China Railway Group Limited — Proxy Solicitation & Information Statement 2008

May 8, 2008

IMPORTANT

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

If you have sold or transferred all your shares in China Railway Group Limited, you should at once hand this circular to the purchaser or other transferee 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.

==> picture [50 x 50] intentionally omitted <==

中國中鐵股份有限公司

CHINA RAILWAY GROUP LIMITED

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

(Stock Code: 390)

DISCLOSEABLE TRANSACTION

INVESTMENT IN SOCIETE PAR ACTIONS A RESPONSABILITE LIMITEE

9 May 2008

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

– i –

DEFINITIONS

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

‘‘Articles of Association’’ the articles of association of the Joint Venture Company dated 22 April 2008

• ‘‘Board’’ the board of Directors

‘‘Chinese Consortium’’ collectively, CRHK, CR Sino-Congo, CR Resources, Sinohydro International and Sinohydro Harbour

‘‘Company’’ China Railway Group Limited, a joint stock limited company incorporated in the PRC with limited liability and whose ordinary shares are listed on the Main Board of the Hong Kong Stock Exchange and the Shanghai Stock Exchange

• ‘‘Congo’’ the Republic of Congo

• ‘‘Congo Investors’’ collectively, Congo Mining and Mr. Gilbert Kalamba Banika ‘‘Congo Mining’’ La Sino-Congolaise des Mines (剛果礦業總公司), a state-owned company established under the laws of Congo

• ‘‘Cooperation Agreement’’ the agreement entered into on 22 April 2008 (after trading hours) between Sinohydro and the Government of the Congo in relation to the cooperation project in mining development and facilities construction in the Congo

• ‘‘CRHK’’ China Railway Group (Hong Kong) Limited (中國中鐵(香港)有 限公司), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• ‘‘CR Investors’’ collectively, CRHK, CR Sino-Congo and CR Resources

• ‘‘CR Resources’’ China Railway Resources Development Limited (中國中鐵資源開 發股份有限公司), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• ‘‘CR Sino-Congo’’ China Railway Sino-Congo Mining Limited (中國中鐵華剛礦業 股份有限公司), a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of the Company

• ‘‘Directors’’ the directors of the Company

• ‘‘Feasibility Report’’ a feasibility report prepared by a professional institution engaged by the Joint Venture Company pursuant to the Joint Venture Agreement

• ‘‘Group’’ the Company together with its subsidiaries

– 1 –

DEFINITIONS

• ‘‘HK$’’

• ‘‘Hong Kong’’

• ‘‘Hong Kong Stock Exchange’’

• ‘‘Joint Venture Agreement’’

• ‘‘Joint Venture Company’’

• ‘‘Latest Practicable Date’’

• ‘‘Listing Rules’’

• ‘‘PRC’’

• ‘‘Relevant Mining Rights’’

• ‘‘SFO’’

• ‘‘Sinohydro’’

• ‘‘Sinohydro Harbour’’

• ‘‘Sinohydro International’’

• ‘‘Sinohydro Investors’’

• ‘‘Shareholders’’

Hong Kong dollars, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the PRC

The Stock Exchange of Hong Kong Limited

the agreement entered into on 22 April 2008 (after trading hours) among the Chinese Consortium and the Congo Investors in relation to the establishment of the Joint Venture Company

• a joint stock limited company to be named Societe par Actions a Responsabilite Limitee (華剛礦業股份有限公司), to be established under the laws of the Congo pursuant to the Joint Venture Agreement

• 7 May 2008, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• the People’s Republic of China

• the mining rights and relevant licences owned by Congo Mining in relation to the Cuvette Dima, Dikuluwe, Jonction Dima, Mashamba Quest, Cuvette Mashamba et Synclinal Dikuluwe Colline D mines in Congo

• the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

• Sinohydro Corporation Limited (中國水利水電建設集團公司), a state-owned enterprise established under the laws of the PRC

• Sinohydro Harbour Co., Ltd. (中國水電建設集團港航建設有限公 司), a limited liability company established under the laws of the PRC and a subsidiary of Sinohydro

• Sinohydro International Engineering Co., Ltd. (中國水電建設集 團國際工程有限公司), a limited liability company established under the laws of the PRC and a subsidiary of Sinohydro

collectively, Sinohydro International and Sinohydro Harbour

the shareholders of the Company

– 2 –

DEFINITIONS

‘‘US$’’ United States dollars, the lawful currency of the United States of America ‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

==> picture [50 x 50] intentionally omitted <==

中國中鐵股份有限公司

CHINA RAILWAY GROUP LIMITED

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

(Stock Code: 390)

Executive Directors: Mr. SHI Dahua (Chairman) Mr. LI Changjin Mr. BAI Zhongren

Registered Office: No.1 Xinghuo Road Fengtai District Beijing, the PRC

Non-executive Director: Mr. WANG Qiuming

Independent non-executive Directors:

Mr. HE Gong Mr. ZHANG Qinglin Mr. WANG Taiwen Mr. GONG Huazhang Mr. SUN Patrick

Principal place of business in Hong Kong: Unit 1201–1203 12/F, APEC Plaza 49 Hoi Yuen Road, Kwun Tong Kowloon Hong Kong

9 May 2008

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INVESTMENT IN SOCIETE PAR ACTIONS A RESPONSABILITE LIMITEE

INTRODUCTION

On 22 April 2008 (after trading hours), the Board announced that the Company, Sinohydro and the Government of Congo entered into the Cooperation Agreement. On 22 April 2008 (after trading hours), pursuant to the Cooperation Agreement, CRHK, CR Sino-Congo and CR Resources, all being whollyowned subsidiaries of the Company, and Sinohydro International, Sinohydro Harbour, Congo Mining and Mr. Gilbert Kalamba Banika entered into the Joint Venture Agreement for the establishment of the Joint Venture Company, Societe par Actions a Responsabilite Limitee, and adopted the Articles of Association of the Joint Venture Company.

