April (up to the Latest Practicable Date)	0.38	0.31

6. Disclosure of interests and minimum public holding

None of the Directors or, to the best of their knowledge having made all reasonable enquiries, their associates, have any present intention to sell to the Company or its subsidiaries any of the Shares in the Company if the Repurchase Mandate is approved at the AGM and exercised.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the Listing Rules and applicable laws of the Cayman Islands.

If a shareholder’s proportionate interest in the voting rights of the Company increases on the Company exercising its powers to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of Rule 32 of the Takeovers Code. As a result, a shareholder or group of shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX I

As at the Latest Practicable Date, the following Shareholders are interested in more than 10% of the Shares then in issue:

Name	Number of Shares	Percentage holding
Able Success Group Limited_(Note 1)_	60,500,000	30.25%
Mr. But Ka Wai_(Note 1)_	60,500,000	30.25%
Ms. Chan Yuk Ha_(Note 1)_	60,500,000	30.25%
National Chain International Limited
(Note 2)	57,000,000	28.50%
Mr. But Chai Tong_(Note 2)_	57,000,000	28.50%
Ms. Chang Tei Wah, Teresa_(Note 2)_	57,000,000	28.50%

Notes:

1. These 60,500,000 Shares are owned by Able Success Group Limited and the entire issued share capital of which is directly held by Mr. But Ka Wai. Ms. Chan Yul Ha is the wife of Mr. But Ka Wai and is deemed to be interested in the Shares in which Mr. But Ka Wai is interested under the provisions of Divisions 2 and 3 of Part XV of the SFO.

2. These 57,000,000 Shares are owned by National Chain International Limited and the entire issued share capital of which is directly held by Mr. But Chai Tong. Ms. Chang Tei Wah, Teresa is the wife of Mr. But Chai Tong and is deemed to be interested in the Shares in which Mr. But Chai Tong is interested under the provisions of Divisions 2 and 3 of Part XV of the SFO.

In the event that the Directors exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate, the total interests of the above Shareholders in the Shares would be increased to:

Name	Percentage holding
Able Success Group Limited	33.61%
Mr. But Ka Wai	33.61%
Ms. Chan Yuk Ha	33.61%
National Chain International Limited	31.66%
Mr. But Chai Tong	31.66%
Ms. Chang Tei Wah, Teresa	31.66%

The Directors are not aware of any consequences which may arise under the Takeover Code as consequences of any purchase made under the Repurchase Mandate. However, the Company may not repurchase Shares which would result in the amount of Shares held by the public being reduced to less than 25%.

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EXPLANATORY STATEMENT

APPENDIX I

On the basis of the current shareholding of Able Success Group Limited, Mr. But Ka Wai, Ms. Chan Yuk Ha, National Chain International Limited, Mr. But Chai Tong and Ms. Chang Tei Wah, Teresa, an exercise of the Repurchase Mandate in full will result in them becoming obliged to make a mandatory offer under Rule 26 of the Takeovers Code.

The Directors have no intention to exercise any of the Repurchase Mandate to such an extent that will result in a requirement of Able Success Group Limited, Mr. But Ka Wai, Ms. Chan Yuk Ha, National Chain International Limited, Mr. But Chai Tong and Ms. Chang Tei Wah, Teresa to make a mandatory offer under the Takeovers Code.

7. Shares repurchase made by the Company

No repurchases of Shares have been made by the Company (whether on the Stock Exchange or otherwise) during the six months immediately prior to the Latest Practicable Date.

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APPENDIX II PROCEDURES BY WHICH SHAREHOLDERS MAY DEMAND A POLL AT GENERAL MEETING PURSUANT TO THE ARTICLES OF ASSOCIATION

The procedures by which the Shareholders may demand a poll at the AGM are set out in this Appendix.

According to Article 72, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded. A poll may be demanded by:

• (a) the chairman of the meeting; or

• (b) at least three Shareholders present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy for the time being entitled to vote at the meeting; or

• (c) any Shareholder or Shareholders present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

• (d) any Shareholder or Shareholders present in person (or, in the case of a Shareholder being a corporation, by its duly authorised representative) or by proxy and holding shares in the Company 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.

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX III

The details of the Director who will retire from office by rotation at the AGM and being eligible, will offer himself for re-election at the AGM, are set out below:

Mr. Ip Shing Tong, Francis, aged 60, is an independent non-executive Director. Mr. Ip served in the Government of Hong Kong from 1963 to 2001, and retired from the position of Superintendent of Environment Health of the Food and Environmental Hygiene Department of the Government of Hong Kong in 2001. He has over 30 years of work experience in the environmental hygiene area. He joined the Group in May 2003 and was appointed as an independent non-executive Director and the audit committee member of the Company. Mr. Ip has entered into a service agreement with the Company for a term of two years commencing 1 June 2003 with an amount of emoluments for HK$50,000 per annum, which is determined by the Board with reference to his duties and responsibility but is not entitled to any bonus payments. Mr. Ip does not hold any position in other listed company in the last three years. He does not have any relationship with any other Directors, senior management of the Company, substantial Shareholders or controlling Shareholders. In accordance with the meaning of Part XV of the SFO, Mr. Ip does not have, and is not deemed to have, any interests or short positions in any shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO).

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