CITIC Limited — Proxy Solicitation & Information Statement 2007

Sep 16, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

If you are in doubt as to any aspect of this circular or as to the action you should take, 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 CITIC Pacific Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank or stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular does not constitute an offer or invitation to subscribe for the purchase of any securities nor is it calculated to invite any such offer or invitation.

==> picture [189 x 61] intentionally omitted <==

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 267)

DISCLOSEABLE TRANSACTION IN RELATION TO THE PROPOSED SPIN-OFF AND SEPARATE LISTING OF DAH CHONG HONG HOLDINGS LIMITED ON THE MAIN BOARD OF THE STOCK EXCHANGE OF HONG KONG LIMITED AND PROPOSED SHARE OPTION SCHEMES FOR DAH CHONG HONG HOLDINGS LIMITED

Independent Financial Adviser

Commerzbank AG Hong Kong Branch

A letter from the Independent Board Committee containing its recommendation to vote in favour of the Proposed Spin-off is set out on page 21 of this circular. A letter from Commerzbank, the independent financial adviser to the Independent Board Committee and the Shareholders, containing its advice in relation to the Proposed Spin-off is set out on pages 22 to 35 of this circular.

A notice convening the Extraordinary General Meeting to be held at Island Ballroom, Level 5, Island ShangriLa Hotel, Two Pacific Place, Supreme Court Road, Hong Kong on Wednesday, 3 October 2007 at 3:30 p.m. is set out at the end of this circular. Whether or not you intend to attend the Extraordinary General Meeting in person, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the share registrars of CITIC Pacific Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, 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 Extraordinary 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 Extraordinary General Meeting or any adjournment thereof should you so wish.

17 September 2007

EXPECTED TIMETABLE

2007

Last day for dealing in Shares cum-entitlement to the Preferential Offer . . . . . . Thursday, 27 September

Latest time for return of proxy forms in respect of the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . 3:30 p.m. on Monday, 1 October Latest time for lodging transfers of Shares to qualify for the Preferential Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Tuesday, 2 October Register of members of the Company closes from. . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. to 4:30 p.m. on Wednesday, 3 October

Record Date for determining the entitlement to the Preferential Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 3 October Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3:30 p.m. on Wednesday, 3 October Register of members of the Company re-opens on . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 4 October

– i –

CONTENTS

		Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B.	Background of DCH Group and the Proposed Spin-off . . . . . . . . . . . . . . . . . . . . . . . . 7
C.	Further Information on the Proposed Spin-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D.	Preferential Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
E.	Closure of Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
F.	Share Option Schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
G.	Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
H.	Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
I.	General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
J.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Letter from Commerzbank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Appendix I	— Summary of the Principal Terms of the Share Option Schemes. . . . . . . . . . . . 36
Appendix II — General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

– ii –

DEFINITIONS

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

• “associate(s)” has the meaning ascribed to it under the Listing Rules

• “Assured the entitlement of Qualifying Shareholders to apply for Reserved Shares under Entitlement(s)” the Preferential Offer on the basis of an assured entitlement of one Reserved Share for every whole multiple of 25 Shares held by each Qualifying Shareholder at the close of business on the Record Date

• “BNP Paribas” BNP Paribas Capital (Asia Pacific) Limited, the global coordinator in the Global or “Global Offering and the sponsor in the application for Listing Coordinator” or “Sponsor”

• “Board” the board of Directors

• “business day” any day (excluding Saturday and Sunday) on which banks in Hong Kong are generally open for business

• “CCASS” the Central Clearing and Settlement System established and operated by HKSCC “CITIC HK” CITIC Hong Kong (Holdings) Limited, a substantial shareholder holding approximately 29% interest in CITIC Pacific

• “Companies the Companies Ordinance (Chapter 32 of the Laws of Hong Kong), as amended, Ordinance” supplemented or otherwise modified from time to time

• “Company” or CITIC Pacific Limited “CITIC Pacific”

• “DCH Employees” any person employed by DCH Holdings or any of its subsidiaries, any person who is an officer or directors (whether executive or non-executive) of DCH Holdings or any of its subsidiaries

• “DCH Group”

• DCH Holdings and its subsidiaries

• “DCH Holdings” Dah Chong Hong Holdings Limited, a wholly owned subsidiary of CITIC Pacific as at the date of this circular

• “DCH Share(s)” the ordinary share(s) of HK$0.15 each (or such other nominal amount as to be set out in the Prospectus) as will, after a reorganisation of the capital of DCH Holdings, comprise in the share capital of DCH Holdings, for which application has been made for the listing and permission to deal on the Main Board

• “Director(s)” the director(s) of CITIC Pacific

• “Extraordinary the extraordinary general meeting of CITIC Pacific to be held at Island General Meeting” Ballroom, Level 5, Island Shangri-La Hotel, Two Pacific Place, Supreme Court Road, Hong Kong on Wednesday, 3 October 2007 at 3:30 p.m., notice of which is set out at the end of this circular

• “Global Offering” the Public Offer (including the Preferential Offer), the International Placing

– 1 –

DEFINITIONS

• “Grantee” any DCH Employee who accepts an offer of the grant of an option in accordance with the terms of the Share Option Schemes or (where the context so requires) the legal personal representatives of such DCH Employee

• “Group” CITIC Pacific and its subsidiaries (including DCH Group)

• “HK$” or “HK Hong Kong dollars, the lawful currency of Hong Kong dollars”

• “HKSCC” Hong Kong Securities Clearing Company Limited

• “Hong Kong” or the Hong Kong Special Administrative Region of the PRC “HK”

• “IFA” or Commerzbank AG, acting through its Hong Kong branch, a licensed bank under “Commerzbank” the Banking Ordinance and an authorised financial institution under the SFO to conduct type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as set out in Schedule 5 to the SFO, and appointed as the independent financial adviser to the Independent Board Committee and the Shareholders of the Company in relation to the Proposed Spin-off

• “Independent Board an independent committee of the Board comprising Mr. Alexander Reid Committee” Hamilton and Mr. Hansen Loh Chung Hon

• “International the conditional placing of the Offer Shares proposed to be made outside the Placing” United States in reliance on Regulation S under the US Securities Act and in the United States to QIBs under Rule 144A at the Offer Price under the Global Offering, on and subject to the terms to be set out in the Prospectus

• “IPO” initial public offering

• “Latest Practicable 12 September 2007, being the latest practicable date prior to the printing of this Date” circular for determining certain information for the purpose of inclusion in this circular

• “Listing” the listing of DCH Shares on the Main Board

• “Listing Committee” the Listing Committee of the Stock Exchange

• “Listing Date” the date on which DCH Shares will be listed and from which dealings therein will be permitted to take place on the Main Board

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time

• “Main Board” the main board of the Stock Exchange

• “New DCH such number of new DCH Shares proposed to be issued and offered by DCH Share(s)” Holdings at the Offer Price under the Global Offering (tentatively being 180,000,000 new DCH Shares subject to finalisation to be set out in the Prospectus), out of which the Reserved Shares and the DCH Shares proposed to be initially made available for subscription using pink application forms will be allocated

– 2 –

DEFINITIONS

• “Offer Price” the final offer price per Offer Share fixed at a HK$ amount (exclusive of brokerage fee, SFC transaction levy and Stock Exchange trading fee) at which the DCH Shares are to be purchased or subscribed for pursuant to the Global Offering, as to be described in the Prospectus

• “Offer Share(s)” not more than 50% of all the issued DCH Shares immediately upon completion of the Global Offering, comprising the New DCH Shares and the Sale DCH Shares

• “Over-allotment the option proposed to be granted by the Selling Shareholder to the Global Option” Coordinator pursuant to which the Selling Shareholder may be required to sell an additional of up to 15% of the Offer Shares proposed to be initially offered under the Global Offering (i.e. tentatively up to 117,000,000 Sale DCH Shares subject to finalisation to be set out in the Prospectus) to cover over-allocations in the International Placing, details of which will be set out in the Prospectus

• “Overseas registered holders of Shares whose addresses on the register of members of Shareholders” CITIC Pacific are outside Hong Kong on the Record Date

• “PN15” practice note 15 of the Listing Rules

• “Post-IPO Share the post-IPO share option scheme proposed to be conditionally adopted by DCH Option Scheme” Holdings, the principal terms of which are summarised in Part B of Appendix I to this circular

• “PRC” or “China” the People’s Republic of China, which for the purpose of this circular, excludes or “Mainland Hong Kong, Macao and Taiwan China”

• “Pre-IPO Share the pre-IPO share option scheme proposed to be adopted by DCH Holdings, the Option Scheme” principal terms of which are summarised in Part A of Appendix I to this circular

• “Pre-IPO Share the share options proposed to be granted under the Pre-IPO Share Option Options” Scheme

• “Preferential Offer” the proposed preferential offer to the Qualifying Shareholders in respect of the Reserved Shares at the Offer Price, on and subject to the terms and conditions to be set out in the Prospectus, details of which are set out in the section headed “Letter from the Board — Preferential Offer” below

• “Proposed Spin-off” the proposed spin-off of DCH Holdings to be effected by way of the Global Offering and followed by a separate listing of DCH Shares on the Main Board

• “Prospectus” the prospectus proposed to be issued by DCH Holdings in relation to the Global Offering

• “Public Offer” the offer of the Offer Shares for purchase or subscription by the public in Hong Kong at the Offer Price proposed to be made under the Global Offering, on and subject to the terms and conditions to be set out in the Prospectus

• “QIBs” qualified institutional buyers as defined in Rule 144A

– 3 –

DEFINITIONS

• “Qualifying holders of not less than 25 Shares, whose names as will appear on the register Shareholders” of members of CITIC Pacific on the Record Date, other than Overseas Shareholders subject to compliance with Rule 13.36(2) of the Listing Rules

• “Record Date” 3 October 2007, being the date for ascertaining the Assured Entitlements

• “Regulation S” Regulation S under the US Securities Act, as amended, supplemented or otherwise modified from time to time

• “Reserved Shares” such number of DCH Shares proposed to be offered pursuant to the Preferential Offer (tentatively being 44,900,000 New DCH Shares subject to finalisation to be set out in the Prospectus)

• “Retained Group” CITIC Pacific and its subsidiaries (excluding DCH Group)

• “Rule 144A” Rule 144A under the US Securities Act, as amended, supplemented or otherwise modified from time to time

• “Sale DCH Shares” such number of DCH Shares as beneficially owned by the Selling Shareholder which are to be offered for sale by the Selling Shareholder at the Offer Price under the Global Offering (tentatively being 601,200,000 DCH Shares subject to finalisation to be set out in the Prospectus), and to the extent the Over-allotment Option is exercised, together with such number of additional Sale DCH Shares to be offered for sale by the Selling Shareholder pursuant to the exercise of the Over-allotment Option

• “Securities the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), and Futures as amended, supplemented or otherwise modified from time to time Ordinance” or

• “SFO”

• “Selling CITIC Pacific (acting through its wholly-owned subsidiary Colton Pacific Shareholder” Limited)

• “SFC” the Securities and Futures Commission of Hong Kong

• “Share Option the Pre-IPO Share Option Scheme and the Post-IPO Share Option Scheme Schemes”

• “Share(s)” ordinary share(s) of HK$0.40 each in the share capital of CITIC Pacific

• “Shareholder(s)” the shareholder(s) of CITIC Pacific

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “subsidiary” has the meaning ascribed thereto in section 2 of the Companies Ordinance

• “Substantial has the meaning ascribed thereto in the Listing Rules Shareholder”

• “Underwriters” the underwriters of the International Placing and the Public Offer

– 4 –

DEFINITIONS

• “Underwriting the underwriting agreements to be entered into by, amongst others, DCH Agreements” Holdings, the Selling Shareholder and the relevant underwriters relating to the Public Offer and the International Placing

“United States” the United States of America

• “US Securities Act” United States Securities Act of 1933, as amended

“Wal-Mart China” 沃爾瑪（中國）投資有限公司Wal-Mart (China) Investment Co., Ltd “Wal-Mart JVs” joint ventures between CITIC Pacific and Wal-Mart China “Watson Wyatt” Watson Wyatt Hong Kong Limited, an independent actuary “%” percent

Unless otherwise specified, statements contained in this circular assume no exercise of the Overallotment Option and of any options which may be granted under the Share Option Schemes.

If there is any inconsistency between the official Chinese name of the PRC laws and regulations or the PRC government authorities or the PRC entities mentioned in this circular and their English translation, the Chinese version shall prevail. English translations of official Chinese names are for identification purposes only.

In this circular, unless otherwise specified, conversions of US dollars and RMB at 30 June 2007 into Hong Kong dollars are based on the approximate exchange rates of US$1.00 to HK$7.80 and RMB100.3 to HK$100 respectively, for the purpose of illustration only. No representation is made that any amount in Hong Kong dollars, US dollars or RMB could have been or can be converted at the above rates or at any other rates.

All times referred to in this circular refers to Hong Kong local time.

Unless otherwise stated, the unaudited figures contained in this circular are prepared under Hong Kong Financial Reporting Standards.

– 5 –

LETTER FROM THE BOARD

==> picture [189 x 61] intentionally omitted <==

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 267)

Directors: Larry Yung Chi Kin (Chairman) Henry Fan Hung Ling (Managing Director) Peter Lee Chung Hing (Deputy Managing Director) Carl Yung Ming Jie (Deputy Managing Director) Leslie Chang Li Hsien (Deputy Managing Director) Vernon Francis Moore (Executive Director) Li Shilin (Executive Director) Liu Jifu (Executive Director) Chau Chi Yin (Executive Director) Milton Law Ming To (Executive Director) Wang Ande (Executive Director) Willie Chang Hamilton Ho Hau Hay Alexander Reid Hamilton Hansen Loh Chung Hon Norman Ho Hau Chong André Desmarais Chang Zhenming* Peter Kruyt[#]

Registered Office: 32/F. CITIC Tower 1 Tim Mei Avenue Central Hong Kong

* Non-executive Director

** Independent non-executive Director

• # Alternate Director to André Desmarais

17 September 2007

To the Shareholders,

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION IN RELATION TO THE PROPOSED SPIN-OFF AND SEPARATE LISTING OF DAH CHONG HONG HOLDINGS LIMITED ON THE MAIN BOARD OF THE STOCK EXCHANGE OF HONG KONG LIMITED AND PROPOSED SHARE OPTION SCHEMES FOR DAH CHONG HONG HOLDINGS LIMITED

A. INTRODUCTION

On 31 July 2007, the Board announced that (a) on 20 July 2007, CITIC Pacific made an application to the Stock Exchange for the approval of the Proposed Spin-off, and (b) on 31 July 2007, DCH Holdings submitted an advance booking form (Form A1) to the Stock Exchange for an application for the listing of, and permission to deal in, the DCH Shares on the Main Board of the Stock Exchange.

– 6 –

LETTER FROM THE BOARD

On 14 September 2007, the Board further announced certain details of the Proposed Spin-off and the Preferential Offer.

The purposes of this circular are: (1) to provide Shareholders with further information on the reasons for, and the benefits of, the Proposed Spin-off (together with such other information relating to the Proposed Spin-off as required by the Listing Rules for a discloseable transaction of CITIC Pacific including the terms of the Preferential Offer), (2) to provide Shareholders with information on the proposed terms of the Share Option Schemes and the proposed grant of options under the PreIPO Share Option Scheme, (3) to set out the letter from the Independent Board Committee containing its recommendation, (4) to set out the letter from Commerzbank which contains its advice to the Independent Board Committee and the Independent Shareholders (i.e. all Shareholders) regarding the voting on the Proposed Spin-off; (5) to seek Shareholders’ approval for the Proposed Spin-off and transactions related thereto, and the adoption of the Share Option Schemes; and (6) to give notice to Shareholders of the Extraordinary General Meeting at which ordinary resolutions will be proposed to approve the Proposed Spin-off and transactions related thereto, and the adoption of the Share Option Schemes.

Shareholders and potential investors should note that the Proposed Spin-off, which is subject to a number of conditions, may not proceed. In particular, there is no assurance that approval from the Stock Exchange and/or the Listing Committee will be granted. Accordingly, Shareholders and other investors are reminded to exercise caution when dealing in the securities of the Company.