Pursuant to the Joint Venture Agreement, the Chinese Consortium and the Congo Investors agreed to establish a joint stock limited company under the laws of Congo, to be named Societe par Actions a Responsabilite Limitee. The registered capital of the Joint Venture Company will be US$100 million

– 4 –

LETTER FROM THE BOARD

(equivalent to approximately HK$779 million) comprising 100,000 shares of nominal value of US$1,000 (equivalent to approximately HK$7,795) each. Pursuant to the Joint Venture Agreement, the CR Investors agreed to subscribe for a total of 43,000 shares in the Joint Venture Company at a total consideration of US$43,000,000 (equivalent to approximately HK$335,165,220), representing 43% interest in the Joint Venture Company; the Sinohydro Investors agreed to subscribe for a total of 25,000 shares in the Joint Venture Company at a total consideration of US$25,000,000 (equivalent to approximately HK$194,863,500), representing 25% interest in the Joint Venture Company; and the Congo Investors agreed to subscribe for a total of 32,000 shares in the Joint Venture Company at a total consideration of US$32,000,000 (equivalent to approximately HK$249,425,280), representing 32% interest in the Joint Venture Company. The CR Investors and the Sinohydro Investors shall provide a loan of approximately US$20.22 million (equivalent to approximately HK$157.61 million) and US$11.78 million (equivalent to approximately HK$91.82 million), respectively, to the Congo Investors for the settlement of their capital contribution to the Joint Venture Company.

On 22 April 2008 (after trading hours), the Chinese Consortium and the Congo Investors adopted the Articles of Association of the Joint Venture Company to govern their respective rights and obligations in relation to the operation and management of the Joint Venture Company.

The Company, Sinohydro and the Government of Congo also entered into the Cooperation Agreement, which sets out the framework and rules for the establishment and financing of the Joint Venture Company, as well as the financing of certain infrastructure projects in Congo.

Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the investments and capital commitments under the Joint Venture Agreement and the Cooperation Agreement, in aggregate, exceed 5% (but not more than 25%), the investments and capital commitments under the Joint Venture Agreement and the Cooperation Agreement constitute a discloseable transaction of the Company under Rule 14.06 of the Listing Rules.

The purpose of this circular is to (i) provide Shareholders with further information relating to the Joint Venture Agreement and the Cooperation Agreement and the transactions contemplated thereunder, as well as the Articles of Association of the Joint Venture Company and (ii) give Shareholders other information in accordance with the requirements under the Listing Rules.

– 5 –

LETTER FROM THE BOARD

THE JOINT VENTURE AGREEMENT

Date: 22 April 2008

Parties and their respective shareholdings:

Shareholders of the Joint Venture Company CRHK CR Sino-Congo CR Resources CR Investors Total Sinohydro International Sinohydro Harbour Sinohydro Investors Total Congo Mining Mr. Gilbert Kalamba Banika Congo Investors Total Grand total	Capital contribution (US$) 20,000,000 9,900,000 13,100,000 43,000,000 20,000,000 5,000,000 25,000,000 20,000,000 12,000,000 32,000,000 100,000,000	Percentage of shareholding 20.0% 9.9% 13.1%
		43.0%
		20.0% 5.0%
		25.0%
		20.0% 12.0%
		32.0%
		100.0%

The CR Investors are, in aggregate, acquiring 43% of the equity interests in the Joint Venture Company. The Company will adopt equity accounting to account for such investments in the Group’s financial statements upon establishment of the Joint Venture Company.

Sinohydro International is a limited liability company established under the laws of the PRC. Its scope of business includes the contracting of domestic and overseas construction projects as well as international bidding process; export of equipment and materials to overseas construction projects, secondment of labour for overseas construction projects; contracting of and investing in water conservancy and hydropower, as well as electronic, highway, ports, flight paths, airports, housing and public facilities and transportation facilities, construction projects and the provision of related surveying, design, implementation, consultancy, supervisory and technology development services; supply, installation, sales and leasing of machinery and equipment for the above construction projects, as well as the development, production and sales of construction materials; and property management.

Sinohydro Harbour is a limited liability company established under the laws of the PRC. Its scope of business includes investment, design, operation, implementation and construction of certain ports and flight paths projects.

Congo Mining is a state-owned company established under the laws of Congo. Its principal activity is the investment in mineral resources business.

– 6 –

LETTER FROM THE BOARD

Mr. Gilbert Kalamba Banika is a natural person whose nationality is Congolese.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, each of Sinohydro International, Sinohydro Harbour, Congo Mining, together with its ultimate beneficial owner, and Mr. Gilbert Kalamba Banika are not connected persons (as defined in the Listing Rules) of the Company and are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company. The Group had no prior relationship or transactions with each of Sinohydro International, Sinohydro Harbour, Congo Mining and their respective ultimate beneficial owners, and Mr. Gilbert Kalamba Banika that require aggregation under Rule 14.22 of the Listing Rules.

Transfer of the Relevant Mining Rights

Pursuant to the Cooperation Agreement and the Joint Venture Agreement, Congo Mining shall transfer the Relevant Mining Rights regarding copper and cobalt mines in Congo to the Joint Venture Company. Based on the analysis contained in a preliminary feasibility report, the preliminary proven copper reserves at such mines is approximately 6.8 million tonnes with copper grade of 3.3%, and the preliminary proven reserves of cobalt is approximately 420,000 tonnes with cobalt grade of 0.24%. Pursuant to the Cooperation Agreement, the Government of Congo warranted the above transfer to the Joint Venture Company and that the copper and related cobalt reserves pursuant to the Relevant Mining Rights shall be no less than 10 million tonnes. Based on a valuation report regarding the Relevant Mining Rights prepared by Beijing Shan Hai Tian Valuation and Consulting Company (北京山海天評估 諮詢公司), the value of the Relevant Mining Rights as at 31 December 2007, the valuation date, was approximately US$1.9 billion (equivalent to approximately HK$14.809 billion).

Contribution of share subscription price

The CR Investors shall pay the subscription price of US$43,000,000 (equivalent to approximately HK$335,165,220) in US$ by way of cash, representing 43% of the registered capital of the Joint Venture Company. The funds required for the subscription price shall be financed using internal cash resources of the Group. The Sinohydro Investors shall pay the subscription price of US$25,000,000 (equivalent to approximately HK$194,863,500) in US$ by way of cash, representing 25% of the registered capital of the Joint Venture Company. The Congo Investors shall pay the subscription price of US$32,000,000 (equivalent to approximately HK$249,425,280) in US$ by way of cash, representing 32% of the registered capital of the Joint Venture Company.

The CR Investors and the Sinohydro Investors shall provide a loan of approximately US$20.22 million (equivalent to approximately HK$157.61 million) and US$11.78 million (equivalent to approximately HK$91.82 million), respectively, to the Congo Investors for the settlement of their capital contribution to the Joint Venture Company (see ‘‘Other capital commitment’’ section below).

The subscription price is determined based on arm’s length negotiations among the parties to the Joint Venture Agreement, and having taken into consideration factors such as the business prospects of the Joint Venture Company and its assets base, the parties concluded that the registered capital of the Joint Venture Company shall be US$100 million (equivalent to approximately HK$779 million). The full subscription price will be injected into the Joint Venture Company. Save for the said capital contribution, the Company has other capital commitment to the Joint Venture Company, the Government of Congo and the Congo Investors. Details of such commitment are set out below in this circular.

– 7 –

LETTER FROM THE BOARD

Time of payment

Each of the parties to the Joint Venture Agreement shall settle 50% of its capital contribution to the Joint Venture Company upon its establishment, of which the CR Investors shall settle US$21.50 million (equivalent to approximately HK$167.58 million), the Sinohydro Investors shall settle US$12.50 million (equivalent to approximately HK$97.43 million) and the Congo Investors shall settle US$16.00 million (equivalent to approximately HK$124.71 million). The remaining balance of the capital contribution shall be settled by the parties to the Joint Venture Agreement in accordance with their respective percentage of shareholding in the Joint Venture Company within two (2) months from the date the Feasibility Report is approved by the Government of Congo and the PRC Government.

Other capital commitment

. Loan to be provided to the Congo Investors

The Chinese Consortium shall provide an unsecured loan of US$32 million (equivalent to approximately HK$249.43 million) to the Congo Investors for the settlement of their capital contribution to the Joint Venture Company, of which the CR Investors shall provide approximately US$20.22 million (equivalent to approximately HK$157.61 million) and the Sinohydro Investors shall provide approximately US$11.78 million (equivalent to approximately HK$91.82 million). The Congo Investors shall pay interest at an annual interest rate equivalent to the 6-months LIBOR rate plus 100 basis points.

If the Joint Venture Company decided to increase its registered capital, the Chinese Consortium is obliged to provide the required financing to the Congo Investors in order to maintain their respective proportion of capital contribution, of which approximately 63.2% shall be provided by the CR Investors and the remaining approximately 36.8% shall be provided by the Sinohydro Investors. The Congo Investors shall pay interest at an annual interest rate equivalent to the 6-months LIBOR rate plus 100 basis points. The parties to the Joint Venture Agreement currently do not have any intention to increase the registered capital of the Joint Venture Company.

. Entry fee

Subject to the conditions that (1) Congo Mining shall transfer the Relevant Mining Rights to the Joint Venture Company, (2) the Relevant Mining Rights are proved to be free from encumbrances, and (3) the preliminary feasibility report in relation to the transaction being approved by the PRC Government, the Chinese Consortium shall pay an entry fee of US$350 million (equivalent to approximately HK$2,728 million) to the Government of Congo and Congo Mining, of which the CR Investors shall pay approximately US$221 million (equivalent to approximately HK$1,723 million) and the Sinohydro Investors shall pay approximately US$129 million (equivalent to approximately HK$1,006 million). The Chinese Consortium shall pay such entry fee within 10 business days from the date of satisfaction of the above conditions.

– 8 –

LETTER FROM THE BOARD

. Loan to be provided to Congo Mining

The Chinese Consortium shall provide an unsecured loan of US$50 million (equivalent to approximately HK$389.73 million) to Congo Mining for the purchase of certain equipment and facilities by Congo Mining, of which the CR Investors shall provide approximately US$31.60 million (equivalent to approximately HK$246.31 million) and the Sinohydro Investors shall provide approximately US$18.40 million (equivalent to approximately HK$143.42 million). No interest will be charged on such loan by the Chinese Consortium.

. Loan and financing to be provided to the Joint Venture Company

The Chinese Consortium shall provide an unsecured shareholders’ loans and assist in arranging financing to the Joint Venture Company for the construction of mining facilities. The total amount of loans and financing shall be determined with reference to needs of the Joint Venture Company as demonstrated in the Feasibility Report. Based on the preliminary research performed by China EnFi Nonferrous Engineering Co., Ltd., a professional institution engaged by the Company, the Chinese Consortium shall provide shareholders’ loans and assist in arranging financing of approximately US$2,900 million (equivalent to approximately HK$22,604 million), of which the CR Investors shall be responsible for approximately US$1,833 million (equivalent to approximately HK$14,287 million) and the Sinohydro Investors shall be responsible for approximately US$1,067 million (equivalent to approximately HK$8,317 million). Out of the approximately US$1,833 million (equivalent to approximately HK$14,287 million) loan and financing to be provided by the CR Investors, approximately US$550 million (equivalent to approximately HK$4,287 million) shall be interest-free loan and the remaining balance of approximately US$1,283 million (equivalent to approximately HK$10,000 million) shall be financing subject to an annual interest rate of 6.1%. Out of the approximately US$1,067 million (equivalent to approximately HK$8,317 million) loan and financing to be provided by the Sinohydro Investors, approximately US$320 million (equivalent to approximately HK$2,494 million) shall be interest-free loan and the remaining balance of approximately US$747 million (equivalent to approximately HK$5,823 million) shall be financing subject to an annual interest rate of 6.1%.

Based on the Joint Venture Agreement and the Cooperation Agreement, the total capital commitment amount to be borne by the Group amounted to US$4,044,820,000 (equivalent to approximately HK$31,527,511,282), which comprised (i) the share subscription price to be paid by the CR Investors, (ii) the entry fee to be paid by the CR Investors and the loans and financing to be provided to the Congo Investors, Congo Mining and the Joint Venture Company by the CR Investors as stated in this ‘‘Other capital commitment’’ section above, and (iii) the financing for the construction of infrastructure facilities to be provided to the Joint Venture Company by the Company as stated in the ‘‘Construction of infrastructure facilities’’ section below.