B. BACKGROUND OF DCH GROUP AND THE PROPOSED SPIN-OFF

DCH Group is a diversified business conglomerate in motor vehicle sales, motor vehicle related business and services, sales of food and consumer products, as well as logistics services, supported by integrated distribution platforms and with a well-established base and network in the PRC, Hong Kong and Macao.

Leveraging on the strong Dah Chong Hong brand name in Hong Kong and with over 40 years of experience engaging in motor vehicle sales and related businesses, DCH Group is now a leading motor group in Hong Kong and Macao and is pursuing a strategy to be one of the leaders in the PRC market. DCH Group is also a leading food and consumer products distribution group with over 50 years experience and a leading logistics services provider in Hong Kong. It is pursuing a strategy to be a leading food and consumer products trading group and a leading logistics services provider in the PRC and Macao.

The Board proposes the separate listing of DCH Holdings as it believes that the separate listing of DCH Holdings will be beneficial to the Group for the following reasons:

• the Proposed Spin-off could unlock the value of DCH Holdings and investors would be able to appraise and assess the performance and potential of DCH Holdings separate and distinct from that of CITIC Pacific. CITIC Pacific is expected to remain a major shareholder of DCH Holdings after Listing, and to benefit from any enhanced value of DCH Holdings through the Proposed Spin-off; and

• the Proposed Spin-off is expected to comprise sale of existing shares (i.e. the Sale DCH Shares) and subscription of new shares (i.e. the New DCH Shares) of DCH Holdings. Proceeds from the sale and subscription may also provide funding to the Retained Group and DCH Group to make further development in their businesses respectively.

– 7 –

LETTER FROM THE BOARD

Please refer to the subparagraph headed “C. Further information on the Proposed Spin-off — 5. Reasons for and benefits of the Proposed Spin-off” below for further details.

The Assured Entitlements required under PN15 will be satisfied by way of the Preferential Offer to be made to the Qualifying Shareholders.

As each of the total assets and revenue of DCH Holdings represents more than 5% of CITIC Pacific’s total assets and revenue, respectively, DCH Holdings is a “major subsidiary” of CITIC Pacific as defined under the Listing Rules. In addition, since the applicable ratios calculated with reference to the Proposed Spin-off is expected to be more than 5%, but less than 25%, the Proposed Spinoff constitutes a material dilution of CITIC Pacific’s interest in DCH Holdings and a discloseable transaction under Chapter 14 of the Listing Rules.

Accordingly, the Proposed Spin-off is subject to approval from the Shareholders under paragraph 3(e)(1)(ii) of Practice Note 15 of the Listing Rules.

DCH Holdings is also seeking to adopt the Share Option Schemes. According to Chapter 17 of the Listing Rules, Shareholders’ approval is required for the adoption of the Share Option Schemes.

C. FURTHER INFORMATION ON THE PROPOSED SPIN-OFF

1. Overview

The final structure (including the price range) of the Proposed Spin-off has not yet been confirmed and will be decided subsequently by the Directors, the directors of DCH Holdings and the Global Coordinator, but is currently expected to be effected by way of the Global Offering which will comprise the Public Offer, the International Placing and the Preferential Offer, and will be accompanied by a separate listing of DCH Shares on the Main Board.

The Global Offering is expected to comprise sale of Sale DCH Shares held by the Selling Shareholder and offer of New DCH Shares to be issued by DCH Holdings. The total number of issued DCH Shares upon completion of the Proposed Spin-off is proposed to be 1,800,000,000 DCH Shares. The number of Sale DCH Shares and New DCH Shares subject to the Global Offering are tentatively proposed to be 601,200,000 DCH Shares and 180,000,000 DCH Shares respectively. These number of shares, the Offer Price, the exact size of the Global Offering, the exact apportionment between the Public Offer and the International Placing and the terms of the Underwriting Agreements are yet to be finally determined.

Upon the successful completion of the Proposed Spin-off, DCH Shares will be listed on the Main Board. Immediately after completion of the Proposed Spin-off, CITIC Pacific is expected to have approximately 56.6% interest in the enlarged issued share capital of DCH Holdings (assuming the Over-allotment Option and the options which may be granted under the Share Option Schemes are not exercised) or approximately 50.1% interest in the enlarged issued share capital of DCH Holdings (assuming the Over-allotment Option is exercised in full but assuming no options which may be granted under the Share Option Schemes are exercised). The DCH Shares in issue will rank pari passu in all respects with all other DCH Shares to be issued in due course pursuant to the Proposed Spin-off.

– 8 –

LETTER FROM THE BOARD

Subject to Rule 10.07 of the Listing Rules, CITIC Pacific will not:

• (a) in the period commencing on the date by reference to which disclosure of its shareholdings is made in the Prospectus and ending on the date which is 6 months from the Listing Date, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any DCH Shares of which it is the beneficial owner; or

• (b) in the period of 6 months commencing on the date on which the period referred to in (a) above expires, dispose of, nor enter into any agreement to dispose of or otherwise create any options, rights, interests or encumbrances in respect of, any DCH Shares if, immediately following such disposal or upon the exercise or enforcement of such options, rights, interests or encumbrances, CITIC Pacific would cease to be a controlling shareholder.

The Directors are of the view that CITIC Pacific complies with all the spin-off requirements under PN15, subject to the Shareholders passing an ordinary resolution at the Extraordinary General Meeting to approve the Proposed Spin-off.

The Proposed Spin-off is conditional on the conditions set out in the sub-section headed “7. Conditions” below.

2. Separate listing of DCH Shares

The Shares will continue to be listed on the Main Board after the implementation of the Proposed Spin-off. The listing of DCH Shares on the Main Board is conditional upon the fulfilment or waiver of the conditions stated in the sub-section headed “7. Conditions” below. On 7 September 2007, DCH Holdings submitted a formal application (Form C1) to the Stock Exchange for the listing of, and permission to deal in, DCH Shares in issue and any new DCH Shares to be issued pursuant to the Proposed Spin-off including any DCH Shares that may be issued pursuant to a capitalisation issue of shares of DCH Holdings and the exercise of the options to be granted under the Share Option Schemes.

Subject to the granting of the listing of, and permission to deal in, DCH Shares on the Main Board as well as compliance with the stock admission requirements of HKSCC, DCH Shares are expected to be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of listing of DCH Shares or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

– 9 –

LETTER FROM THE BOARD

3. Proceeds and intended use thereof

The total net proceeds of the Global Offering, after deducting underwriting fees and related expenses (assuming the Over-allotment Option is not exercised), are estimated to be in the range of HK$3.3 billion to HK$4.3 billion on the basis that DCH Holdings’ market capitalisation will be valued between approximately HK$8.19 billion and approximately HK$10.584 billion as advised by the Sponsor. The net proceeds will be payable to CITIC Pacific and DCH Holdings respectively in proportion to the number of Sale DCH Shares and New DCH Shares subject to the Global Offering, which is tentatively decided to be in the ratio of 601,200,000:180,000,000.

In the event that the Over-allotment Option is exercised in full, the net proceeds of the Global Offering will be in the range of approximately HK$3.8 billion to HK$5.0 billion (after deducting proportionate underwriting fees and related expenses).

CITIC Pacific currently plans to use such net proceeds for investment in its core business.

DCH Holdings currently plans to use such net proceeds as follows:

• approximately 46% will be spent over the next three years for expansion of DCH Group’s motor vehicle business;

• approximately 23% will be spent over the next three years for expansion of DCH Group’s food and consumer products trading business;

• approximately 30% will be spent over the next three years for expansion of DCH Group’s logistics and food supply chain business; and

• the balance in an amount of not more than 10% of the aggregate proceeds as funding for general working capital and general corporate uses.

4. Effects of the Proposed Spin-off

(a) Shareholding structure

The following chart sets out the corporate structure of DCH Holdings, including its shareholders and principal subsidiaries, immediately upon Listing (assuming the Overallotment Option and the options which may be granted under the Share Option Schemes are not exercised). Upon completion of the Proposed Spin-off, DCH Holdings will remain a subsidiary of CITIC Pacific.

– 10 –

LETTER FROM THE BOARD

==> picture [455 x 610] intentionally omitted <==

– 11 –

LETTER FROM THE BOARD

(b) Financial effects of the Proposed Spin-off

(i) Net assets

The audited consolidated net assets after deducting minority interests of the Group was approximately HK$39,103 million and approximately HK$46,510 million as at 31 December 2005 and 31 December 2006 respectively. The audited net asset after deducting minority interests of DCH Group as at 31 December 2005 and 31 December 2006 were approximately HK$3,377 million and approximately HK$3,656 million respectively.

The Board expects that CITIC Pacific will recognise a gain resulting from disposal of Sale DCH Shares and the issuance of New DCH Shares upon completion of the Proposed Spin-off. Based on the audited consolidated net assets (after deducting minority interest) of DCH Group as at 31 December 2006, the estimated market capitalisation of DCH Holdings in the range of approximately HK$8.19 billion and approximately HK$10.584 billion, a pre-listing dividend to be declared by DCH Holdings of HK$0.9 billion, and the current proposed structure of the Global Offering, the amount of gain to CITIC Pacific resulting from the Proposed Spin-off is estimated to be approximately in the range of HK$1.8 billion and HK$2.7 billion if the Overallotment Option is not exercised, or approximately in the range of HK$2.1 billion and HK$3.1 billion if the Over-allotment Option is exercised in full. However, it should be noted that the aforesaid gain is estimated based on a number of assumption, including, among other things, the actual pricing, the Global offering was completed on 31 December 2006 and has not taken into account the financial position of the DCH Group after 31 December 2006. Accordingly, the actual gain to be recognized by the Group, which will be calculated by reference to the financial position of the DCH Group at the time of completion of the Global offering, may be different from the above estimation. Assuming the Proposed Spin-off is completed by the end of December 2007, such gain will be recognised in the results of CITIC Pacific for the year ended 31 December 2007. The net assets (after deducting minority interest) of the Group are therefore, among other things, expected to be increased by the same amount of such gain.

(ii) Earnings

The effect of the Proposed Spin-off on the future earnings of the Group will depend on, among other things, the return generated from the proceeds raised from the Global Offering as well as the growth of the business operations of DCH Group.

Following completion of the Proposed Spin-off, the Group’s earnings contributed from DCH Group are expected to be reduced as CITIC Pacific’s interest in DCH Holdings will be reduced from 100% to approximately 56.6% (assuming the Overallotment Option and the options which may be granted under the Share Option Schemes are not exercised). Should the Over-allotment Option be exercised in full, CITIC Pacific’s interest in DCH Group will be further diluted to approximately 50.1% following completion of the Proposed Spin-off.

– 12 –

LETTER FROM THE BOARD

The audited consolidated profits attributable to the shareholders of DCH Holdings for the three financial years ended 31 December 2004, 2005 and 2006 were HK$238 million, HK$242 million and HK$322 million respectively. The audited consolidated profits before taxation of DCH Holdings for the three financial years ended 31 December 2004, 2005 and 2006 were HK$292 million, HK$334 million and HK$426 million, respectively.

The audited consolidated profits attributable to the shareholders of CITIC Pacific (excluding the interest of CITIC Pacific in DCH Holdings) for the three financial years ended 31 December 2004, 2005 and 2006 were HK$3,296 million, HK$3,747 million and HK$7,950 million, respectively.

Upon completion of the Proposed Spin-off, DCH Holdings will remain as a subsidiary of the Company. Accordingly, the financial results of DCH Group will continue to be consolidated into those of the Group.

(c) General

Shareholders are recommended to consult their professional advisers if they are in any doubt as to the tax or other financial implications of the Proposed Spin-off. It is emphasised that none of CITIC Pacific, DCH Holdings or their respective professional advisers or any other parties involved in the Proposed Spin-off or their respective directors or employees will accept any responsibility for any tax or financial effect on, or liabilities of, the Shareholders.

5. Reasons for and benefits of the Proposed Spin-off

The Board proposes the separate listing of DCH Holdings as it believes that the separate listing of DCH Holdings will be beneficial to the Group for the following reasons:

• the Proposed Spin-off could unlock the value of DCH Holdings and investors would be able to appraise and assess the performance and potential of DCH Holdings separate and distinct from that of CITIC Pacific. CITIC Pacific is expected to remain a major shareholder of DCH Holdings after the listing, and to benefit from any enhanced value of DCH Holdings through the Proposed Spin-off; and

• the Proposed Spin-off is expected to comprise sale of the Sale DCH Shares and subscription of the New DCH Shares. Proceeds from the sale and subscription may also provide funding to the Group and DCH Holdings to make further development in their businesses respectively.

The Board also considers that such listing will also be beneficial to DCH Group for the following reasons:

• It provides flexibility to the DCH Group in raising future funds from the capital markets to support its growth through continuing organic expansion as well as acquisitions.

• It enables the DCH Group to take advantage of the significant global growth potential by attracting new investors who are seeking investment opportunities in a conglomerate engaged in a broad range of businesses.

– 13 –

LETTER FROM THE BOARD

6. Relationship between the Retained Group and DCH Group

The Shares were listed on the Stock Exchange in 1986. The principal businesses and operations of the Retained Group comprise manufacturing of special steel, iron ore mining, property development and investment, and infrastructure (such as power generation, aviation, civil infrastructure and communications).

DCH Group is a diversified business conglomerate in motor vehicle sales, motor vehicle-related business and services, sales of food and consumer products, as well as logistics services supported by integrated distribution platforms and with a well-established base and network in Mainland China, Hong Kong and Macao.

As of the Latest Practicable Date, CITIC Pacific is beneficially interested in 100% of the issued share capital of DCH Holdings. Immediately following completion of the Proposed Spinoff, CITIC Pacific will own 56.6% of the issued share capital of DCH Holdings (assuming that the Over-allotment Option is not exercised) or approximately 50.1% of the issued share capital of the Company (assuming that the Over-allotment Option is exercised in full) and DCH Holdings will remain a subsidiary of CITIC Pacific.

The Board is satisfied that DCH Holdings can carry on business independently of the Retained Group and its associates after the Listing. Detailed information on DCH Holdings’ management composition and relationship with CITIC Pacific will be set out in the Prospectus.

CITIC Pacific is expected to execute a non-competition undertaking in favour of DCH Holdings to the effect that at any time during which DCH Shares are listed on the Stock Exchange and for so long as CITIC Pacific and its associates together hold, whether individually or taken together, 30% or more of the issued share capital of DCH Holdings or are otherwise regarded as a controlling shareholder of DCH Holdings under the Listing Rules, (i) CITIC Pacific will not engage, and will procure its subsidiaries (excluding DCH Holdings, CITIC 1616 Holdings Limited and their respective subsidiaries) not to engage, on its own account or with each other or in conjunction with or on behalf of any person, firm or company, carry on or be engaged in, concerned with or interested in, directly or indirectly, whether as a shareholder (other than being a director or a shareholder of DCH Holdings, CITIC 1616 Holdings Limited and their respective subsidiaries), partner, agent or otherwise, in the trading and distribution of motor vehicles, food commodities, fast moving consumer goods and consumer products and provision of logistics services as now engaged in by the DCH Holdings and to be disclosed in the Prospectus, or in any other business that may compete, directly or indirectly, with such business (“ Restricted Activity ”); and (ii) in the event that any opportunity is made available to CITIC Pacific to invest in any independent third party business which is engaged in the Restricted Activity (an “ Investment Opportunity ”), CITIC Pacific will use its best efforts to procure that such Investment Opportunity is offered to the DCH Group and the DCH Group shall have a right of first refusal in respect of such Investment Opportunity.

– 14 –

LETTER FROM THE BOARD

The restrictions which CITIC Pacific agreed to undertake as mentioned above do not apply to the following:

• (a) Restricted Activity conducted by joint ventures between CITIC Pacific and Wal-Mart China from time to time where CITIC Pacific does not have management control and the right to appoint the majority of the board of directors; or

• (b) CITIC Pacific or its associates holding or being interested in shares or other securities in any company which conducts or is engaged in any Restricted Activity (a “ Subject Company ”); provided that (i) such shares or securities are listed on a recognised stock exchange and (ii) the aggregate equity interest or number of shares held by CITIC Pacific and its associates do not exceed 10% of the issued capital or issued shares of the Subject Company, and (iii) CITIC Pacific and its associates do not have board or management control of the Subject Company.