– 9 –

LETTER FROM THE BOARD

The repayment of the loans and financing provided by the Chinese Consortium

• . First stage of repayment (‘‘First Stage’’)

Upon the Joint Venture Company generating profits from the commencement of its operations, all such profits earned shall be used to repay the shareholders’ loan and financing, together with interests, provided to the Joint Venture Company of approximately US$2,900 million (equivalent to approximately HK$22,604 million).

• . Second stage of the repayment (‘‘Second Stage’’)

Upon full repayment of the loans, financing and interests in the First Stage as detailed above, the Joint Venture Company shall commence the Second Stage of repayment.

The Joint Venture Company shall use its profits attributable to the Congo Investors, representing approximately 2.7% of the total profits generated by the Joint Venture Company, in the Second Stage to repay the US$32 million (equivalent to approximately HK$249.43 million) loan plus interests provided by the Chinese Consortium to the Congo Investors and such loan plus interests provided by the Chinese Consortium to the Congo Investors upon an increase in the registered capital of the Joint Venture Company (see ‘‘Other capital commitment’’ section above).

The Joint Venture Company shall use its profits attributable to the Congo Investors, representing approximately 4.3% of the total profits generated by the Joint Venture Company, in the Second Stage to repay the US$50 million (equivalent to approximately HK$389.73 million) loan provided by the Chinese Consortium to Congo Mining (see ‘‘Other capital commitment’’ section above).

Conditions to the Joint Venture Agreement

The Joint Venture Agreement shall be effective upon the satisfaction of the following conditions:

• (i) the signing of the Cooperation Agreement; and

• (ii) the Cooperation Agreement having been approved by the relevant government authority of Congo and the PRC.

There is no long stop date set for the establishment of the Joint Venture Company.

Termination of the Joint Venture Agreement

Pursuant to the Joint Venture Agreement, if the Feasibility Report has not been approved by the Government of Congo and the PRC Government, the Joint Venture Agreement will be automatically terminated. Upon such termination, the Joint Venture Company shall be wound up and liquidated pursuant to its Articles of Association of the Joint Venture Company and the laws of Congo and the Relevant Mining Rights shall be returned to Congo Mining and the entry fee shall be refunded to the Chinese Consortium in full.

– 10 –

LETTER FROM THE BOARD

THE ARTICLES OF ASSOCIATION

On 22 April 2008 (after trading hours), the parties of the Joint Venture Agreement adopted the Articles of Association of the Joint Venture Company to govern their respective rights and obligations in relation to the operation and management of the Joint Venture Company.

Principal provisions of the Articles of Association

• Scope of business of the Joint Venture Company:

The scope of business of the Joint Venture Company includes the examination, surveyance, research and development, refinement, chemical metallurgical process, further processing and trading of valuable minerals and the refinement, chemical, processing, as well as similar and related operations.

Registered capital:

The registered capital of the Joint Venture Company is US$100 million, which will be contributed as to 20%, 9.9%, 13.1%, 20%, 5%, 20% and 12% by CRHK, CR Sino-Congo, CR Resources, Sinohydro International, Sinohydro Harbour, Congo Mining and Mr. Gilbert Kalamba Banika, respectively.

• Shareholders of the Joint Venture Company:

• Shareholders of the Joint Venture Company can be segregated into two categories, being the Congo Investors as the shareholders of its A-shares and the Chinese Consortium as the shareholders of its B-shares. Upon an increase in capital of the Joint Venture Company, the shares held by the A-share shareholders shall automatically be converted into the relevant number of ordinary shares such that the aggregate shareholding of the A-share shareholders shall be maintained at 32%. Upon an increase in capital of the Joint Venture Company, the B-share shareholders shall provide the agreed loans to the A-share shareholders pursuant to the Joint Venture Agreement for the purpose of settlement of the capital contribution to be made by the A-share shareholders.

• Board of directors of the Joint Venture Company:

• The board of directors of the Joint Venture Company shall comprise seven directors. The Chinese Consortium shall have the right to nominate and appoint five directors, of which, no more than three directors shall be nominated or appointed by the CR Investors, and the Congo Investors shall have the right to nominate and appoint two directors.

• Term of the Joint Venture Company:

• The Joint Venture Company is a joint stock limited company in perpetual existence.

• First right of subscription:

Upon an increase in capital of the Joint Venture Company, its shareholders shall have the first right of subscription, in proportion to its then shareholdings, to subscribe for the newly issued shares as at the date of issuance.

– 11 –

LETTER FROM THE BOARD

First right of offer:

The board of directors of the Joint Venture Company shall be notified in advance for any change of control in the Joint Venture Company and shall be subject to the approval in a shareholders’ meeting of the Joint Venture Company. If the above procedures have not been complied with or should the proposal be rejected in its shareholders’ meeting, the other shareholders of the Joint Venture Company shall have the right to purchase the shares held by the shareholder initiating such change of control. The shareholders within the same category shall be entitled to the same right of offer.

COOPERATION AGREEMENT

On 22 April 2008 (after trading hours), the Company, Sinohydro and the Government of Congo entered into the Cooperation Agreement, which sets out the framework and rules for the establishment and financing of the Joint Venture Company, as well as the financing of certain infrastructure projects in Congo.

Sinohydro is a state-owned enterprise established under the laws of the PRC. Its scope of business includes contracting and implementation of water conservancy and hydropower projects, various civil engineering projects, urban projects and marine works, as well as the production and installation of construction metal structures.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, Sinohydro, together with its ultimate beneficial owner, and the Government of Congo are not connected persons (as defined in the Listing Rules) of the Company and are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company.

Terms in relation to the Joint Venture Company

Each of the parties of the Cooperation Agreement agreed to nominate such company(ies) or person(s) to make the capital contribution to the Joint Venture Company. Details of the terms regarding the establishment of the Joint Venture Company, the transfer of the Relevant Mining Rights and financing of the construction of mining facilities and equipment are set out in the Joint Venture Agreement. For details, please refer to the ‘‘The Joint Venture Agreement’’ section above in this circular.