It is CITIC Pacific’s stated strategy to pursue development of its core businesses, which it actively manages to leverage off its expertise, such as special steel manufacturing, iron ore mining, property development and investment, and power generation. CITIC Pacific intends to hold its remaining interest in DCH Holdings after completion of the Proposed Spin-off as a long term investment. The non-competition undertaking proposed to be given by CITIC Pacific as set out above provides a clear delineation between the business of CITIC Pacific and DCH Holdings going forward, and CITIC Pacific does not expect there to be any material adverse impact on CITIC Pacific as a result.

7. Conditions

Pursuant to the Listing Rules, DCH Holdings is regarded as a major subsidiary of CITIC Pacific. The reduction of CITIC Pacific’s equity interests in DCH Holdings as a result of the Proposed Spin-off is considered to be material and will constitute a discloseable transaction of CITIC Pacific under the Listing Rules. The Proposed Spin-off will be conditional upon, among other things, the following:

• (i) the Shareholders passing an ordinary resolution at the Extraordinary General Meeting to approve the Proposed Spin-off;

• (ii) publication of the Prospectus;

• (iii) the Listing Committee granting approval for the listing of, and permission to deal in, all the DCH Shares in issue and to be issued pursuant to the Global Offering and any DCH Shares which may be issued pursuant to the exercise of the options granted under the Share Option Schemes;

• (iv) the Offer Price having been agreed between the Selling Shareholder, DCH Holdings and the Global Coordinator (on behalf of the Underwriters) and the due execution and delivery of the Underwriting Agreements; and

• (v) the Underwriting Agreements becoming and remaining unconditional (including, if relevant, as a result of the waiver of any conditions by the Global Coordinator, on behalf of the Underwriters) and such obligations not being terminated in accordance with the terms of the Underwriting Agreements, on or before the dates and times to be specified therein.

– 15 –

LETTER FROM THE BOARD

If the above conditions and other applicable conditions are not fulfilled or waived prior to the dates and times to be specified, the Proposed Spin-off will not proceed and the Stock Exchange will be notified immediately and an announcement will be published by CITIC Pacific as soon as practicable thereafter.

D. PREFERENTIAL OFFER

It has been proposed that, if and when the Proposed Spin-off materialises, Qualifying Shareholders shall be entitled to subscribe on an assured basis at the Offer Price for one Reserved Share for every whole multiple of 25 existing Shares held by them on 3 October 2007 (i.e. the Record Date).

Subject to the Proposed Spin-off becoming unconditional, sufficient number of Reserved Shares will be made available for subscription by Qualifying Shareholders at the Offer Price under the Preferential Offer.

It is currently estimated that the Qualifying Shareholders are entitled to subscribe on an assured basis at the Offer Price for one Reserved Share for every whole multiple of 25 existing Shares held by them as at 4:30 p.m. on the Record Date. However, the aforesaid is only an estimate and the final Assured Entitlement will depend on the number of Shares held by Qualifying Shareholders on the Record Date.

With a view to maximising the percentage of DCH Shares in the hands of the public immediately after the Global Offering, CITIC HK, Mr.Yung Chi Kin (Chairman of CITIC Pacific) and Mr. Fan Hung Ling (Managing Director of CITIC Pacific) have indicated that they (together with subsidiaries of CITIC HK) would not take up any Reserved Shares to the extent that they are Qualifying Shareholders and DCH Holdings will not allocate any Reserved Shares to them.

In order to apply for the Reserved Shares under the Preferential Offer, Qualifying Shareholders will be required to complete a blue application form which will be despatched, together with an electronic copy of the Prospectus on CD-ROM, in due course to each Qualifying Shareholder who is entitled to apply for the Reserved Shares.

The Prospectus, if and when despatched to Shareholders, will be in electronic copy on CDROM. The Prospectus, if and when published, will also be posted on the Stock Exchange’s website at www.hkex.com.hk. No printed copies of the Prospectus will be despatched to Shareholders.

Overseas Shareholders who are excluded in compliance with the requirements set out in Rule 13.36(2) of the Listing Rules will not be entitled to any Reserved Shares. Any Qualifying Shareholder holding less than 25 Shares will not be entitled to apply for the Reserved Shares on an assured basis. Qualifying Shareholders will be permitted to apply for a number of Reserved Shares which is greater than, less than, or equal to, their Assured Entitlements under the Preferential Offer. A valid application in respect of a number of Reserved Shares less than or equal to a Qualifying Shareholder’s Assured Entitlement will be accepted in full, subject to the terms and conditions set out in the Prospectus and the blue application forms.

Where a Qualifying Shareholder applies for a number of Reserved Shares which is greater than his or her Assured Entitlement, his or her Assured Entitlement will be satisfied in full, subject as mentioned above, but the excess portion of such application will only be met to the extent that there are sufficient available Reserved Shares resulting from other Qualifying Shareholders with an Assured Entitlement declining to take up all or some of their Assured Entitlements.

– 16 –

LETTER FROM THE BOARD

Qualifying Shareholders may, in addition to applying for Reserved Shares, also make one application for DCH Shares under either the International Placing or the Public Offer. The Global Coordinator, on behalf of the underwriters, will allocate any Reserved Shares not taken up by Qualifying Shareholders first to satisfy the excess applications for the Reserved Shares from Qualifying Shareholders by way of balloting on a fair and reasonable basis (which would mean that some applicants may be allotted more DCH Shares than others who have made excess application in respect of the same number of DCH Shares and that applicants who are not successful in the ballot may not receive any DCH Shares beyond the Assured Entitlement), and thereafter, at the discretion of the Global Coordinator, to the Public Offer. Save for the above, the Preferential Offer will not be subject to the clawback arrangement between the International Placing and the Public Offer.

Shareholders should note that Assured Entitlements to Reserved Shares may not represent a multiple of a full board lot, which is currently proposed to be 1,000 DCH Shares, and will be rounded down to the closest whole number if required, and that dealings in odd lots of DCH Shares may be at a price below the prevailing market price for full board lots. Assured Entitlements to the Reserved Shares will not be transferable and there will be no trading in nil paid entitlements on the Stock Exchange. Any DCH Shares issued pursuant to the Preferential Offer will be deemed fully paid and ranked pari passu in all respects with other DCH Shares then in issue.

E. CLOSURE OF REGISTER

The register of members of CITIC Pacific will be closed from 9:00 a.m. to 4:30 p.m. on 3 October 2007 (or such later date(s) as the Board may determine and announce) for the purpose of determining the entitlement of Qualifying Shareholders to the Preferential Offer. No transfer of Shares may be registered during that period. The last day for dealing in the Shares cum-entitlements to the Preferential Offer is expected to be on 27 September 2007. In order to qualify for the Preferential Offer, all transfers must be lodged with the Registrar by no later than 4:30 p.m. on 2 October 2007 (or such later date as the Board may determine and announce).

F. SHARE OPTION SCHEMES

It is proposed that DCH Holdings will adopt two share option schemes, namely, the Pre-IPO Share Option Scheme and the Post-IPO Share Option Scheme. The purpose of the Share Option Schemes is to attract and retain the best quality personnel for the development of DCH Holdings’ businesses; to provide additional incentives to DCH Employees and to promote the long term financial success of DCH Holdings by aligning the interests of Grantees to holders of DCH Shares. The adoption of the Share Option Schemes will enable DCH Holdings to recognise the contributions of certain directors and employees of DCH Group and to incentivise them going forward. The Pre-IPO Share Options are proposed to be granted prior to completion of the Proposed Spin-off to recognise the contributions of certain directors and employees of DCH Group to the growth of DCH Group and to incentivise them going forward.

The subscription price per DCH Share of the Pre-IPO Share Options will be the Offer Price. No options will be offered or granted under the Pre-IPO Share Option Scheme after commencement of dealings in DCH Shares on the Stock Exchange.

No options will be granted under the Post-IPO Share Option Scheme prior to the commencement of dealings in DCH Shares on the Stock Exchange.

– 17 –

LETTER FROM THE BOARD

Insofar as CITIC Pacific is concerned, the Share Option Schemes constitute share option schemes governed by Chapter 17 of the Listing Rules. The adoption of each Share Option Schemes needs to be approved by the Shareholders passing an ordinary resolution at the Extraordinary General Meeting to approve the relevant Share Option Schemes.

On each grant of options under the Share Option Schemes, the board of directors of DCH Holdings will specify the subscription price and any minimum holding period or performance targets which apply to the options. These criteria will enable the board of directors of DCH Holdings to provide appropriate incentive and reward to grantees of the options. A summary of the principal terms of the Share Option Schemes is set out in Appendix I to this circular.

The Directors consider that it is not appropriate to state the value of all options that can be granted pursuant to the Post-IPO Share Option Scheme as if they had been granted at the Latest Practicable Date. The Directors believe that any statement regarding the value of the options as at the Latest Practicable Date will not be meaningful to Shareholders, taking into account the number of variables which are crucial for the calculation of the option value which have not been determined. Such variables include the exercise price, exercise period, any lock-up period, any performance targets set and other relevant variables.

Subject to adoption of the Pre-IPO Share Option Scheme, options will be proposed to be granted under the Pre-IPO Share Option Scheme to recognise the contributions of certain directors and employees of the DCH Group to the growth of DCH Group and to incentivise them going forward. As at the latest Practicable Date, options to subscribe for an aggregate of 18,000,000 DCH Shares at a subscription price equal to the Offer Price are proposed to be granted to about 64 grantees under the Pre-IPO Share Option Scheme, details of such grant will be set out in the Prospectus.

The valuation of options to be granted under the Pre-IPO Share Option Scheme was conducted based on the Binomial Model by Watson Wyatt with the following data and assumptions:

Scenario	1	2	3
Assumed Share Price at the Grant
Date/Exercise Price	HK$4.55	HK$5.22	HK$5.88
Contractual Life		5 years
Expected Volatility		30% per annum
Expected Dividend		2% per annum
Rate of Leaving Service		4% per annum
Early Exercise Assumption	Option holders will exercise their options when the share
	price is at least 160% of the exercise price
Risk-free Rate of Interest		4.38% per annum

Notes:

• (i) The volatility rate of the share price of DCH Holdings was determined with reference to the historical movements of its comparators’ share prices.

• (ii) Taking into account the probability of early exercise behaviour and rate of leaving service stated above, the average expected term of the Grant was determined to be 3.5 years.

• (iii) The risk-free rate of interest with expected term shown above was taken to be the linearly interpolated yield of the Hong Kong Exchange Fund Notes as at 24 July 2007.

– 18 –

LETTER FROM THE BOARD

The fair values per share of option for Scenario 1, 2 and 3 are HK$1.08, HK$1.24 and HK$1.40 respectively.

The result of the Binomial Model can be materially affected by changes in the aforesaid assumptions so an option’s actual value may differ from the estimated fair value of the options due to limitations of the Model.

All the options forfeited before expiry of the Pre-IPO Share Option Scheme will be treated as lapsed options which will not be added back to the number of shares available to be issued under the Pre-IPO Share Option Scheme. The options granted under the Pre-IPO Share Option Scheme are only exercisable 6 months after the Listing Date.

Each option has a 5-year exercise period from the date of the offer of the option. Save for the number of DCH Shares which may be subscribed for pursuant to the exercise of options and the vesting periods of the options granted, each option so granted under the Pre-IPO Share Option Scheme has the same terms and conditions.

Save as disclosed above, no options have been granted or agreed to be granted by DCH Holdings under the Pre-IPO Share Option Scheme as at the Latest Practicable Date.

G. EXTRAORDINARY GENERAL MEETING

As the interests of all Shareholders (including the controlling shareholder of CITIC Pacific) in relation to the Proposed Spin-off are not different, all Shareholders are entitled to vote on the Proposed Spin-off. All Shareholders are also entitled to vote on the adoption of the Share Option Schemes.

A notice convening the Extraordinary General Meeting to be held on Wednesday, 3 October 2007 at 3:30 p.m. at Island Ballroom, Level 5, Island Shangri-La Hotel, Two Pacific Place, Supreme Court Road, Hong Kong is set out at the end of this circular. Whether or not you intend to attend the Extraordinary General Meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the share registrars of CITIC Pacific at 26/F., Tesbury Centre, 28 Queen’s Road East, 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 Extraordinary 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 Extraordinary General Meeting or any adjournment thereof should you so wish.

H. RECOMMENDATIONS

The Directors are of the view that the terms of the Proposed Spin-off and the Share Option Schemes are fair and reasonable so far as the Shareholders are concerned and in the interests of the Company and the Shareholders as a whole and accordingly recommend the Shareholders to vote in favour of the ordinary resolutions to approve the Proposed Spin-off and transactions contemplated thereunder and the Share Option Schemes as set out in the notice of Extraordinary General Meeting at the end of this circular.

Your attention is drawn to (a) the letter from the Independent Board Committee set out on page 21 of this circular which contains the recommendation of the Independent Board Committee to the Shareholders regarding the Proposed Spin-off, and (b) the letter from Commerzbank containing its

– 19 –

LETTER FROM THE BOARD

advice and the principal factors and reasons taken into consideration by them in arriving at its advice regarding the Proposed Spin-off is set out on pages 22 to 35 of this circular. The Directors fully agree with the advice of Commerzbank.

The Independent Board Committee comprises Mr. Alexander Reid Hamilton and Mr. Hansen Loh Chung Hon. Mr. Hamilton Ho Hau Hay, an independent non-executive director of CITIC Pacific, is also a non-executive director of DCH Holdings. Mr. Norman Ho Hau Chong, another independent non-executive director of CITIC Pacific, is the brother of Mr. Hamilton Ho Hau Hay. To avoid any appearance of conflict of interests, both Mr. Ho have agreed not to sit on the Independent Board Committee.

The Independent Board Committee, having taken into account the advice of Commerzbank, considers that the Proposed Spin-off is fair and reasonable and in the interests of CITIC Pacific and the Shareholders as a whole.

Accordingly, the Independent Board Committee recommends the Shareholders to vote in favour of the ordinary resolutions to be proposed at the Extraordinary General Meeting to approve, if thought fit, the Proposed Spin-off and the transactions contemplated thereunder.

I. GENERAL

BNP Paribas has been appointed as the Global Coordinator and Sponsor of the Global Offering. The Board expects that the Prospectus containing, among other matters, details of the Preferential Offer (including the basis of allocation) will be despatched to Qualifying Shareholders in due course.

J. ADDITIONAL INFORMATION

This circular is being distributed to Shareholders only. This circular does not constitute an offer or invitation to subscribe for or purchase any securities nor is it calculated to invite any such offer or invitation. Neither this circular nor anything contained herein shall form the basis of any contract or commitment whatsoever.

In connection with the Global Offering, the price of DCH Shares may be stabilised in accordance with the Securities and Futures (Price Stabilizing) Rules (Chapter 571W of the Laws of Hong Kong). Details of any intended stabilisation and how it will be regulated under the SFO will be contained in the Prospectus.

Your attention is drawn to the additional information contained in the appendices to this circular.

Yours faithfully, By Order of the Board CITIC Pacific Limited Larry Yung Chi Kin Chairman

– 20 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [189 x 61] intentionally omitted <==

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 267)

17 September 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION IN RELATION TO THE PROPOSED SPIN-OFF AND SEPARATE LISTING OF DAH CHONG HONG HOLDINGS LIMITED ON THE MAIN BOARD OF THE STOCK EXCHANGE OF HONG KONG LIMITED AND PROPOSED SHARE OPTION SCHEMES FOR DAH CHONG HONG HOLDINGS LIMITED

We have been appointed as members of the Independent Board Committee to advise you in connection with the Proposed Spin-off, details of which are set out in the “Letter from the Board” in the circular dated 17 September 2007 (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as given to them in the Circular unless the context otherwise requires.

Your attention is also drawn to the “Letter from Commerzbank” concerning its advice to us regarding the Proposed Spin-off as set out on pages 22 to 35 of the Circular. Having considered the advice given by Commerzbank, and the principal factors and reasons taken into consideration by Commerzbank in arriving at its advice, we are of the opinion that the terms of the Proposed Spin-off are fair and reasonable so far as the Shareholders are concerned and that the Proposed Spin-off is in the interests of CITIC Pacific and the Shareholders as a whole. We, therefore, recommend the Shareholders to vote in favour of the relevant ordinary resolution(s) to be proposed at the Extraordinary General Meeting as set out in the notice convening such meeting set out at the end of the Circular.

Yours faithfully,

For and on behalf of the

Independent Board Committee

Alexander Reid Hamilton Hansen Loh Chung Hon Independent Independent Non-Executive Director Non-Executive Director

– 21 –

LETTER FROM COMMERzBANK

==> picture [453 x 69] intentionally omitted <==

17 September 2007

To: the Independent Board Committee and the Shareholders of CITIC Pacific Limited

Dear Sirs

PROPOSED SPIN-OFF AND SEPARATE LISTING OF DAH CHONG HONG HOLDINGS LIMITED ON THE MAIN BOARD OF THE STOCK EXCHANGE

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Shareholders in connection with the Proposed Spin-off of DCH Holdings, a wholly-owned subsidiary of the Company. Details of the Proposed Spin-Off, including the proposed structure of the Global Offering, are set out in the letter from the Board as contained in the circular to the Shareholders dated 17 September 2007 (the “Circular”) of which this letter forms a part. Unless otherwise defined herein, terms used in this letter shall have the same meanings as those defined in the Circular.

DCH Group is a diversified business conglomerate principally engaged in (i) sales of motor vehicles, motor vehicle related business and services; (ii) sales of food and consumer products, as well as (iii) logistics services, supported by integrated distribution platforms by leveraging a well-established network in the PRC, Hong Kong and Macao. As disclosed in the Circular, the Proposed Spin-off and the Global Offering will result in the separate listing of the DCH Shares on the Main Board of the Stock Exchange and it is expected that the Company’s interests in the enlarged issued share capital of DCH Holdings are expected to decrease to approximately 56.6% (assuming the Over-allotment Option is not exercised) or 50.1% (assuming the Over-allotment Option is exercised in full). Since each of the total assets and revenue of DCH Holdings represents more than 5% of the Company’s consolidated total assets and revenue, respectively, DCH Holdings is considered a major subsidiary of the Company under the Listing Rules. In addition, as the relevant percentage ratios (as defined under the Listing Rules) with respect to the Proposed Spin-off is expected to be more than 5% but less than 25%, the Proposed Spin-off will constitute a material dilution of the Company’s interest in DCH Holdings and a discloseable transaction under Chapter 14 of the Listing Rules. Accordingly, the Proposed Spin-off is subject to approval from the Shareholders under paragraph 3(e)(1)(ii) of Practice Note 15 of the Listing Rules.

The Board currently comprises 18 Directors, with Messrs. Larry Yung Chi Kin, Henry Fan Hung Ling, Peter Lee Chung Hing, Carl Yung Ming Jie, Leslie Chang Li Hsien, Vernon Francis Moore, Li Shilin, Liu Jifu, Chau Chi Yin, Milton Law Ming To and Wang Ande as the executive Directors; Messrs. Willie Chang, André Desmarais, Chang Zhenming and Peter Kruyt (an alternate Director to Mr. André Desmarais) as the non-executive Directors, and Messrs. Hamilton Ho Hau Hay, Alexander Reid Hamilton, Hansen Loh Chung Hon and Norman Ho Hau Chong as the independent non-

– 22 –

LETTER FROM COMMERzBANK

executive Directors. Since Mr. Hamilton Ho Hau Hay is the non-executive director of DCH Holdings and Mr. Norman Ho Hau Chong is the brother of Mr. Hamilton Ho Hau Hay, to avoid any appearance of conflict of interests, both Mr. Hamilton Ho Hau Hay and Mr. Norman Ho Hau Chong have agreed not to sit on the Independent Board Committee. Accordingly, an Independent Board Committee comprising only Messrs Alexander Reid Hamilton and Hansen Loh Chung Hon has been formed for the purpose of making recommendation to the Shareholders as to whether the terms of the Proposed Spin-off are fair and reasonable and whether the Proposed Spin-off is in the interest of the Company and the Shareholders as a whole and advising the Shareholders as how they should vote on the relevant resolutions relating to the Proposed Spin-off at the Extraordinary General Meeting (“EGM”). We, Commerzbank AG Hong Kong Branch, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Shareholders on the terms of the Proposed Spin-off and as to whether they are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

In formulating our recommendation, we have relied on the information and facts supplied to us by the Company. We have assumed that all information and facts supplied to us by the Company are true, complete and accurate in all material respects and we have relied on the same. Also, we have relied on the representations made by the Directors that having made all due enquiries and careful decisions, and to the best of their information, knowledge and belief, there is no other fact or representation or the omission of which would make any statement contained in the Circular misleading. In addition, we have reviewed, inter alia, the relevant financial information of DCH Holdings and the Company including the published annual report of the Company. We have also assumed that all information, statements and representations made or referred to in the Circular, which have been provided to us by the Company, and for which it is wholly responsible, are true, complete and accurate in all material respects at the time they were made and continue to be so at the date of despatch of the Circular.

We consider that we have (i) taken reasonable steps as required under Rule 13.80 of the Listing Rules in obtaining all necessary information from the Company and (ii) reviewed sufficient information to enable us to reach an informed view regarding the Proposed Spin-off to provide us with a reasonable basis for our recommendation. We have no reason to suspect that any material facts have been omitted or withheld, nor are we aware of any facts or circumstances, which would render the information and the representations made to us untrue, inaccurate or misleading. We have not, however, carried out any independent verification of the information provided by the Company; nor have we conducted any independent in-depth investigation into the business and affairs of the Company and its respective associates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion in relation to the Proposed Spin-off, and giving our independent financial advice to the Independent Board Committee and the Shareholders, we have taken into account the following principal factors:

1. Principal Business Activities of the Group and the DCH Group

The Group has a long operating history and the Shares were listed on the Stock Exchange in 1986. The principal business operations of the Group comprise five well established businesses, namely, manufacturing of special steel, iron ore mining, property development and investment, infrastructure (such as power generation, aviation, civil infrastructure and communications) and marketing and distribution. Over the past three years, the Group recorded turnover of approximately HK$22,912 million, HK$26,564 million and HK$47,049 million for the years ended

– 23 –

LETTER FROM COMMERzBANK

31 December 2004, 2005 and 2006, respectively. For the years ended 31 December 2004, 2005 and 2006, the profit attributable to Shareholders amounted to approximately HK$3,534 million, HK$3,989 million and HK$8,272 million respectively.

DCH Group also has a long operating history and is a diversified business conglomerate principally engaged in (i) motor vehicles sales, motor vehicle related business and services; (ii) sales of food and consumer products, as well as (iii) logistics services, supported by integrated distribution platforms and a well-established base and network in the PRC, Hong Kong and Macao. For the three years ended 31 December 2004, 2005 and 2006, the audited consolidated net profits attributable to the shareholders of DCH Holdings amounted to approximately HK$238 million, HK$242 million and HK$322 million, respectively, and the audited consolidated net assets (after deducting minority interest) of the DCH Group as at 31 December 2005 and 2006 amounted to approximately HK$3,377 million and HK$3,656 million respectively. Set out below is the brief description of DCH Group’s principal business:

(i) Sale of motor vehicles and provision of related services

DCH Group is one of the largest major distributors in Hong Kong and distributes a wide range of vehicles. DCH Group has been granted distributorship for 11 brands of motor vehicles in Hong Kong, comprising various middle to upper class of European and Japanese vehicles brands and accounted for approximately 27% of the brand new vehicle market in Hong Kong in 2006. In addition, DCH Group distributes 17 imported and domestically manufactured vehicles brands in the PRC through its subsidiaries and contractual arrangements with local partners, including 29 4S outlets in 10 major cities in the PRC where 21 of which are operated under city dealership. DCH Group is now a leading motor group in Hong Kong and Macao and is pursuing a strategy to be one of the leaders on the PRC market.

In addition to selling motor vehicles, DCH Group also provides an extensive range of motor related services such as after sales service and inspection, parts retail and distribution, leasing and fleet management, and aviation ground supporting services.

(ii) Trading and distribution of food and consumer products

DCH Group is a major distributor of over 500 food commodities from various countries, such as frozen beef from United States of America and frozen pork and poultry from Brazil, and approximately 700 fast moving consumer goods from 28 countries, such as sports drink, tonic drink and confectionery. DCH Group also has an extensive distribution network comprising more than 5,000 customers in Hong Kong and Macao, and more than 10,000 customers in the PRC, which are mainly in the food service, retail and wholesale industries in the PRC, Hong Kong and Macao as well as overseas markets in Japan and Singapore. In addition, DCH Group has a significant presence in the Hong Kong frozen food retail market with its 48 DCH Food Mart outlets and 4 DCH Food Mart Deluxe outlets.

(iii) Logistics services

Leveraging on the well established core businesses of DCH Group which provided DCH Group with a diversified and broad client base and customer information database as well as a well developed distribution network to serve its existing businesses and third party

– 24 –

LETTER FROM COMMERzBANK

customers, including but not limited to fast moving consumer goods (“FMCG”) suppliers, food service operators, retailers and hoteliers. As such, the Group sees great potential for growth in its logistics business as its customer base provides a one-stop brand building and penetration platform to the Hong Kong, Macao and the PRC markets for FMCG brand owners, especially in the imported branded food products segment. Coupled with the Group’s strong national distribution network in the PRC, the Group aims to provide food supply chain management services to its customers in the catering and hospitality sectors. As consumer spending in the PRC continues to increase and more manufacturers opt to outsource their logistics procurement operations to professional logistics services providers, the Group believes that supply chain management services and logistics business offer strong growth potential in the coming years.

2. Benefits of the Proposed Spin-off

As disclosed in the section headed “Letter from the Board” in the Circular, the Global Offering is expected to comprise sale of Sale DCH Shares held by the Company and offer of New DCH Shares to be issued by DCH Holdings. The total number of issued DCH Shares upon completion of the Proposed Spin-off is proposed to be 1,800,000,000 DCH Shares. The number of Sale DCH Shares and New DCH Shares (assuming the Over-allotment Option is not exercised) are tentatively to be 601,200,000 Sale DCH Shares and 180,000,000 New DCH Shares respectively. However, as the final structure of the Proposed Spin-off has not yet been confirmed, the above mentioned number of DCH Shares, the Offer Price, the exact size of the Global Offering, the exact apportionment between the Public Offer and the International Placing and the terms of the Underwriting Agreement are yet to be determined.

Based on the above proposed structure of the Global Offering, it is expected that immediately after completion of the Proposed Spin-off, the Company is expected to have approximately 56.6% interest in the enlarged issued share capital of DCH Holdings (assuming the Over-allotment Option is not exercised) or approximately 50.1% interest in the enlarged issued share capital of DCH Holdings (assuming the Over-allotment Option is exercised in full). On this basis, it is expected that the shareholding structure of DCH Holdings before and after the Proposed Spin-off will be as follows:

==> picture [337 x 23] intentionally omitted <==

----- Start of picture text -----

Shareholding Structure before Shareholding Structure after
the Proposed Spin-off the Proposed Spin-off
----- End of picture text -----

==> picture [92 x 38] intentionally omitted <==

==> picture [92 x 71] intentionally omitted <==

==> picture [201 x 38] intentionally omitted <==

==> picture [167 x 69] intentionally omitted <==

Note 1: percentage in brackets denotes the percentage of shareholding upon full exercise of the Over-allotment Option

Note 2: assuming no options granted under the Share Option Schemes are exercised

– 25 –

LETTER FROM COMMERzBANK

Despite the substantial deduction of the Company’s interest in the enlarged issued share capital of DCH Holdings, we consider both the Group and DCH Holdings will be benefited from the Proposed Spin-off for the following reasons:

(i) Delineation of business

Upon completion of the Proposed Spin-off, DCH Holdings will become a separate listed group (but is expected to remain as a subsidiary of the Company) and allows complete delineation of its trading and distribution business from the spectrum of businesses engaged by the Retained Group (as defined in the Circular). As such, it will enable the Retained Group to concentrate to develop the potentials of its other core business, whilst at the same time, DCH Group will be able to establish its identity and provide investors an opportunity to value and invest in DCH Holdings as a key market player in the trading and distribution industry.

(ii) Enhancing the financial flexibility of DCH Group

The Proposed Spin-off will enable DCH Holdings to raise its own equity/debt capital from the market and take advantages of its growth potential to attract new investors who are seeking investment opportunities in a conglomerate engaged in the business of motor vehicle and consumer goods business. Accordingly, it will provide DCH Group with additional financial flexibility and a more diversified funding sources to finance its existing operations, capital expenditure and to support its growth through continuing organic expansion as well as acquisition. All of these will lower the financial reliance of DCH Holdings on the Group, and the Retained Group will be able to deploy more of its internal resources for the development of its other core businesses.

(iii) Additional working capital from the proceeds of the Global Offering

As disclosed in the sub-section headed “Proceeds and intended use thereof” in the section headed “Letter from the Board” in the Circular, the Global Offering is expected to comprise sale of Sale DCH Shares owned by the Group and the offer of New DCH Shares to be issued. Assuming DCH Holdings’ market capitalisation will be valued in the range of approximately HK$8.2 billion to HK$10.6 billion, it is expected that, the total net proceeds of the Global Offering, after deducting the underwriting fees and related expenses (assuming the Over-allotment Option is not exercised), are estimated to be in the range of approximately HK$3.3 billion to HK$4.3 billion. The net proceeds payable to the Company and DCH Holdings will be respectively in the proportion to the number of Sale DCH Shares and New DCH Shares, which is tentatively decided to be in the ratio of 601,200,000:180,000,000. In the event that the Over-allotment Option is exercised in full, the net proceeds of the Global Offering will be increased to the range of approximately HK$3.8 billion to approximately HK$5.0 billion (after deducting proportionate underwriting fees and related expenses).

– 26 –

LETTER FROM COMMERzBANK

With regard to DCH Holdings, it is estimated that net proceeds in the range of approximately HK$0.8 billion to HK$1.0 billion will be obtained from the Global Offering. DCH Holdings intends to use such net proceeds from the Global Offering for the following purposes:

• approximately 46% for expansion of DCH Group’s motor vehicle business for the next three years;

• approximately 23% for expansion of DCH Group’s food and consumer products trading business for the next three years;

• approximately 30% for expansion of DCH Group’s logistics and food supply chain business for the next three years;

• the balance in an amount of not more than 10% of the aggregate proceeds as funding for general working capital and general corporate uses.

(iv) Share Option Schemes

As disclosed in the section headed “Letter from the Board” in the Circular, it is proposed that DCH Holdings will adopt the Share Option Schemes comprising the Pre-IPO Share Option Scheme and the Post-IPO Share Option Scheme. Except for those specified in Appendix I of the Circular, the principal terms of the Pre-IPO Share Option Scheme are substantially the same as the Post-IPO Share Option Scheme, and are mainly for purposes of attracting and retaining the best quality personnel for the development of DCH Holdings’ business and to provide additional incentives to employees of DCH Holdings and to promote the long term financial success of DCH Holdings by aligning the interests of the Grantees to the shareholders of DCH Holdings. Although it is noted that the Company has also had its own share incentive plan for similar purposes, the performance of the senior management and the employees of the DCH Group may not be readily reflected in the Share price. It is considered that the Share Option Schemes will provide greater incentive to the senior management and staff of the DCH Group to develop its business by making the performance of its business more transparent through the separate bench-marking from DCH Holdings’ stock performance and linking part of its management’s remuneration to its stock performance through the Share Option Schemes.