Pursuant to the Cooperation Agreement, the Government of Congo undertook to grant tax relief in relation to certain taxes including customs, import and export tax, and foreign exchange tax to the Joint Venture Company during the First Stage and the Second Stage.

Construction of infrastructure facilities

The exploitation of the copper and cobalt mines will lead to substantial demands in public utilities such as electricity and infrastructure facilities for the purpose of transportation. Pursuant to the Cooperation Agreement, the Company and Sinohydro shall provide financing for the construction project of certain infrastructure facilities in Congo. Such construction project covers the construction of urban

– 12 –

LETTER FROM THE BOARD

facilities such as roads, hospitals, power plant and schools. The amount required for such financing shall be determined with reference to the operating results of the Joint Venture Company, of which, the Company is required to provide approximately 63.2% of such financing. There shall be a two-phase implementation of such construction of infrastructure facilities.

First phase of the construction of infrastructure facilities

The Company and Sinohydro shall provide an unsecured financing of no more than US$3,000 million (equivalent to approximately HK$23,384 million) for the first phase of the construction of infrastructure facilities project, together with interests (the annual interest rate is equivalent to the 6- months LIBOR rate plus 100 basis points). Such financing, together with interests, shall be repaid by the Joint Venture Company by utilising 66% of the profits generated from the Second Stage.

Second phase of the construction of infrastructure facilities

Upon completion of the Second Stage, the Joint Venture Company shall repay the amount financed by the Company and Sinohydro in relation to the second phase of the construction of infrastructure facilities, together with interest (the annual interest rate is equivalent to the 6-months LIBOR rate plus 100 basis points), by utilising the tax and customs payments that should have been paid to but were relieved by the Government of Congo.

The Government of Congo agreed to grant the Company and Sinohydro, or such companies nominated by the Company and/or Sinohydro, the contracting rights for the first phase and the second phase of the construction of infrastructure facilities. A separate contractors and construction agreement will be entered into to govern the construction of infrastructure facilities.

REASONS FOR THE TRANSACTION

The Group is primarily engaged in the infrastructure construction, survey, design and consulting services, engineering equipment and component manufacturing and property development businesses and other businesses, which includes mining operations and others.

The Directors are of the view that the transactions contemplated under the Joint Venture Agreement and the Cooperation Agreement are in line with the Group’s strategy, which is to continuously opt and explore for new overseas development opportunities. In terms of regional development, the Group has always focused on business development in African countries where natural resources are abundant and there is robust market demand. In 2006, the Government of Congo proposed the ‘‘capitalisation of resources in support of the construction of infrastructure facilities’’ policy. Due to the promotion of this policy, together with the Company’s competitiveness over its self-developed construction technology, the Company formalised specific development strategy of transforming its technological competitiveness into high earnings through its operations of resources, such as minerals and land, with relatively higher appreciation potentials in the long-term.

The transactions contemplated under the Cooperation Agreement and the Joint Venture Agreement will benefit the Company as it is expected that relatively higher return will be generated from the high quality copper and cobalt mineral resources exploited in Congo which will be obtained at a reasonable price. The transactions will also benefit the Company with the opportunities to engage in the contracting of large international construction projects, as well as to expand into the overseas market within a short

– 13 –

LETTER FROM THE BOARD

period of time, thereby further strengthening the Company’s competitiveness in the global context. At the same time, the Government of Congo will grant attractive tax relief to the Company, which avoid the Company in going through complicated tax procedures and issues in relation to its operations of overseas mineral projects, thereby enhancing the feasibility of the transactions.

The Joint Venture Company’s primary business is the exploration of copper and cobalt mines. As with all mining businesses, the investment in the Joint Venture Company will span over a long period. The Group expects that there shall be no immediate return or earnings from the Joint Venture Company to be attributed to the Group. Substantial capital commitments have to be made which will become longterm liabilities of the Group. However, Congo Mining will transfer the Relevant Mining Rights (which were valued at approximately US$1.9 billion (equivalent to approximately HK$14.809 billion)) to the Joint Venture Company, to which the CR Investors have 43% interests in aggregate.

Despite possible policy changes and unstable economic conditions in developing markets, the Directors are of the view that the Joint Venture Agreement and the Cooperation Agreement have been entered into on normal commercial terms and that the Joint Venture Agreement and the Cooperation Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

LISTING RULES IMPLICATIONS

Since the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of the investments and capital commitments under the Joint Venture Agreement and the Cooperation Agreement, in aggregate, exceed 5% (but not more than 25%), the investments and capital commitments under the Joint Venture Agreement and the Cooperation Agreement constitute a discloseable transaction of the Company under Rule 14.06 of the Listing Rules.

ADDITIONAL INFORMATION

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

Yours faithfully, By Order of the Board China Railway Group Limited Shi Dahua Chairman

For reference only, an exchange rate of HK$7.79454 to US$1.00 has been used for the conversion of United States dollars into Hong Kong dollars for the purpose of this circular.

– 14 –

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 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.

2. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, none of the Directors, the supervisors and the chief executive of the Company had any interest or short position in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which: (a) were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Directors, the supervisors and the chief executive of the Company were deemed or taken 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 Issuers adopted by the Company, to be notified to the Company and the Hong Kong Stock Exchange.

Save for Shi Dahua (Chairman and Executive Director of the Company), who also serves as the chairman of China Railway Engineering Corporation (‘‘CRECG’’), the controlling shareholder of the Company, Li Changjin (President and Executive Director of the Company) and Gao Shutang (Chairman of the Supervisory Committee of the Company) who also serve as directors of CRECG, none of the Directors or supervisors hold any positions with CRECG. Details of the shareholding of CRECG in the Company are set out in the paragraph headed ‘‘Substantial Shareholders’ Interests’’ in this appendix.