On the above basis, it is considered that despite there is a substantial dilution effect on the Group’s shareholding in DCH Holdings, the Proposed Spin-off will nevertheless (i) unlock the value of DCH Holdings and allow the Group to realise its investment in DCH Group over the past years; (ii) improve the overall management and organisation structure of the Group and (iii) provide additional funding to both the Retained Group and DCH Group for their respective future development. We therefore consider that the potential dilution of the Group’s interest in DCH Holdings is acceptable.

– 27 –

LETTER FROM COMMERzBANK

3. Effects of the Proposed Spin-off on the Group

As stated in the section headed “Letter from the Board” in the Circular, the exact size of the Global Offering is yet to be finalised. Accordingly, the financial effects of the Proposed Spin-off as discussed below are based on net proceeds to be raised from the Global Offering in the range of approximately HK$3.3 billion to approximately HK$4.3 billion (assuming Over-allotment Option is not exercised) or in the range of approximately HK$3.8 billion to approximately HK$5.0 billion (assuming the Over-allotment Option is exercised in full).

(i) Effect on the net assets

As stated in the section headed “Letter from the Board” in the Circular, based on the current structure of the Global Offering, the expected market capitalization of DCH Holdings and the proceeds from the Group’s sale of Sale DCH Shares, it is expected that the Group will recognise a once-off gain as a result from the sale of its DCH Sale Shares and the offer of New DCH Shares to be issued by DCH Holdings under the Proposed Spin-off and Global Offering following completion of the Proposed Spin-off. Assuming that the Proposed Spin-off was completed as at 31 December 2006, for illustration purpose only, gain from the Global Offering to be recognized by the Group is estimated as follows:

Consolidated audited net assets after deducting minority interest (Note 2) Adjusted by:pre-listing dividend to be declared by DCH Holdings Adjusted net asset value of DCH Holdings before the Global Offering Adjusted by:estimated net proceeds from the Global Offering obtained by DCH Holdings (Note 3) Adjusted audited net asset value of DCH Holdings after the Global Offering The Group’s attributable interest in the audited net asset of DCH Holdings upon completion of the Global Offering Estimated gain on the Global Offering (Note 4) Equity attributable to the Shareholders as at 31 December 2006 Percentage increase in the adjusted consolidated net asset value (after deducting the minority interest) of the Group after the Global Offering	Assuming the Over- allotment Option is not exercised HK$’ Billion (Note 1) 3.7 (0.9) 2.8 0.9 3.7 2.1 2.3 46.5 4.9%	Assuming the Over- allotment Option is exercised in full HK$’ Billion (Note 1) 3.7 (0.9) 2.8 0.9 3.7 1.9 2.6 46.5 5.6%

Note 1: assuming no options granted under the Share Option Schemes are exercised

Note 2: based on the audited financial statements of DCH Holdings

– 28 –

LETTER FROM COMMERzBANK

• Note 3: for illustration purpose, net proceeds to be obtained by DCH Holdings is calculated based on the midpoint of the market capitalization in the range of HK$8.2 billion to HK$10.6 billion from the Global Offering

• Note 4: comprised the proceeds to be obtained by the Group from the Global Offering (other than those obtained by DCH Holdings) and the difference between the Group’s share of the net assets (after deducting the minority interest) of DCH Holdings before and after the Proposed Spin-Off and the Global Offering.

Based on the above table, the net asset value (after deducting minority interest) of the Group would, among other things, be increased by approximately HK$2.3 billion (assuming the Over-allotment Option is not exercised), representing approximately 4.9% increase in the consolidated net asset value (after deducting the minority interest), or approximately HK$2.6 billion (assuming the Over-allotment Option is exercised in full), representing an increase of approximately 5.6% in the consolidated net asset (after deducting the minority interest) of the Group after the Global Offering. On the basis of the above, we are of the view that the Company and, indirectly, the Shareholders, will benefit from the improvement in the consolidated net asset value (after deducting the minority interest) of the Company resulting from the Proposed Spin-off and the Global Offering.

(ii) Effect on earnings

The effects of the Global Offering and the Proposed Spin-off on the future earning of the Group will depend on, amongst other things, the return generated from the proceeds raised from the Global Offering as well as the future business development of the business operations of the Group and the DCH Group.

As stated in the section headed “Letter from the Board” in the Circular, after the Proposed Spin-Off, the enlarged issued share capital of DCH Holdings is held as to 56.6% (assuming the Over-allotment Option is not exercised) or 50.1% (assuming the Overallotment Option is exercised in full) by the Group, accordingly, DCH Holdings will remain a subsidiary of the Company and its financial results will be consolidated into those of the Company. However, the percentage share of earnings of DCH Holdings by the Company will be reduced from 100% to approximately 56.6% (assuming the Over-allotment Option is not exercised) or 50.1% (assuming the Over-allotment Option is exercised in full) in the consolidated financial results of the Company after completion of the Proposed Spin-off and the Global Offering.

As mentioned above, as a result of the Proposed Spin-off and the Global Offering, it is expected that the Company will record an once-off gain from the Global Offering, accordingly, such once-off gain will have a positive impact on the Company’s earnings for the year ending 31 December 2007 (assuming completion of the Proposed Spin-off and Global Offering will be on or before 31 December 2007). However, the gain to be recognised by the Company due to the Proposed Spin-off and Global Offering will largely depend on the final pricing of the Global Offering.

Based on the audited consolidated profits attributable to the equity holders of the Company for the year ended 31 December 2006 of approximately HK$8,272 million, and the Company’s share of the audited profits of DCH Holdings for the year ended 31 December 2006 amounted to approximately HK$322 million. It is estimated that approximately 3.9% of the Company’s audited consolidated profit were attributable from the DCH Group.

– 29 –

LETTER FROM COMMERzBANK

Assuming the Proposed Spin-off was completed on 1 January 2006 and without taking into account the financial impact from the once-off gain from the Global Offering and the pre-listing dividend to be declared by DCH Holdings of HK$900 million, the decrease in the Company’s shareholding in the enlarged issued share capital of DCH Holdings to 56.6% (assuming the Over-allotment Option is not exercised) or 50.1% (assuming the Overallotment is exercised in full) will result in the profit attributable to the equity holder of the Company for the year ended 31 December 2006 being diluted by approximately 1.7% and 1.9% respectively.

It should be noted that the above analysis has not taken into consideration any new business opportunities and benefits (as discussed above) which the Proposed Spin-off and the Global Offering may possibly bring to the Group and DCH Group, in particular those which are consequential to the availability of the proceeds from the Global Offering and separate listing status of DCH Group. Having taken into account the improvement in the business structure (as discussed above), net assets, working capital and gearing position (as detailed below) of the Group after the Proposed Spin-off and Global Offering, on balance, we consider that the decrease in the profit attributable to the equity holder of the Company as illustrated above, is acceptable to the Shareholders.

In addition, as discussed in (i) above, the Global Offering is expected to result in an increase in net assets (after deducting minority interest) of the Group in the range of HK$2.3 billion (assuming the Over-allotment Option is not exercised) to HK$2.6 billion (assuming the Over-allotment Option is exercised in full) on the basis that the expected market capitalization of DCH Holdings is in the range of approximately HK$8.2 billion to HK$10.6 billion from the Global Offering. This represents an once-off gain as a result from the Global Offering and such gain is non-recurring in nature and shall be reflected in the profit and loss accounts of the Group for the year ended 31 December 2007 if the Share Offer and the Proposed Spin-off takes place therein. However, it should be noted that the aforesaid gain from the Global Offering is calculated based on a number of assumption, including, among other things, the Global Offering was completed on 31 December 2006 and has not taken into account the financial position of the DCH Group after 31 December 2006. Accordingly, the actual gain from the Global Offering to be recognised by the Group, which will be calculated by reference to the financial position of the DCH Group at the time of completion of the Global Offering, may be different from the above calculation.

(iii) Effect on working capital of the Group

As disclosed in the paragraph headed “Proceeds and intended use thereof” in the “Letter from the Board”, the Global Offering Share Offer is expected to comprise sale of Sale DCH Shares and offer of New DCH Shares to be issued by DCH Holdings, and net proceeds to be raised from the Global Offering are estimated to be in the range of HK$3.3 billion to HK$4.3 billion (assuming the Over-allotment Option is not exercised) or HK$3.8 billion to HK$5.0 billion (assuming the Over-allotment Option is exercised in full). In view of the proposed structure of the Global Offering, it is expected that the additional new capital raised from the Global Offering will provide additional working capital to both the Group and the DCH Group. All of these, together with the fact that DCH Holdings will remain a subsidiary of the Company after the Proposed Spin-off with lesser reliance on the Group’s financial support for its daily operations and future expansion, we are of the view that the working capital position of the Group will be improved as a result of the Proposed Spin-off and the Global Offering, which is in the interest of the Company and the Shareholders as a whole.

– 30 –

LETTER FROM COMMERzBANK

(iv) Effect on the gearing position of the Group

Based on the audited consolidated balance sheet of the Company as at 31 December 2006, the Group had shareholders equity fund of HK$46.5 billion and net debt (total debt less cash and bank deposits) of HK$14.6 billion. The total capital (being the total of the shareholders’ equity fund and the net debt) of the Group as at 31 December 2006 was approximately HK$61.1 billion. The leverage ratio of the Group (calculated as a percentage of the net debt to the Group’s total capital) as at 31 December 2006 was approximately 24%.

Given that DCH Holdings will obtain approximately HK$0.8 billion (assuming the Over-allotment Option is not exercised) to HK$1.0 billion (assuming the Over-allotment is exercised in full) from the Global Offering, and DCH Holdings will remain a subsidiary of the Company with its financial results remain being consolidated into those of the Group, it is expected that the cash position of the Group will increase by the same amount after the Proposed Spin-off and the Global Offering. Furthermore, the Group sale of the Sale DCH Shares will also allow the Company to obtain addition funding of approximately HK$2.5 billion to HK$3.3 billion (assuming the Over-allotment Option is not exercised) or HK$3.0 billion to HK$4.0 billion (assuming the Over-allotment is exercised in full).

On this basis, based on the financial position of the Group as at 31 December 2006 and taking into account the mid-point of the range of the estimated aggregate net proceeds of approximately HK$3.8 billion (assuming the Over-allotment Option is not exercised) to HK$4.4 billion (assuming the Over-allotment Option is exercised in full) to be obtained by the Group from the Global Offering, the total cash position of the Group will be improved by approximately HK$3.8 billion (assuming the Over-allotment Option is not exercised) to HK$4.4 billion (assuming the Over-allotment Option is exercised in full). On this basis, the Group’s gearing ratio will be lowered to approximately 18.2% (assuming the Over-allotment Option is not exercised) or 17.2% (assuming the Over-allotment Option is exercised in full). In view of the aforesaid, we are of the view that the Proposed Spin-off and the Global Offering are beneficial to the Company and the Shareholders as a whole.

(v) Business of the Group after the Proposed Spin-off

After the Proposed Spin-off, in addition to the Group’s over 50% interest in DCH Group, the Group will continue its business in the area of manufacturing of special steel, iron ore mining, property development and investment, infrastructure (such as power generation, aviation, civil infrastructure and communication). The operations of the DCH Group represents one distinct business amongst the wide range of businesses conducted by the Group. Given the Group’s wide variety of delineated businesses, it is expected that the Proposed Spin-off will not result in any overlapping or competition with the Group’s remaining business. Save for alignment of the group internal control, company secretarial, internal audit functions and tax compliance matters which are shared among the Group, it is expected that DCH Group will operate substantially independent of the Group.

– 31 –

LETTER FROM COMMERzBANK

As disclosed in the section headed “Letter from the Board” in the Circular, the audited consolidated profit attributable to the Shareholders (excluding the interest of the Group in DCH Holdings) for the three financial years ended 31 December 2004, 2005 and 2006 amounted to HK$3,296 million, HK$3,747 million and HK$7,950 million, respectively. In view of the level of profit attributable to the Group from its remaining business and the total assets deployed after the Proposed Spin-off, we are of the view that the Group remains to have a substantial and viable business after the Proposed Spin-off, generating a diversified mix of income flow from its remaining business.

4. The Global Offering

Pursuant to the Proposed Spin-off, issue of the New DCH Shares will represent approximately 10% of the enlarged issued share capital of DCH Holdings and will be made available to the Public Offer and the International Offer under the Global Offering. On the basis that DCH Holdings market capitalization will be valued in the range of approximately HK$8.2 billion to HK$10.6 billion and DCH Holdings’ profit attributable to the Group of approximately HK$322 million for the year ended 31 December 2006, it is expected that the price-to-earning ratio (“PER”) will be in the range of approximately 25 to 33.

We have discussed with the management of the Company and have been advised that the Global Offering is broadly determined on the basis of the following factors:

• (i) the past financial performance of DCH Holdings;

• (ii) the growth potential of DCH Holdings;

• (iii) the performance of the securities market in Hong Kong and the general market sentiment towards the Global Offering (with reference to the offer statistics, the subscription results and the after market share price performance of the recent initial public offering in the market); and

• (iv) the current trading multiples of the Company and market comparables as described below.

– 32 –

LETTER FROM COMMERzBANK

We have noted the following companies listed on the Main Board of the Stock Exchange that have certain parts of their operations that are engaged in business which are similar to those of the DCH Group, such as consumers trading, motor distribution or supply chain management/ logistics:

ics:
			Historical
	Stock Code	Average Price	earning per share	PER
		(Note 1)	(Note 2)	(Note 3)
		(HK$)	(HK$)	(x)
Retails
GOME Electrical Appliances Holdings Limited	493	11.81	0.41	28.80
Lianhua Supermarket Holdings Co. Ltd	980	10.74	0.42	25.57
Convenience Retail Asia Limited	8052	3.42	0.11	31.09
Food and Beverages
China Resources Enterprise, Limited	291	29.04	1.19	24.40
Tingyi (Cayman Islands) Holding Corp	322	8.92	0.21	42.48
China Mingniu Dairy Company Limited	2319	26.16	0.57	45.89
China Yurun Food Group Limited	1068	8.73	0.36	24.25
Supply Chain Management/Logistics
Li & Fung Limited	494	26.81	0.67	40.01
Integrated Distribution Services Group Limited	2387	23.28	0.59	39.46
Vehicle Distributors
Lei Shing Hong Limited	238	4.78	0.30	15.93
Wo Kee Hong (Holdings) Limited	720	0.95	0.03	31.67
Median				31.09
Mean				31.78
DCH Holdings(Note 4)				25 to 33
Source: Bloomberg and the respective annual reports of the Comparables
Note 1: based on the average price of the shares for the last		180 trading days up to and including		the Latest
Practicable Date

Note 2: historical earning per share of each Comparables is extracted from their respective annual reports for the year ended 31 December 2006. Note 3: the price-to-earning ratio, being the average price of the shares for the last 180 trading days divided by the historical earning per share as stated in their respective annual report. Note 4: based on the consolidated profit of DCH Holdings attributable to the Group for the year ended 31 December 2006 of HK$322 million and the market capitalization of the Global Offering in the range of HK$8.2 billion to HK$10.6 billion.

Based on our analysis above, we noted that the PER based on the financial results of the comparable companies (the “Comparables”) for the period ended 31 December 2006 ranged from approximately 15.9 to 45.9, with a mean of approximately 31.8 and a median of 31.1. Having taken into account the expected PER of DCH Holdings will be in the range of approximately 25 to 33, which is within the range of PER of the Comparables with the lower range smaller than the average PERs of the Comparables, we consider that if the DCH Shares are going to be offered at a historical PER which are comparable or higher than the mean and median historical PER of the Comparables as analysed from above, it will be beneficial to the Company and its Shareholders as a whole.

– 33 –

LETTER FROM COMMERzBANK

PREFERENTIAL OFFER

Under paragraph 3(f) of Practice Note 15 of the Listing Rules, the Shareholders should be offered an Assured Entitlement to the DCH Shares, either by way of a distribution in specie of existing shares in DCH Holdings or by way of preferred application in any offering of existing new shares in DCH Holdings. In this regard, the Company has proposed that, if and when the Proposed Spin-off materializes, Qualifying Shareholders shall be entitled to subscribe on an assured basis at the Offer Price for one Reserved Share for every whole multiple of 25 existing Shares held by them on 3 October 2007.

In order to assess for the reasonableness of the Assured Entitlement of the DCH Shares to be offered to the Qualifying Shareholders under the Preferential Offer, the following recent spin-off exercises (“Spin-off Exercises”) for companies listed on the Stock Exchange have been identified for comparison:

arison:
			Assured Entitlement
			as a percentage of the
Date of Listing	Company Name	Stock Code	shares offered
			(Note)
March 2004	Tom Online Inc.	8282	3.9%
June 2004	Dah Sing Banking Group Limited	2356	15.0%
October 2004	Hutchison Telecommunication	2332	4.9%
	International Limited
January 2005	Dynasty Fine Wines Group Limited	828	12.0%
October 2005	One Media Group Limited	426	7.0%
May 2006	Tianjin Port Development Holdings Limited	3382	10.6%
April 2007	CITIC 1616 Holdings Limited	1883	6.9%
July 2007	New World Development Store	825	5.0%
	China Limited
	DCH Holdings		5.7%

Note: extracted from the prospectus of the respective companies.

The Assured Entitlement offered to the shareholders under the Spin-off Exercises as a percentage to their respective total number of shares offered ranged from 3.9% to 15.0%. There will be approximately 5.7% of the shares offered of DCH Holdings available for subscription by Qualifying Shareholders at the Offer Price under the Preferential Offer assuming Over-allotment Option is not exercised. Given that the relevant percentage of DCH Holdings is comparable with other Spin-off Exercises, we consider that the size of the Preferential Offer is reasonable.

– 34 –

LETTER FROM COMMERzBANK

CONDITIONS OF THE OFFERING

Details of the conditions precedent of the Proposed Spin-off are detailed in the section headed “Letter of the Board” in the Circular. However, the Global Offering and the Proposed Spin-off are conditional on, among other things, the Shareholders passing an ordinary resolution at the EGM to approve the Proposed Spin-off. As the interest of all Shareholders are identical to each of them in respect of the Proposed Spin-off, all Shareholders (including the controlling Shareholders) are entitled to vote on the Proposed Spin-off. Pursuant to paragraph 3(e) of Practice Note 15 of the Listing Rules, in any case where the controlling Shareholder votes through a Proposed Spin-off proposal in face of significant minority opposition, the Stock Exchange would expect to receive a report from the independent financial adviser as to the discussion at the relevant general meeting.

In addition to the approval by the Shareholders of the Proposed Spin-off, the Share Offer and the Proposed Spin-off are also conditional on, among other things, the Listing Committee granting approval for the listing of the DCH Shares, and the obligations of Underwriters becoming unconditional and the Underwriting Agreements not being terminated. Accordingly, the Proposed Spin-off and the Share Offer may not proceed if the aforesaid and other applicable conditions are not fulfilled or waived.

RECOMMENDATION

Based on the above principal factors and reasons, we consider the terms of the Proposed Spin-off are fair and reasonable so far as the Shareholders are concerned and that the Proposed Spin-off is in the interest of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Proposed Spin-off.

Yours faithfully, For and on behalf of

Commerzbank AG Hong Kong Branch Kenneth Chan Gaston Lam Head of Corporate Finance Corporate Finance — Asia Pacific — Asia Pacific

– 35 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

This appendix summarises the principal terms of the Share Option Schemes and does not form, nor is intended to be, part of the Share Option Schemes nor should it be taken as affecting the interpretation of the rules of the Share Option Schemes.

PART A — PRE-IPO SHARE OPTION SCHEME

The principal terms of the Pre-IPO Share Option Scheme proposed to be approved and adopted by (i) written resolutions of all the shareholders of DCH Holdings; and (ii) ordinary resolutions of the Shareholders, are substantially the same as the terms of the Post-IPO Share Option Scheme (where applicable) except for the following principal terms:

• (a) the subscription price per DCH Share shall be the Offer Price;

• (b) no options will be offered or granted upon the commencement of dealings in the DCH Shares on the Stock Exchange;

• (c) the grantee shall not, within 6 months from the Listing Date, exercise any of the options granted under the Pre-IPO Share Option Scheme;

• (d) any exercise of option shall only become effective upon (i) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the DCH Shares to be issued pursuant to Pre-IPO Share Option Scheme; and (ii) the commencement of dealings in the DCH Shares on the Stock Exchange;

• (e) the maximum number of DCH Shares in respect of which options may be granted under the Pre-IPO Share Option Scheme shall not exceed 18,000,000 DCH Shares, being 1% of the total number of issued DCH Shares immediately following the commencement of dealings in DCH Shares on the Stock Exchange; and

• (f) the conditions precedent to the adoption of the Post-IPO Share Option Scheme shall not apply and any options granted or to be granted under the Pre-IPO Share Option Scheme shall lapse automatically should listing does not take place on or before 31 December 2008.

Application has been made to the Listing Committee for the approval of the listing of, and permission to deal in, DCH Shares to be issued pursuant to the exercise of the options proposed to be granted under the Pre-IPO Share Option Scheme.

– 36 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

PART B — POST-IPO SHARE OPTION SCHEME

The following is a summary of the principal terms of the Post-IPO Share Option Scheme proposed to be approved and adopted by (i) written resolutions of all the shareholders of DCH Holdings; and (ii) ordinary resolutions of the Shareholders. For the purpose of this Part B of this Appendix I, references to the “Board” shall mean the board of directors of DCH Holdings or a duly authorised committee thereof, references to “Employee” shall mean any person employed by DCH Holdings or any subsidiary and any person who is an officer or director (whether executive or non-executive) of DCH Holdings or any subsidiary, references to “Grantee” shall mean any Employee who accepts an offer of the grant of an option in accordance with the terms of the Post-IPO Share Option Scheme or (where the context so requires) the legal personal representatives of such Employee. A Grantee shall not cease to be an Employee in case of (a) any leave of absence approved by DCH Holdings or the relevant subsidiary; or (b) transfer of employment between DCH Holdings and any subsidiary or any successor.

(a) Purpose

The purpose of the Post-IPO Share Option Scheme is to attract and retain the best quality personnel for the development of DCH Holdings’ businesses; to provide additional incentives to the Employee and to promote the long term financial success of DCH Holdings by aligning the interests of Grantees to shareholders of DCH Holdings.

(b) Who may join

On and subject to the terms of the Post-IPO Share Option Scheme and the requirements of the Listing Rules, the Board may offer to grant an option to any Employee as the Board may in its absolute discretion select.

(c) Approval of the shareholders or independent non-executive directors of CITIC Pacific

Insofar and for so long as (i) the Listing Rules so require; (ii) CITIC Pacific is the holding company of DCH Holdings; and (iii) the shares of CITIC Pacific are listed on the Stock Exchange, any provision in the Post-IPO Share Option Scheme requiring the approval of the shareholders or independent non-executive directors (as the case may be) of DCH Holdings shall be construed as also requiring the approval of the shareholders or independent non-executive directors (as the case may be) of CITIC Pacific. Where such provisions require DCH Holdings to issue a circular to its shareholders prior to seeking their approval, CITIC Pacific shall also issue a circular to its shareholders prior to seeking their approval.

(d) Administration

The Post-IPO Share Option Scheme shall be subject to the administration of the Board. The Board’s administrative powers include the authority, in its discretion:

• (i) to select Employees to whom options may be granted under the Post-IPO Share Option Scheme;

• (ii) to determine, subject to the requirements of the Listing Rules and the law, the time of the grant of options;

• (iii) to determine the number of options;

– 37 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

• (iv) to approve forms of option agreements;

• (v) to determine the terms and conditions, not inconsistent with the terms of the Post-IPO Share Option Scheme and provided that such terms and conditions do not relax any limits imposed by the Listing Rules, of any option based in each case on such factors as the Board, in its sole discretion, shall determine to be stated in the letter controlling the offer of the grant of the option. Such terms and conditions may include, but are not limited to:

• (i) conditions, restrictions or limitations relating to the achievement of operating or financial targets;

• (ii) satisfactory performance by the Grantee;

• (iii) the time or period when the right to exercise the option in respect of all or some of the DCH Shares the subject of the option will vest; and/or

• (iv) that the DCH Shares to be allotted and issued upon exercise of the option may only be sold after DCH Holdings has been given 24 hours’ previous written notice.

Without prejudice to the quality of the foregoing and subject to paragraph (g), the Board may grant options in respect of which the subscription price is fixed at different prices for certain periods during the option period provided that the subscription price shall not be less than that determined in accordance with paragraph (g).

• (vi) to construe and interpret the terms of the Post-IPO Share Option Scheme and options granted pursuant to the Post-IPO Share Option Scheme;

• (vii) to prescribe, amend and rescind rules and regulations relating to the Post-IPO Share Option Scheme, including rules and regulations relating to sub-schemes established for the purpose of qualifying for preferred treatment under foreign laws and for benefits intended solely for any particular type of Employees provided that administration of any such sub-schemes shall follow the requirements of the Listing Rules (including Chapter 17 of the Listing Rules);

• (viii) subject to paragraph (x) to vary the terms and conditions of any option agreement (provided that such variation is not inconsistent with the terms of the Listing Rules and the Post-IPO Share Option Scheme).

(e) Grant of option

On and subject to the terms of the Post-IPO Share Option Scheme and the requirements of the Listing Rules (in particular as to grant of options to directors, chief executives and substantial shareholders of DCH Holdings or their respective associates), the Board shall be entitled at any time within 10 years commencing on the date of adoption of the Post-IPO Share Option Scheme to make an offer for the grant of an option to any Employee as the Board may in its absolute discretion select.

– 38 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(f) Payment on acceptance of option offer

An offer shall remain open for acceptance by the Employee concerned for a period of 28 days from the date of the offer (or such longer period as the Board may specify in writing). HK$1.00 is payable by the Grantee to DCH Holdings on acceptance of the offer of the option. If such remittance is not made upon acceptance, acceptance of an offer shall create a promise by the relevant Grantee to pay to DCH Holdings HK$1.00 on demand.

(g) Subscription price

The subscription price in respect of any particular option shall be such price as the Board may in its absolute discretion determine at the time of grant of the relevant option but the subscription price shall not be less than whichever is the higher of (i) the closing price of the DCH Shares as stated in the Stock Exchange’s daily quotations sheet on the date of grant; (ii) the average closing prices of the DCH Shares as stated in the Stock Exchange’s daily quotation sheets for the five business days immediately preceding the date of grant; and (iii) the nominal value of a DCH Share.

(h) Option period

The period within which the DCH Shares must be taken up under an option shall be determined by the Board in its absolute discretion at the time of grant, but such period must not exceed 10 years from the date of grant of the relevant option.

(i) Rights are personal to grantee

An option shall be personal to the Grantee and shall not be assignable or transferable.

(j) Rights attaching to DCH Shares allotted

The DCH Shares to be allotted upon the exercise of an option shall be subject to all the provisions of the Articles of Association of DCH Holdings for the time being in force and will rank pari passu with the fully paid DCH Shares in issue on the date of allotment and accordingly will entitle the holders to participate in all dividends or other distributions paid or made on or after the date of allotment other than any dividend or other distribution previously declared or recommended or resolved to be paid or made with respect to a record date which shall be before the date of allotment.

(k) Rights on retirement, death or total permanent physical or mental disability

In the event of the Grantee ceasing to be an Employee by reason of his death; retirement under normal retirement conditions then prevailing in DCH Holdings; or total permanent physical or mental disablement, his option will immediately vest and he or his legal personal representatives (as the case may be) shall be entitled to exercise the option (to the extent not already exercised) up to the end of the option period, following which the option shall lapse.

– 39 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(l) Termination for being guilty of serious misconduct etc.

If a Grantee ceases to be an Employee for reason of being guilty of serious misconduct, or having committed any act of bankruptcy or having become insolvent or having made any arrangements or composition with his creditors generally, or having been convicted of any criminal offence involving his integrity or honesty, the option shall immediately lapse.

(m) Rights on termination other than for retirement, death, permanent disability or misconduct

If a Grantee ceases to be an Employee other than for reasons provided under paragraphs (k) or (l) (and including resignation for any reason), the Grantee may exercise his option (to the extent already vested as at the date of cessation of employment and not already exercised) within 3 months of such cessation, following which the option shall lapse.

(n) Rights on termination due to separate listing or sale

If the Board considers that a Grantee has ceased to be an Employee due to the sale, or separate listing, of the company he is serving, or if DCH Holdings is merged, reorganised or consolidated with another entity, the Board may at its sole discretion:

• (i) arrange for substitute options or share purchase rights of no less than equivalent fair value, in the purchasing, surviving or newly-listed company;

• (ii) provide cash compensation equivalent to their fair value;

• (iii) waive any conditions as to vesting; or

• (iv) permit the continuation of the option according to its original terms.

If the Board does not permit the continuation of the option in accordance with its original terms or make any of the arrangements specified in (i) to (iv) above, the option shall lapse.

(o) Right on general offer

If a general offer (whether by way of takeover offer or scheme of arrangement or otherwise in like manner) is made to all the holders of DCH Shares (or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror), and the offer becomes or is declared unconditional (or, in the case of a scheme of arrangement, or other similar transaction, becomes or is declared effective), the option will immediately vest and the Grantee shall be entitled to exercise the option (to the extent not already exercised) at any time within one month (or for such longer period as the Board may determine as may be necessary to permit the Grantee to participate in the offer on a similar basis with the holder of DCH Shares) after the date on which the offer becomes or is declared unconditional or such longer period as the Board may determine following which the option shall lapse.

(p) Rights on compromise or arrangement

If a compromise or arrangement between DCH Holdings and its members or creditors is proposed for the purposes of the amalgamation of DCH Holdings with any other company(ies), DCH Holdings shall give notice to the Grantee on the same date as it despatches the notice to each

– 40 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

member or creditor of DCH Holdings summoning the meeting to consider such a compromise or arrangement, and thereupon the Grantee (or his personal representatives) may until the expiry of the period commencing with such date and ending with the earlier of the date 2 calendar months thereafter or the date on which such compromise or arrangement is sanctioned by the court exercise any of his options (to the extent not already exercised) whether in full or in part, but the exercise of an option as aforesaid shall be conditional upon such compromise or arrangement being sanctioned by the court and becoming effective. DCH Holdings may require the Grantee to transfer or otherwise deal with the DCH Shares issued as a result of the exercise of options in these circumstances so as to place the Grantee in the same position, as nearly as possible, as would have been the case had such DCH Shares been subject to such compromise or arrangement.

If the option is not exercised within the time specified, the option shall lapse.

(q) Rights on voluntary winding-up of DCH Holdings

In the event a notice is given by DCH Holdings to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up DCH Holdings, DCH Holdings shall on the same date as or soon after it despatches such notice to each member of DCH Holdings give notice thereof to all Grantees (together with a notice of the existence of the provisions of the Post-IPO Share Option Scheme relating to this paragraph (q)) and thereupon, each Grantee (or his or her personal representatives) shall be entitled to exercise all or any of his options (to the extent not already exercised) at any time not later than two business days prior to the proposed general meeting of DCH Holdings by giving notice in writing to DCH Holdings, accompanied by a remittance for the full amount of the aggregate subscription price for the DCH Shares in respect of which the notice is given whereupon DCH Holdings shall as soon as possible and, in any event, no later than the business day immediately prior to the date of the proposed general meeting referred to above, allot the relevant DCH Shares to the Grantee credited as fully paid.

If the option is not exercised within the time specified, the option shall lapse.

(r) Lapse of option

Subject to the discretion of the Board to extend the option period as referred to in paragraphs (d), (k), (m), (n) and (v) and without prejudice to the authority of the Board to provide for additional situations where an option shall lapse in any option agreement, an option shall lapse and not be exercisable (to the extent not already exercised) on the earliest of (i) the expiry of the option period; (ii) the expiry of any of the periods referred to in paragraphs (k), (l), (m), (n), (o), (p) and (q); and (iii) the date on which the Board certifies that there has been a breach of paragraph (i).