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS

• (a) As at the Latest Practicable Date, so far as is known to any Director, supervisor or chief executive of the Company, persons (other than a Director, supervisor or chief executive of the Company) who had interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be maintained by the Company under section 336 of the SFO and their interests were as follows:

Holders of A-shares

					Approximate
				Approximate	percentage of
Name of Substantial		Number of	Nature of	percentage of	total issued
Shareholder	Capacity	A-shares held	Interest	Issued A-shares	shares
				(%)	(%)
CRECG	Beneficial Owner	12,417,510,000	Long position	72.65	58.30

– 15 –

GENERAL INFORMATION

APPENDIX

Holders of H-shares

					Approximate
				Approximate	percentage of
Name of Substantial		Number of	Nature of	percentage of	total issued
Shareholder	Capacity	H-shares held	Interest	issued H-shares	shares
				(%)	(%)
National Council for	Beneficial Owner	382,490,000	Long position	9.09	1.80
Social Security
Fund of the PRC
UBS AG	Beneficial Owner	208,965,828	Long position
	Interest of controlled	7,654,000	Long position
	corporations
	(Note 1)
	Total	216,619,828		5.15	1.02
	Beneficial Owner	25,293,590	Short position
	Person having a	40,573,958	Short position
	security interest
	in shares
	Interest of controlled	6,000,000	Short position
	corporation
	(Note 1)
	Total	71,867,248		1.71	0.34

• Note 1: According to the Corporate Substantial Shareholder Notice filed by UBS AG with the Hong Kong Stock Exchange dated 28 April 2008, UBS AG wholly owns UBS Global Asset Management (Japan) Ltd (which held 1,221,000 H-shares of the Company), UBS Global Asset Management (UK) Limited (which held 269,000 H-shares of the Company), UBS (Italia) S.p.A. (which held 164,000 H-shares of the Company), and UBS Securities LLC (which held 6,000,000 H-shares of the Company and 6,000,000 short position in the H-shares of the Company). Accordingly, UBS AG is deemed interested in the long position and short position held by each of its wholly-owned subsidiaries as set out above.

• (b) As at the Latest Practicable Date, so far as is known to any Director, supervisor or chief executive of the Company, persons (other than members of the Group) who were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group (other than the Company) and their shareholding were as follows:

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
Paul Y. — CREC Construction	HK$1,000,000	Paul Y. Construction	50
Co., Ltd.		Company, Limited
Kalumbwe Myunga (MKM)	US$1,000,000	Sukadi Diabod	17.5
Mining Co., Ltd.		EXACO	11.5
Luisha Mining Co., Ltd.	US$100,000	Zongwe Kiliba	28
China-Africa Co-Investment &	RMB10,000,000	Qinghai Western International	50
Management (Beijing) Co., Ltd.		Mining Resources Co., Ltd.

– 16 –

GENERAL INFORMATION

APPENDIX

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
COMPAGNIE MALIENNE DES	CFA franc 1,500,000,000	The Republic of Mali	20
TEXTILES-SA
Zhuhai S.E.Z Haitai Biological	RMB10,000,000	Hongrun (Macau) Co., Ltd.	25
Pharmaceuticals Co., Ltd.
NOUVELLE INDUSTRIE	US$520,000	Zhang Ouyi	20
PHARMACEUTIQUE (NIPHAR		Zhang Zhijiang	18
SA)
Guiyang Tongxing Plastic Steel	RMB686,000	Huang Renbin	27.1
Co., Ltd.		Mu Yuanlin	14.6
		Guiyang Tongxing Machinery	14.6
		& Equipment Leasing Co.,
		Ltd.
Guiyang Tongxing Property	RMB500,000	Fang Kejun	20
Management Co., Ltd.		Guiyang Tongxing Machinery	20
		& Equipment Leasing Co.,
		Ltd.
Shenzhen Baochuang Construction	RMB21,000,000	Rotorua Development Co.,	30
Material Co., Ltd.		Ltd.
Chengdu Tiehongyuan Automobile	RMB4,000,000	Chengdu Xinyidai Engineering	25
Service Co., Ltd.		Machinery Co., Ltd.
Zigong Yantan New Town	RMB20,000,000	Sichuan Huatai Industry	41
Investment & Development Co.,		(Group) Co., Ltd
Ltd.
Huludao Binhai New District	RMB60,000,000	Beijing Yuantong Investment	24.5
Investment Co., Ltd		Management Co., Ltd
Huludao Bohai Heat Power Co.,	RMB5,000,000	Lv Chun Xing	10
Ltd
Yunnan Fuyan Expressway Co.,	RMB400,000,000	Yunan Tongdaxiang Road	20
Ltd		Bridge Investment &
		Development Co., Ltd
		Yunnan East Expressway Co.,	10
		Ltd
Daxian Cuipingshan Property	RMB50,000,000	Sichuan Hongyuanxing	50
Development Co., Ltd		Property Development Co.,
		Ltd
Yunnan Danjun Green	RMB1,000,000	Hubei Wantai Technology	50
Development Co., Ltd		Investment Co., Ltd
Beijing Gaosheng Property	RMB466,800,000	Beijing Xinggang Property	50
Development Co., Ltd		Co., Ltd

– 17 –

GENERAL INFORMATION

APPENDIX

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
Beijing Zhongcui Investment Co.,	RMB20,000,000	Wei Yuncui	12.5
Ltd		Pu Yuan	12.5
Chengdu Tianxi Industry Co., Ltd	RMB2,000,000	The Material Storage &	10
		Transportation Station of
		China Railway No. 2
		Engineering Group Co., Ltd
Chengdu West Metallurgy & Trade	RMB2,000,000	Chengdu West Metallurgy	20
Co., Ltd.		Development Co., Ltd
		Fu Qian
Chengdu New Chuanzang Line	RMB20,000,000	Sichuan Tianhe Trading Co.,	30
Construction & Development		Ltd
Co., Ltd
China Railway Chengdu Hot	RMB18,000,000	Chengdu Xingdingzhong	20
Spring Resources Development		Communication Engineering
Co., Ltd.		Design and Consultation
		Co., Ltd
China Railway Chengdu	RMB10,000,000	Chengdu Xingdingzhong	23
Badengbadeng Hot Spring		Communication Engineering
Investment & Development Co.,		Design and Consultation
Ltd.		Co., Ltd
Sichuan Sanyuan Cultural Industry	RMB30,000,000	Chongqing Huacui Property	40
Development Co., Ltd.		Development Co., Ltd.
China Railway Chengdu Mareka	RMB800,000	Chengdu Mareka Hotel	40
Hotel Management Co., Ltd.		Property Management Co.,
		Ltd.
Tieke Engineering Co., Ltd.	RMB60,000,000	The First Railway Survey And	16.67
		Design Institute
		Railway Science Research	13.33
		Institution
China Railway Hefei Electronic	RMB600,000	Yuan Kanghong	11
Appliance Co., Ltd.
Huainan Yangguangcheng	RMB10,000,000	Huainan Huayi Investment	30
Construction Co., Ltd.		Co., Ltd.
Hengyang Zhengxing Labour	RMB60,000	Rong Denglu	17
Service Co., Ltd.
Shanghai Haiqing Building	USD3,000,000	(British) Yifeng Group	25
Engineering Co., Ltd.		Development Co., Ltd.
Guiyang Baiyun Tiewujian	RMB100,000	Deng Shuchuan	30
Property Development Co., Ltd.

– 18 –

GENERAL INFORMATION

APPENDIX

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
Guangsha Chongqing Yijian	RMB20,000,000	Guangsha Chongqing No. 1	50
Property Development Co., Ltd.		Construction (Group) Co.,
		Ltd.
Guangzhou Maijibeisi Network	RMB7,000,000	The 30th Institute of China	14.285
Information Co., Ltd.		Electronic Technology
		Group Corporation
		Xiamen Yaxun Network Co.,	14.285
		Ltd.
Shenzhen Maijibeisi Network	RMB5,195,000	Xiamen Yaxun Network Co.,	17.228
Information Co., Ltd.		Ltd.
Beijing Fenghuai Sleeper Co., Ltd.	RMB27,000,000	Beijing Huaibei Mining	15
		Cement Industry
		Corporation
		Beijing Jingtie Multiple	15
		Economy & Trade
		Development Center
		Beijing Jingtie North	10
		Investment Management
		Co., Ltd.
Hanyuan Tongxin Sand & Stone	RMB500,000	Sichuan Libo Investment	49
Co., Ltd.		consulting Co., Ltd.
Sichuan Chenggong Hedong	RMB200,000,000	Suining Hedong Development	40
Industry Co., Ltd.		& Construction Investment
		Co., Ltd.
China Railway No. 8 Engineering	RMB31,410,000	Chengdu Railway Bureau	35
Group Employee Training Co.,		Multiple Operation Group
Ltd.		Corporation
China Railway Tenth Group Third	RMB50,000,000	Hong Kong Waikee (Zens)	25
Engineering Co., Ltd.		Const & Transport, Co. Ltd.
Wuhan DRC Engineering	US$200,000	DRC Consultants, Inc.	50
Consulting Co., Ltd.
China Railway Major Bridge	RMB63,600,000	Shenzhen Meili Group Co.,	35
Engineering Group Wuhan Real		Ltd.
Estate Development Co., Ltd.
Wuhan Sanfang Real Estate Co.,	RMB300,000,000	Hubei Minmetals Industrial	33.33
Ltd.		Investment Company
		Limited
Beijing Tiexintong Technology	RMB1,863,000	Liang Xiao	48.04
Development Co., Ltd.
Shenzhen Zhongtiejian Investment	RMB10,000,000	Shenzhen Huazhihui	40
Co., Ltd.		Investment Co., Ltd.

– 19 –

GENERAL INFORMATION

APPENDIX

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
Guangdong Panyu Liren Property	RMB62,500,000	Tian An China Properties	15
Co., Ltd.		Limited
		Ease Standard Development	10
		Limited
Guiyang Lixin Property	RMB8,080,000	Wang Yinhui	30
Development Co., Ltd.
China Railway Construction Group	approximately US$140,000	SARL COFFER-ALGERIE	40
(Algeria) Co., Ltd.		Limited Liability Company
Tamrock Luoyang Machinery Co.,	RMB9,800,000	Tamrock Corp.	35
Ltd.
Neijiang Xinhong Road	RMB10,000,000	Sichuan Hongcheng Property	40
Development Co., Ltd.		Development Co., Ltd.
Chengdu WISETEC Engineering	RMB500,000	Beijing, WISETEC	49
Consulting		Technologies Co., Ltd.
& Testing Co., Ltd.
Shandong GAIA International	RMB500,000	Architects GAIA	45
Design Co., Ltd.
China Railway Baoji Baogong Rail	RMB3,000,000	Shaanxi Sanrong Industry Co.,	36.67
Car Inspection & Repair Co.,		Ltd.
Ltd.
Tangshan Shanfeng Maganese	RMB1,729,192.08	Darongge Village Economic	49
Turnout Associated Company		Association in Chahe Town,
		Fengrun District, Tangshan
Baoji Qiaoyuan Industry	RMB5,795,000	Baoji Xinyong Complex Plant	48.2
& Trade Co., Ltd
Shantou Baoqiao Steel Structure	RMB7,500,000	Shantou Panshi Major Bridge	26.67
Engineering Co., Ltd		Construction Corporation
China Railway Huafeng (Beijing)	RMB10,000,000	Xinghuafeng (Beijing)	40
Property Development Co., Ltd		International Investment
		Consulting Co., Ltd.
China Railway Hengfeng Real	RMB50,000,000	Beijing Fengfai	18
Estate Co., Ltd.		Comprehensive Investment
		Co., Ltd.
		Beijing Shuhe Investment	15
		Management Co., Ltd.
		Beijing Rongyuan Investment	15
		Management Co., Ltd.
China Railway Sunnit Engineering	RMB200,000,000	Yang Guoliang	49
Co., Ltd.