(s) Cancellation of option

Options granted but not exercised or lapsed in accordance with the terms of the Post-IPO Share Option Scheme may be cancelled by DCH Holdings. Where DCH Holdings cancels options and offers to issue new ones to the same Grantee, the issue of such new options may only be made under the Post-IPO Share Option Scheme with available unissued options (excluding the cancelled options) within the limits set out in paragraph (t) below.

– 41 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(t) Maximum number of DCH Shares available under the Post-IPO Share Option Scheme

(i) Overriding Limit

The limit on the number of DCH Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Post-IPO Share Option Scheme and any other schemes must not exceed 10% of the DCH Shares in issue from time to time. No options may be granted under any schemes of DCH Holdings if this will result in the limit being exceeded.

(ii) Mandate Limit

In addition to the limit set out in sub-paragraph (t)(i) above and prior to the approval of a refreshed mandate limit as referred to in sub-paragraph (t)(iii) below, the total number of DCH Shares which may be issued upon exercise of all options to be granted under the Post-IPO Share Option Scheme and any other schemes of DCH Holdings must not in aggregate exceed 10% of the DCH Shares in issue immediately following the commencement of dealings in the DCH Shares on the Stock Exchange, being 180,000,000 DCH Shares (“ Initial Mandate Limit ”). Options lapsed in accordance with the terms of the Post-IPO Share Option Scheme or any other schemes will not be counted for the purpose of calculating the 10% limit.

(iii) Refreshing of Mandate Limit

DCH Holdings may by ordinary resolutions of the shareholders of DCH Holdings refresh the Mandate Limit. However, the total number of DCH Shares which may be issued upon exercise of all options to be granted under all of the schemes of DCH Holdings under the limit as refreshed (“ Refreshed Mandate Limit ”) must not exceed 10% of the DCH Shares in issue as at the date of approval of the limit. Options previously granted under the schemes (including those outstanding, cancelled, lapsed in accordance with the schemes of DCH Holdings or exercised options) will not be counted for the purpose of calculating the limit as refreshed.

(iv) Limit for each Employee Grantee

The total number of DCH Shares issued and to be issued upon exercise of options (whether exercised or outstanding) in any 12-month period granted to each Grantee must not exceed 1% of the DCH Shares in issue. Where any further grant of options to a Grantee would result in the DCH Shares issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1% of the DCH Shares in issue, such further grant shall be subject to separate approval by the shareholders of DCH Holdings in general meeting with the relevant Grantee and his associates abstaining from voting. The date of the offer (which is made subject to such approvals set out in this sub-paragraph) in respect of such grant should be taken as the date of grant for such grants.

– 42 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(u) Effects of reorganisation of capital structure

In the event of any alteration in the capital structure of DCH Holdings whilst any option may become remains exercisable, whether by way of capitalisation of profits or reserves (other than pursuant to a scrip dividend scheme), rights issue, consolidation, subdivision, reduction or similar reorganisation of the share capital of DCH Holdings, such corresponding alterations (if any) shall be made to the number or nominal amount of DCH Shares subject to the option so far as unexercised; and/or the subscription price; and/or the method of exercise of the option; and/or the maximum number of DCH Shares referred to in paragraph (t) above, as the auditors shall certify in writing to the Board either generally or as regards any particular Grantee to be in their opinion fair and reasonable (except in the case of a capitalisation issue where no such certification shall be required), provided that: (i) any such alterations shall be made on the basis that the aggregate subscription price payable by a Grantee on the full exercise of any option shall remain as nearly as possible the same (but shall not be greater than) it was before such event; (ii) no such alterations shall be made the effect of which would be to enable a DCH Share to be issued at less than its nominal value; (iii) no such alterations shall be made the effect of which would be to increase the proportion of the issued share capital of DCH Holdings for which any Grantee is entitled to subscribe pursuant to the options held by him; and (iv) any such adjustments shall be made in compliance with Chapter 17 of the Listing Rules, the supplemental guidance issued by the Stock Exchange dated 5 September 2005 and such other guidelines or supplementary guidance as may be issued by the Stock Exchange from time to time.

For the avoidance of doubt only, the issue of securities as consideration in a transaction shall not be regarded as a circumstance requiring any such alterations.

(v) Alteration to the Post-IPO Share Option Scheme

The Post-IPO Share Option Scheme may be altered in any respect by resolution of the Board except that the provisions of the Post-IPO Share Option Scheme relating to matters contained in Rule 17.03 of the Listing Rules (including the provisions under paragraphs (e), (g), (i), (j), (r), (s), (t), (u), (v) and (x)) shall not be altered to the advantage of Grantees or prospective Grantees except with the prior sanction of a resolution of DCH Holdings in general meeting, provided that no such alteration shall operate to affect adversely the terms of issue of any option granted or agreed to be granted prior to such alteration except with the consent or sanction of such majority of the Grantees as would be required of the shareholders of DCH Holdings under the Articles of Association for the time being of DCH Holdings for a variation of the rights attached to the DCH Shares. Any alterations to the terms and conditions of the Post-IPO Share Option Scheme, which are of a material nature and any change to the terms of the options granted, shall be approved by the shareholders of DCH Holdings, except where the alterations take effect automatically under the existing terms of the Post-IPO Share Option Scheme. The amended terms of the Post-IPO Share Option Scheme shall comply with the relevant requirements of Chapter 17 of the Listing Rules. Any change to the authority of the Board in relation to any alteration to the terms of the Post-IPO Share Option Scheme shall be approved by the shareholders of DCH Holdings. Subject to the Listing Rules and the terms of the Post-IPO Share Option Scheme the Board may, at any time and in its absolute discretion, remove, waive or vary the conditions, restrictions or limitations imposed in an option agreement on compassionate or any other grounds.

– 43 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(w) Termination of Post-IPO Share Option Scheme

DCH Holdings by resolution in general meeting or the Board may at any time terminate the operation of the Post-IPO Share Option Scheme and in such event no further options will be offered after the Post-IPO Share Option Scheme is terminated but in all other respects the provisions of the Post-IPO Share Option Scheme shall remain in full force and effect. All options granted prior to such termination and not then exercised shall remain valid.

(x) Offers made to a director, chief executive or employee of DCH Holdings who is also substantial shareholder of DCH Holdings or any of their respective associates

Subject to sub-paragraph (t)(iv) above, but only insofar as and for so long as the Listing Rules require, where any offer of an option is proposed to be made to an Employee who is a director, chief executive or substantial shareholder of DCH Holdings or any of their respective associates, such offer must first be approved by the independent non-executive directors of DCH Holdings. As regards grant to an employee (who may be a director or chief executive of DCH Holdings) who is also a substantial shareholder or an independent non-executive director of DCH Holdings, please refer to the note below.

For avoidance of doubt, a substantial shareholder who is not an Employee is not eligible under the Post-IPO Share Option Scheme for options.

Note:

Insofar and for so long as the Listing Rules so require, no option may be granted to any substantial shareholder or an independent non-executive director of DCH Holdings, or any of their respective associates or any person whose associate is a substantial shareholder or an independent non-executive director of DCH Holdings, which would result in the DCH Shares issued and to be issued upon exercise of all options already granted or to be granted (including options exercised, cancelled and outstanding) to such person under the Post-IPO Share Option Scheme and any other scheme(s) of DCH Holdings in the 12-month period up to and including the date of the offer (which is made subject to such approvals set out in this sub-paragraph) in respect of such further grant:

• (a) representing in aggregate over 0.1% of the issued share capital of DCH Holdings in issue; and

• (b) having an aggregate value, based on the closing price of the DCH Shares at the date of the offer (which is made subject to such approvals set out in this sub-paragraph) in respect of such further grant, in excess of HK$5,000,000 unless such further grant is approved by the shareholders of DCH Holdings in general meeting. In such general meeting, the grant of options to the substantial shareholder or independent non-executive director of DCH Holdings or any of their respective associates or any person whose associate is a substantial shareholder or an independent non-executive director of DCH Holdings shall, for so long and insofar as the Listing Rules so require, be approved by the shareholders of DCH Holdings by way of poll with all connected persons (which has the meaning as set out in the Listing Rules) of DCH Holdings abstaining from voting, except that any connected person may vote against such resolution provided that he has informed DCH Holdings of his intention to do so and such intention has been stated in the relevant circular to shareholders (which circular shall contain all details and information as required under the Listing Rules). For so long and insofar as the Listing Rules so require, any variation in the terms of option granted to a Grantee who is a substantial shareholder or an independent non-executive director of DCH Holdings, or any of their associates, must be approved by the shareholders of DCH Holdings in general meeting with all connected persons of DCH Holdings interested in the relevant option abstaining from voting.

– 44 –

SUMMARY OF THE PRINCIPAL TERMS OF THE SHARE OPTION SCHEMES

APPENDIX I

(y) Conditions of Post-IPO Share Option Scheme

The Post-IPO Share Option Scheme is conditional on:

• (i) the Listing Committee of Stock Exchange granting the listing of, and permission to deal in, the DCH Shares to be issued pursuant to the Post-IPO Share Option Scheme; and

• (ii) the commencement of dealings in the DCH Shares on the Stock Exchange.

(z) Present status of the Post-IPO Share Option Scheme

As at the date of this circular, no option has been granted or agreed to be granted under the Post-IPO Share Option Scheme.

Application has been made to the Listing Committee of the Stock Exchange for the approval of the Post-IPO Share Option Scheme and the subsequent granting of options under the PostIPO Share Option Scheme and for the listing of, and permission to deal in, the DCH Shares which may fall to be issued pursuant to the exercise of options granted under the Post-IPO Share Option Scheme.

– 45 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to CITIC Pacific. 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 BY DIRECTORS

(a) Interests in CITIC Pacific

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of CITIC Pacific in the shares, underlying shares and debentures of CITIC Pacific and its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to CITIC Pacific and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register maintained by CITIC Pacific referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

(i) Interests in Shares

Name of Director Larry Yung Chi Kin Henry Fan Hung Ling Peter Lee Chung Hing Carl Yung Ming Jie Leslie Chang Li Hsien Vernon Francis Moore Li Shilin Liu Jifu Chau Chi Yin Milton Law Ming To Wang Ande Hansen Loh Chung Hon André Desmarais Peter Kruyt (alternate director to Mr. André Desmarais)	Number of Shares Personal interests unless otherwise stated Percentage to the issued share capital % 406,381,000 (Note 1) 18.378 48,000,000 (Note 2) 2.171 1,500,000 0.068 300,000 0.014 480,000 0.022 4,200,000 (Note 3) 0.190 300,000 0.014 840,000 0.038 536,000 0.024 253,000 0.011 110,000 0.005 1,550,000 (Note 4) 0.070 5,075,000 (Note 5) 0.230 34,100 0.002

Note:

1. Corporate interest

2. Corporate interest in respect of 3,000,000 shares and trust interest in respect of 45,000,000 shares

– 46 –

GENERAL INFORMATION

APPENDIX II

1. Trust interest

2. Personal interest in respect of 1,050,000 shares; corporate interest in respect of 500,000 shares and family interest in respect of 500,000 shares which duplicate each other

3. Corporate interest in respect of 5,000,000 shares and family interest of 75,000 shares

(ii) Interests in share options

Name of Director Date of grant Exercise price per share Exercisable Period HK$ Larry Yung Chi Kin 05.12.2005 20.5 05.12.2008-04.12.2010 Peter Lee Chung Hing 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Carl Yung Ming Jie 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Leslie Chang Li Hsien 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Vernon Francis Moore 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Liu Jifu 20.06.2006 22.1 20.06.2006-19.06.2011 Chau Chi Yin 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Milton Law Ming To 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011 Wang Ande 01.11.2004 19.9 01.11.2004-31.10.2009 20.06.2006 22.1 20.06.2006-19.06.2011

Underlying Shares pursuant to the share options Percentage of issued shares as at the Latest Practicable Date % 100,000,000 (Note 1) 4.522 1,000,000 1,200,000 2,200,000 0.099 500,000 600,000 1,100,000 0.050 350,000 800,000 1,150,000 0.052 1,000,000 700,000 1,700,000 0.077 700,000 0.032 500,000 800,000 1,300,000 0.059 500,000 800,000 1,300,000 0.059 140,000 500,000 640,000 0.029

Note:

1. These share options were granted by CITIC HK, a substantial shareholder of the Company.

– 47 –

GENERAL INFORMATION

APPENDIX II

• (iii) Interests in shares of CITIC 1616 Holdings Limited

Name of Director Vernon Francis Moore Chau Chi Yin	Number of Shares Personal interests unless otherwise stated Percentage to the issued share capital % 200,000 (Note 1) 0.011 26,750 0.001

Note:

1. Trust interest

2. (iv) Interests in share options granted by CITIC Capital Holdings Limited

Name of Director Date of Grant Exercise price per share Exercisable Period HK$ Peter Lee Chung Hing 02.03.2005 66.54 02.03.2007-01.03.2010 04.04.2006 70.97 04.04.2008-03.04.2011 Leslie Chang Li Hsien 02.03.2005 66.54 02.03.2007-01.03.2010 04.04.2006 70.97 04.04.2008-03.04.2011 Vernon Francis Moore 02.03.2005 66.54 02.03.2007-01.03.2010 04.04.2006 70.97 04.04.2008-03.04.2011	Underlying Shares pursuant to the share options Percentage of issued shares as at the Latest Practicable Date % 15,000 10,000 25,000 0.089 15,000 10,000 25,000 0.089 15,000 10,000 25,000 0.089

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor chief executive of CITIC Pacific were interested, or were deemed to have interests or short positions in the shares, underlying shares and debentures of CITIC Pacific or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to CITIC Pacific and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register maintained by CITIC Pacific referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to CITIC Pacific and the Stock Exchange.

(b) Interests in competing businesses

As at the Latest Practicable Date, none of the Directors nor their respective associates had interests in any business which competes or is likely to compete, either directly or indirectly, with any business of the Group.

– 48 –

GENERAL INFORMATION

APPENDIX II

(c) Interests in assets of the Group

As at the Latest Practicable Date, none of the Directors nor their respective associates had any direct or indirect interests in any assets which have been acquired or disposed of by, or leased to, or which are proposed to be acquired or disposed of by, or leased to, CITIC Pacific or any of its subsidiaries since 31 December 2006, being the date to which the latest published audited consolidated financial statements of CITIC Pacific were made up.

(d) Interests in service contracts with the Group

No Director has entered into or has proposed to enter into any service contract with any member of the Group which does not expire or is not terminable within one year without payment of compensation (other than statutory compensation).

3. DISCLOSURE OF INTERESTS BY SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as was known to the Directors, the following persons (not being Directors or chief executive of CITIC Pacific) had, or were deemed to have, interests or short positions in the shares and underlying shares of CITIC Pacific which would fall to be disclosed to CITIC Pacific under the provisions of Divisions 2 and 3 of Part XV of the SFO or 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 other member of the Group:

(i) Interest in the Shares

	Number of	Percentage
	Shares of the	to the issued
Name	Company	share capital
		%
CITIC Group	635,919,285	28.758
CITIC HK	635,919,285	28.758
Heedon Corporation	496,386,285	22.448
Honpville Corporation	310,988,221	14.064
Power Corporation of Canada	132,813,000	6.006
Gelco Enterprises Ltd.	132,813,000	6.006
Nordex Inc.	132,813,000	6.006
Paul G. Desmarais	132,813,000	6.006

– 49 –

APPENDIX II

GENERAL INFORMATION

CITIC HK is a substantial shareholder of the Company indirectly through the following wholly owned subsidiary companies:

	Number of	Percentage
	Shares of the	to the issued
Name of Subsidiary Companies of CITIC HK	Company	share capital
		%
Affluence Limited	46,089,000	2.084
Winton Corp.	30,718,000	1.389
Westminster Investment Inc.	101,960,000	4.611
Jetway Corp.	20,462,000	0.925
Cordia Corporation	32,258,064	1.459
Honpville Corporation	310,988,221	14.064
Hainsworth Limited	83,444,000	3.774
Southpoint Enterprises Inc.	10,000,000	0.452
Raymondford Company Limited	2,823,000	0.128

Each of Affluence Limited, Winton Corp., Westminster Investment Inc., Jetway Corp., Cordia Corporation, Honpville Corporation, Hainsworth Limited, Southpoint Enterprises Inc. and Raymondford Company Limited holds the shares of the Company beneficially. Accordingly, Honpville Corporation is a substantial shareholder of the Company.