– 20 –

GENERAL INFORMATION

APPENDIX

		Person with 10% or more
	Total share capital or	interest (other than the	Percentage of
Member of the Group	registered capital	Company)	interests
			(%)
Guangxi Cengxing Expressway	RMB100,000,000	Guangxi Expressway	15
Development Co., Ltd.		Administration Bureau
Guangxi Quanxing Expressway	RMB100,000,000	Guangxi Expressway	25
Development Co., Ltd.		Administration Bureau
Wuchuan Guojin Mining Co., Ltd.	RMB6,000,000	Beijing Tianshuo Jiye Mining	48
		Investment Co., Ltd.
China Railway Shenzhen Yongfeng	RMB10,000,000	Shenzhen Huazhihui	40
Investment & Development Co.,		Investment Co., Ltd.
Ltd.
China Railway Shanghai Sihai	RMB20,000,000	Shanghai Sihai & Juren	40
Property Co., Ltd.		Economy Development Co.,
		Ltd.
CNTT Chinese New Turnout	EUR21,500,000	VAE GmbH	29.07
Technologies Co., Ltd.		BWG Gesellschaft mbH &	20.93
		CoKG
Chengdu China Railway Celebrity	RMB160,000,000	China Celebrity City Hotels	50
Industry Development Co., Ltd.		Management Group Co.,
		Ltd.
Nuova Connavi (Beijing)	EUR7,500,000	Nuova Connavi s.r.l.	60
Composite Co., Ltd.

Save as disclosed above, so far as is known to any Director, supervisor or chief executive of the Company, no other person 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, or was directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group as at the Latest Practicable Date.

4. LITIGATION

As at the Latest Practicable Date, the Group is involved in certain litigation either as plaintiff or defendant, which have arisen in its ordinary course of business. Set out below are details of outstanding material litigation of the Group.

Dispute over loan guarantee

The plaintiff, Shenzhen Development Bank Co., Ltd., Shenzhen Bao’an Sub-branch, lent RMB220 million to Shenzhen Wanghai Yikang Industry Development Co., Ltd. (‘‘Wanghai Yikang’’), and China Railway Construction Group (CRCG) Co., Ltd. (‘‘China Railway Construction’’), a subsidiary of the Company, and 4 other legal persons/natural persons had provided suretyship of joint and several liabilities for the above loan. As Wanghai Yikang defaulted in the repayment of the loan, the plaintiff commenced court proceedings against Wanghai

– 21 –

GENERAL INFORMATION

APPENDIX

Yikang and the 5 guarantors (including China Railway Construction) on 23 November 2004. Subsequently, Wanghai Yikang has filed a bankruptcy petition, and accordingly, the court suspended the litigation for the case. China Railway Construction had reported its rights over the debts to the court as a result of it also being the main contractor of one of the properties invested and constructed by Wanghai Yikang, being the Zheng Xie Lian Yi Building (政協聯誼大廈).

In August 2007, China Lvgem Co., Ltd. (‘‘Lvgem Group’’) applied for a debt restructuring to the Intermediate People’s Court of Shenzhen, and it was decided by the Intermediate People’s Court of Shenzhen that Lvgem Group shall commence the restructuring procedure. Each major creditor, including China Railway Construction, had entered into a Debt Transfer Agreement with Lvgem Group, respectively, pursuant to which China Railway Construction transferred all its debts, which had been reported to the manager of Wanghai Yikang, to Lvgem Group at the transfer price based on the debt amount confirmed by the court’s final judgment. In view of China Railway Construction was also the guarantor of Wanghai Yikang, upon the signing of the agreement, Lvgem Group immediately commenced negotiation with Shenzhen Development Bank Co., Ltd., Shenzhen Bao’an Sub-branch regarding the release China Railway Construction from all its obligations and responsibilities as a guarantor or the repayment of all such debts by Lvgem Group on behalf of the guarantor, so as to resolve the issues arising from the guarantee provided by China Railway Construction by replacing the guarantor or in a manner approved by China Railway Construction and the bank. As at the Latest Practicable Date, Lvgem Group paid a total of RMB17.98 million as the consideration of the above debt transfer.

On 22 December 2007, Guangdong Provincial High People’s Court made a judgment based on the ‘‘Civil Written Order (2004) Yue Gao Fa Min Er Chu Zi No. 35’’. The main judgments were as follows: (1) the defendant, Wanghai Yikang, should fully repay the loan of a principal amount of RMB220,000,000 and related interests to the plaintiff, Shenzhen Development Bank Co., Ltd., Shenzhen Bao’an Sub-branch within 30 days from the effective date of the judgment; (2) the defendant, China Railway Construction, should undertake the joint and several responsibility for the repayment of the debts confirmed in the aforesaid judgment. Upon full repayment of the debts, China Railway Construction shall be entitled to claim for the recovery from the defendant, Wanghai Yikang or to require other guarantors undertaking such joint and several responsibility to fully repay their respective share of the debt pursuant to Rule 12 of the ‘‘Security Law of the People’s Republic of China’’. Although the judgment was dated 22 December 2007, China Railway Construction was only summoned by the court on 10 March 2008 notifying it to attend to the court for the pronouncing of the judgment at 15:00 on 18 March 2008. China Railway Construction has already filed an appeal.

Save as disclosed above, no member of the Group was engaged in any other litigation, arbitration or claim of material importance and no other litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against any member of the Group.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors and supervisors of the Company had entered into, or proposed to enter into, any service contract with the Company or any member of the Group that is not determinable within one year without payment of compensation (other than statutory compensation).

– 22 –

GENERAL INFORMATION

APPENDIX

6. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors and their respective associates was interested in any business, apart from the Group’s business, that competes or competed or is or was likely to compete, either directly or indirectly, with the Group’s business.

7. MISCELLANEOUS

• (a) Mr. Yu Tengqun and Mr. Tam Chun Chung act as joint company secretary of the Company. Mr. Yu is an arbitrator of China International Economic and Trade Arbitration Commission and an arbitrator of Beijing Arbitration Commission. Mr. Tam is a member of the Hong Kong Institution of Certified Public Accountants and a fellow of the Chartered Association of Certified Accountants.

• (b) Mr. Tam Chun Chung also acts as the qualified accountant of the Company (as required under the Listing Rules).

• (c) The registered office of the Company is at No. 1 Xinghuo Road, Fengtai District, Beijing, the PRC. The principal place of business of the Company in Hong Kong is Unit 1201–1203, 12/F, APEC Plaza, 49 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong.

• (d) Computershare Hong Kong Investor Services Limited, the H-share registrar of the Company in Hong Kong, is located at Rooms 1712–1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

– 23 –