CITIC Group is the direct holding company of CITIC HK. CITIC HK is the direct holding company of Heedon Corporation, Hainsworth Limited, Affluence Limited and Barnsley Investments Limited. Heedon Corporation is the direct holding company of Winton Corp., Westminster Investment Inc., Jetway Corp., Kotron Company Ltd. and Honpville Corporation and Kotron Company Ltd. is the direct holding company of Cordia Corporation. Affluence Limited is the direct holding company of Man Yick Corporation which is the direct holding company of Raymondford Company Limited. Barnsley Investments Limited is the direct holding company of Southpoint Enterprises Inc. Accordingly, the interests of CITIC Group in the Company duplicate the interests of CITIC HK in the Company. The interests of CITIC HK in the Company duplicate the interests in the Company of all its direct and indirect subsidiary companies as described above. The interests of Heedon Corporation in the Company duplicate the interests in the Company of all its direct and indirect subsidiary companies as described above. The interests of Affluence Limited in the Company duplicate the interests in the Company of its direct subsidiary company as described above. The interests of Man Yick Corporation in the Company duplicate the interests in the Company of its direct subsidiary company as described above. The interests of Barnsley Investments Limited in the Company duplicate the interests in the Company of its direct subsidiary company as described above and the interests of Kotron Company Ltd. in the Company duplicate the interests in the Company of its direct subsidiary company as described above.

Power Corporation of Canada is a company 54.18% controlled by Gelco Enterprises Ltd. which in turn is 94.95% controlled by Nordex Inc. and the remainder by Mr. Paul G. Desmarais. Nordex Inc. in turn is 68% controlled directly by Mr. Paul G. Desmarais and indirectly as to 32% by the latter. Thus, the aforesaid interests of Power Corporation of Canada, Gelco Enterprises Ltd., Nordex Inc. and Mr. Paul G. Desmarais in the Company duplicate each other.

– 50 –

GENERAL INFORMATION

APPENDIX II

(ii) Short position in the Shares

	Number of	Percentage
	Shares of the	to the issued
Name	Company	share capital
		(%)
CITIC Group	100,000,000	4.522
CITIC HK	100,000,000	4.522

These are in respect of options granted by CITIC HK, a substantial shareholder of the Company (within the meaning of the Listing Rules), to Mr. Larry Yung Chi Kin.

(iii) Substantial shareholding in other members of the Group

		Percentage of issued
		shares as at the Latest
Name of member of the Group	Name of shareholder	Practicable Date
		(%)
Adwood Company Limited	Silverstone Assets Limited	30
New Hong Kong Tunnel	Kumagai International Limited	13.875
Company Limited
Dah Chong Hong-Dragonair	Hong Kong Dragon Airlines	30
Airport GSE Service Limited	Limited
CITIC Interlocal Pte. Ltd.	Kauri Wood Pte. Ltd.	30
DAS Nordisk Limited	Nordisk Asia Pacific Pte. Ltd.	30
DAS Aviation Support Limited	Hong Kong Dragon Airlines	30
	Limited
Bright Billion Limited	Jungle Investment Limited	10
Alixon Co. Ltd.	RFC Management Limited	10
Dah Chong Hong Macau	CBA Investments Company	35
Consulting Company Limited	Limited
Dah Chong Hong Macau	CBA Investments Company	35
General Supply Company	Limited
Limited
Dah Chong Hong Macau Total	CBA Investments Company	35
Supply Chain Management	Limited
Company Limited

– 51 –

GENERAL INFORMATION

APPENDIX II

		Percentage of issued
		shares as at the Latest
Name of member of the Group	Name of shareholder	Practicable Date
		(%)
Dah Chong Hong Macau Food	CBA Investments Company	35
Supply Company Limited	Limited
Dah Chong Hong Macau	CBA Investments Company	35
Logistics Warehouse Company	Limited
Limited
DCH Supply Chain Management	Excel Epoch International	20
Company Limited	Limited
Mainstream Holdings Limited	IBP Caribbean Inc.	34.91
Regal Heights Limited	Perdue Farms Incorporated	40
Hang Shun Fat Company,	Honorway Investments Limited	11.8
Limited	Wideland Investors Limited	11.8
	Mr. Leung Kau Kui, deceased	11.8
Wah Luen Fung Company,	Marvel Sweet Management Ltd.	15
Limited	Wideland Investors Limited	15
Asia Pacific Internet Exchange	HKIX Hong Kong Ltd.	25
Limited
Ko Lok Investment Company,	Marvel Sweet Management Ltd.	40
Limited
Goldenburg Properties Limited	Gorich Traders Limited	30
Winway Investments Holdings	Rising Sun Investments Holdings	38
Corp.	Ltd.
Silver Wings Enterprises Inc.	Sumitomo Metals (Kokura),	25
	Ltd.

– 52 –

GENERAL INFORMATION

APPENDIX II

Name of subsidiary being a joint
venture company established in		Percentage of registered
the PRC without the concept of		capital as at the Latest
general meetings(#)	Name of shareholder	Practicable Date
		(%)
無錫太湖景發展有限公司	無錫市國聯發展(集團)有限公司	30
(Wuxi Taihu Jing	(Wuxi Guo Lian Development
Development Co., Ltd.)	Group Co., Ltd.)
無錫太湖苑置業有限公司	無錫市國聯發展(集團)有限公司	30
(Wuxi Taihu Yuan Property	(Wuxi Guo Lian Development
Co., Ltd.)	Group Co., Ltd.)
無錫太湖美生態環保有限公司	無錫市國聯發展(集團)有限公司	30
(Wuxi Taihu Mei	(Wuxi Guo Lian Development
Environmental Co., Ltd.)	Group Co., Ltd.)
Jiangsu CP Xingcheng Special	Jiangyin Steel Mill	10.60
Steel Co., Ltd.	Bright Trinity Enterprises Ltd.	11.62
Jiangyin Xingcheng Steel	Jiangyin Steel Mill	11.70
Products Co., Ltd.
Jiangyin Xingcheng Storage and	Jiangyin Steel Mill	11.70
Transportation Co., Ltd.
Wuxi Xingcheng Steel Products	Jiangyin Steel Mill	11.70
Co., Ltd.
Kunming Dah Chong Motor	雲南客車廠	30
Service Co., Ltd.	(Yunnan Coach Factory)
Guangdong Dah Chong	廣東國際貿易旅游公司	30
Foodstuffs Co., Ltd.	(Guangdong International
	Trade Travel Service Co.)
Shanghai DCH Jiangnanfeng	上海市農業投資總公司	12.67
Co., Ltd.	(Shanghai Agriculture
	Investment Holding Co., Ltd.)
	上海浦東匯侖實業總公司	10.56
	(Shanghai Pudong Huilun
	Enterprise Holding Co., Ltd.)
Shenzhen Zhongliangdachang	中糧集團(深圳)有限公司	30
Foodstuffs Co., Ltd.	(COFCO (Shenzhen) Co., Ltd.)

– 53 –

GENERAL INFORMATION

APPENDIX II

Name of subsidiary being a joint
venture company established in		Percentage of registered
the PRC without the concept of		capital as at the Latest
general meetings(#)	Name of shareholder	Practicable Date
		(%)
中信泰富萬寧(聯合)開發有限公司	萬寧市土地開發整理儲備中心	20
(CITIC Pacific Wanning	(Wanning Municipality Land
United Development	Reserve Bureau)
Company Limited)
江陰興澄置業有限公司	中聯投資有限公司	30
(Jiangyin Xingcheng	(Sino Explorer Investments
Properties Co., Ltd.)	Limited)
江門市合禮汽車銷售服務有限公司	江門市華天實業投資有限公司	10
(Jiangmen Heli Motors Sale	(Jiangmen Huatian Investment
and Service Limited)	Limited)
雲南聯迪汽車服務有限公司	雲南中凱集團有限公司	20
(Yunnan Liandi Motors	(Yunnan Zhongkai Holdings
Service Limited)	Limited)
雲南寶泰隆汽車服務有限公司	雲南中凱集團有限公司	20
(Yunnan Bao Tailong Motors	(Yunnan Zhongkai Holdings
Service Limited)	Limited)
江門市怡誠汽車銷售服務有限公司	譚德華先生	20
(Jiangmen Yicheng Motors	(Mr. Tan Dehua)
Sale and Service Limited)
湛江市合榮汽車銷售服務有限公司	江門市華天實業投資有限公司	20
(Zhanjiang Herong Motors	(Jiangmen Huatian Investment
Sale and Service Limited)	Limited)
昆明合澤企業管理有限公司	雲南中凱集團有限公司	20
(Kunming Heze Corporate	(Yunnan Zhongkai Holdings
Management Limited)	Limited)
上海網富電子商貿有限公司	中國國際經濟諮詢公司	10
(Shanghai Wangfu Electrical	(China International
Trading Limited)	Economics Consulting
	Company)
廣州眾協汽車貿易有限公司	廣州市駿悅投資管理有限公司	20
(Guangzhou Zhongxie Motors	(Guangzhou Junyue
Trading Limited)	Investment Management
	Limited)

– 54 –

GENERAL INFORMATION

APPENDIX II

Name of subsidiary being a joint venture company established in Percentage of registered the PRC without the concept of capital as at the Latest general meetings[(#)] Name of shareholder Practicable Date (%) 昆明合達汽車銷售服務有限公司 廣州市駿悅投資管理有限公司 20 (Kunming Heda Motors Sale (Guangzhou Junyue and Service Limited) Investment Management Limited) 廣州合駿汽車貿易有限公司 李勵先生 10 (Guangzhou Hejun Motors (Mr. Li Li) Trading Limited)

• Although the information relating to these joint venture companies have been set out under this section, such joint venture companies established in the PRC under the relevant laws thereof have a different capital structure from, and do not have the same concept of shareholders general meetings as, subsidiaries of the Company established in other jurisdictions.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person (other than Directors and chief executive of CITIC Pacific) who had, or were deemed to have, interests or short positions in the shares and underlying shares of CITIC Pacific which would fall to be disclosed to CITIC Pacific under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who 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 other member of the Group.

4. PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Pursuant to Article 75 of the New Articles of Association of the Company, 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:

• (i) by the Chairman of the meeting; or

• (ii) by at least three members present in person or by proxy for the time being entitled to vote at the meeting; or

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

• (iv) by a member or members present in person 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.

– 55 –

GENERAL INFORMATION

APPENDIX II

5. LITIGATION

As at the Latest Practicable Date, neither CITIC Pacific nor any of its subsidiaries was engaged in any litigation, arbitration or claim of material importance and, so far as the Directors were aware, no litigation, arbitration or claim of material importance was pending or threatened against CITIC Pacific or any of its subsidiaries.

6. QUALIFICATIONS OF EXPERT(S)

Commerzbank is a licensed bank under the Banking Ordinance (Chapter 155 of the Laws of Hong Kong) and the independent financial adviser to the Independent Board Committee. Watson Wyatt is an independent actuary.

7. EXPERT(S)’ INTERESTS IN ASSETS

As at the Latest Practicable Date, each of Commerzbank and Watson Wyatt did not have any shareholding interest in any member of the Group nor the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities of any member of the Group.

As at the Latest Practicable Date, each of Commerzbank and Watson Wyatt did not have any direct or indirect interests in any assets which had since 31 December 2006 (being the date to which the latest published audited consolidated accounts of the Company were made up) been acquired or disposed of by or leased to any member of the Group, or which were proposed to be acquired or disposed of by or leased to any member of the Group.

8. CONSENTS OF EXPERT(S)

Each of Commerzbank and Watson Wyatt has given and has not withdrawn their respective written consents to the issue of this circular with the inclusion of the text of their letters and references to their names in the form and context in which they respectively appear.

9. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse changes in the financial or trading position of the Group since 31 December 2006 (being the date to which the latest published audited consolidated accounts of CITIC Pacific were made up).

10. GENERAL

• (a) The secretary of the Company is Ms. Stella Chan Chui Sheung, ACIS, MA and the qualified accountant of the Company appointed pursuant to Rule 3.24 of the Listing Rules is Mr. Leslie Chang Li Hsien, HKICPA, AICPA, NYSSCPA.

• (b) The registered office of the Company is at 32/F., CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.

• (c) The share registrars of the Company is Tricor Tengis Limited, 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

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

– 56 –

GENERAL INFORMATION

APPENDIX II

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours on a business day at the registered office of CITIC Pacific at 32/F., CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong up to and including 3 October 2007 and at the Extraordinary General Meeting:

• (a) the memorandum and new articles of association of the Company;

• (b) the letter from the Independent Board Committee, the text of which is set out on page 21 of this circular;

• (c) the letter from Commerzbank, the text of which is set out on pages 22 to 35 of this circular;

• (d) the valuation report from Watson Wyatt, the contents of which are summarised on pages 18 to 19 of this circular;

• (e) the letters of consent from Commerzbank and Watson Wyatt referred to in the paragraph headed ‘‘Consents of Expert(s)’’ above;

• (f) the draft rules of the Pre-IPO Share Option Scheme; and

• (g) the draft rules of the Post-IPO Share Option Scheme.

– 57 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [189 x 61] intentionally omitted <==

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

(Stock Code: 267)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of CITIC Pacific Limited (the “ Company ”) will be held at Island Ballroom, Level 5, Island Shangri-La Hotel, Two Pacific Place, Supreme Court Road, Hong Kong on Wednesday, 3 October 2007 at 3:30 p.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

• (1) “ THAT subject to the approval of the Proposed Spin-off being granted by the Stock Exchange, the proposed spin-off of Dah Chong Hong Holdings Limited (“ DCH Holdings ”), a subsidiary of the Company, and separate listing of the shares of DCH Holdings on the Main Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) as more particularly described in the circular of the Company dated 17 September 2007 contained in the document marked “A” and despatched to the shareholders of the Company of which the notice convening this meeting forms part and produced to the meeting and for the purpose of identification signed by the Chairman thereof (the “ Circular ”), subject to any variations or changes which are considered by the Company’s directors not to be material (the “ Proposed Spin-off ”), which constitutes a material dilution (within the meaning under the Rules Governing the Listing of Securities on the Stock Exchange) of the Company’s interest in DCH Holdings and its subsidiaries, be and is hereby approved and any one director of the Company be and is hereby authorised to do all such acts, to enter into all such transactions and arrangements and to make such amendments or alterations as may be necessary or expedient in order to give effect to the Proposed Spin-off.”

– 58 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (2) “ THAT the pre-IPO share option scheme and the post-IPO share option scheme of DCH Holdings, the terms of which are contained in the documents marked “B” and “C” respectively and produced to the meeting and for the purpose of identification signed by the Chairman thereof and summaries of which are set out in the Circular (the “ Share Option Schemes ”), be and are hereby approved and any one director of the Company be and is hereby authorised to do all such acts and to enter into all such transactions and arrangements as may be necessary or expedient in order to give effect to the Share Option Schemes.”

By Order of the Board CITIC Pacific Limited Stella Chan Chui Sheung Company Secretary

Hong Kong, 17 September 2007

Registered Office:

32/F., CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong.

Notes:

1. A member of the Company entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote in his stead in accordance with the Company’s Articles of Association. A proxy need not be a member of the Company.

2. A form of proxy for use at the Extraordinary General Meeting is enclosed herewith.

3. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be lodged at the share registrars of the Company in Hong Kong at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the appointed time for holding the Extraordinary General Meeting or any adjournment thereof (as the case may be) and in default thereof the form of proxy and such power or authority shall not be treated as valid.

4. Delivery of an instrument appointing a proxy shall not preclude a member from attending and voting in person at the Extraordinary General Meeting or any adjournment thereof and in such event, the instrument appointing a proxy shall be deemed to be revoked.

– 59 –