Computer And Technologies Holdings Limited — AGM Information 2004

Apr 30, 2004

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this document, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

If you have sold all your shares in China Aerospace International Holdings Limited, you should at once hand this document and the accompanying 2003 Annual Report and the form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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

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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED 航天科技國際集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES,

AMENDMENTS TO ARTICLES OF ASSOCIATION

AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of China Aerospace International Holdings Limited to be held at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong, on Thursday, 20 May, 2004 at 10:00 a.m. is set out on pages 19 to 29 of this document.

Whether or not you are able to attend the Annual General Meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the registered office of China Aerospace International Holdings Limited at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting. Completion of a form of proxy will not preclude you from attending and voting at the Annual General Meeting in person if you so wish.

26 April, 2004

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
General Mandates to Issue Shares and Repurchase Securities . . . . . . . . . . . . . . . . .	4
Explanatory Statement on the Repurchase Proposal . . . . . . . . . . . . . . . . . . . . . . . . .	5
Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Amendments to Articles of Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Voting Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix – Traded Prices of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

– i –

DEFINITIONS

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

“Amendment Ordinance”	the Companies (Amendment) Ordinance 2003
“Annual General Meeting”	the annual general meeting of the Company to be held
	on Thursday, 20 May, 2004 at 10:00 a.m., the notice of
	which is set out on pages 19 to 29 of this document
“Articles of Association”	the articles of association of the Company
“Board”	the board of Directors
“Company”	China Aerospace International Holdings Limited, a
	company incorporated in Hong Kong with limited
	liability, the securities of which are listed on the Stock
	Exchange
“Directors”	the directors of the Company
“HK$”	Hong Kong dollars
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Latest Practicable Date”	23 April, 2004, being the latest practicable date prior to
	the printing of this document for ascertaining certain
	information referred to in this document
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Register”	the Register of Members of the Company
“Registrar”	the Company’s share registrar, Standard Registrars
	Limited, Ground Floor, BEA Harbour View Centre, 56
	Gloucester Road, Wanchai, Hong Kong
“Repurchase Proposal”	the general and unconditional mandate proposed to be
	granted to the Directors to empower the Directors to
	repurchase Shares, details of which are set out in the
	section headed “General Mandates to Issue Shares and
	Repurchase Securities”

– 1 –

DEFINITIONS

“SFO”	the Securities and Futures Ordinance (Cap. 571 of the
	laws of Hong Kong
“Share(s)”	share(s) of HK$1.00 each in the share capital of the
	Company
“Shareholders”	holders of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers

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LETTER FROM THE CHAIRMAN

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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED 航天科技國際集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

Executive Directors:

Mr. Rui Xiaowu Mr. Zhou Qingquan Mr. Zhao Yuanchang Mr. Wu Hongju Mr. Guo Xianpeng

Registered Office: 21st Floor China Aerospace Tower Concordia Plaza 1 Science Museum Road Tsimshatsui East Kowloon Hong Kong

Non-executive Directors:

Mr. Lee Hung Sang (Independent)

Ms. Chan Ching Har, Eliza (Independent)

Mr. Chow Chan Lum, Charles (Independent)

Mr. Li Jinsheng

Mr. Xu Shilong

• Mr. Chen Dingyi

22 April, 2004

To Shareholders of the Company

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES,

AMENDMENTS TO ARTICLES OF ASSOCIATION

AND

NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

It is proposed that at the Annual General Meeting of China Aerospace International Holdings Limited to be held on Thursday, 20 May, 2004, the notice of which is set out on pages 19 to 29 of this document, resolutions will be proposed to, amongst other, grant the Directors general mandates to issue and repurchase Securities of the Company, appoint rotating directors of the Company and to amend the Articles of Association.

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LETTER FROM THE CHAIRMAN

In accordance with the Listing Rules, the Company is required to send to its shareholders an explanatory statement containing information reasonably necessary to enable the shareholders to make an informed decision on whether to vote for or against the resolution to approve the granting of a mandate to the Directors to exercise the powers of the Company to purchase its own securities. The purpose of this document is to set out such information in relation to the proposed rotating directors to be appointed, proposed mandate and the proposed amendments to Articles of Association and to convene the Annual General Meeting. Details of the proposed renewal of the general mandates to issue Shares and to repurchase securities and the proposed amendments to Articles of Association are set out below.

CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining the entitlements of Shareholders to vote at the Annual General Meeting, the Register of Members of the Company will be closed from 18 May, 2004 to 20 May, 2004 (both days inclusive).

In order to attend and vote at the forthcoming Annual General Meeting, Shareholders must lodge any transfers of Shares (with the relevant share certificates) with the Company’s registrar, Standard Registrars Limited of Ground Floor, BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong for registration by no later than 4:00 p.m. on 17 May, 2004.

GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES

At the Annual General Meeting, an ordinary resolution will be proposed whereby the Directors will be given a general and unconditional mandate to allot, issue and otherwise deal with new Shares representing up to 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue at the date the resolution is passed. As of the Latest Practicable Date, the issued number of Shares of the Company is 2,142,419,902. In addition, conditional upon the proposed resolution to authorise the repurchase of securities as is more particularly described under the paragraph headed “Shareholders’ Approval” under the section headed “Explanatory Statement on the Repurchase Proposal” being passed, an ordinary resolution will be proposed to authorise the Directors to allot, issue and otherwise deal with new Shares up to an amount equal to the aggregate nominal amount of the Shares purchased under the authority to repurchase. In accordance with the Listing Rules, the Company may not make a new issue of Shares or announce a proposed new issue of Shares for a period of 30 days after any purchase of Shares by it, other than an issue of securities pursuant to the exercise of warrants, share options or similar instruments requiring the Company to issue securities which are outstanding prior to such purchase, without the prior approval of the Stock Exchange.

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LETTER FROM THE CHAIRMAN

EXPLANATORY STATEMENT ON THE REPURCHASE PROPOSAL

Shareholders’ Approval

At the Annual General Meeting, an ordinary resolution will be proposed for Shareholders’ approval whereby the Directors will be given a general and unconditional mandate to exercise all powers of the Company to repurchase issued Shares subject to the criteria set out in this document.

While it is not possible to anticipate in advance any specific circumstances in which the Directors might think it is appropriate to repurchase securities, the Directors believe that the grant of a general mandate to repurchase securities, to a maximum 214,241,990 as of Latest Practicable Date, would give the Company additional flexibility that would be beneficial if the Shareholders approve the same. The repurchases may, depending on market conditions and funding arrangements of the Company at the time, lead to an enhancement of the net asset value per Share and/or earnings per Share. Shareholders can be assured that the Directors would only make such purchases in circumstances where they consider them to be in the best interests of the Company. On the basis of the consolidated financial position of the Company as at 31st December, 2003 (being the date to which the latest published audited accounts of the Company have been made up) and in particular the working capital or gearing position of the Company at that time and the number of Shares now in issue, the Directors consider that there may be a material adverse impact on the working capital or gearing position of the Company in the event that the proposed purchases were to be carried out in full at any time during the proposed purchase period. However, no purchase would be made in circumstances that would have a material adverse impact on the working capital or gearing position of the Company (as compared with the financial position as at 31st December, 2003).

Source of Funds

The Company is empowered by its Memorandum and Articles of Association to purchase its Shares. Purchase of Shares must be funded out of funds legally available for the purpose in accordance with the Company’s Memorandum and Articles of Association and the laws of Hong Kong.

Directors and Connected Persons

None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, any of the associates (as defined in the Listing Rules) of any of the Directors have any present intention, in the event that the grant to the Directors of a repurchase mandate is approved by the Shareholders, to sell Shares to the Company.

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LETTER FROM THE CHAIRMAN

No persons who are connected persons (as defined in the Listing Rules) of the Company have notified the Company that they have a present intention to sell Shares to the Company nor have they undertaken not to sell any of the Shares held by them to the Company in the event that the Company is authorised to make purchases of Shares. In accordance with the Listing Rules, the Company shall not knowingly purchase Shares from a connected person on the Stock Exchange and a connected person shall not knowingly sell his Shares to the Company.

Undertaking to the Stock Exchange

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make purchases pursuant to the proposed resolution in accordance with the Listing Rules, all applicable laws of Hong Kong, the jurisdiction in which the Company is incorporated, and in accordance with the Memorandum and Articles of Association of the Company.

Hong Kong Code on Takeovers and Mergers

If, as a result of a share repurchase, a shareholder’s proportionate interest in the voting capital of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code and, if such increase results in a change in control, may in certain circumstances give rise to an obligation to make a general offer for shares under Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, and according to the register of substantial shareholders’ interests maintained pursuant to Part XV of the Securities and Futures Ordinance (Chapter 571) of the Laws of Hong Kong, the following Shareholders were interested in 5 per cent., or more of the issued share capital of the Company:

		Proportion to total
	Number of	issued share capital
Name	Shares held	of the Company
China Aerospace Science &	896,818,664_(Note 1)_	41.86%
Technology Corporation
Jetcote Investments Limited	896,818,664	41.86%
Burhill Company Limited	393,681,580_(Note 2)_	18.37%
Sin King Enterprises Company Limited	393,272,908_(Note 2)_	18.36%

Notes:

1. These 896,818,664 Shares are held by Jetcote Investments Limited, a wholly-owned subsidiary of China Aerospace Science & Technology Corporation, and its subsidiaries.

2. Both companies are wholly-owned subsidiaries of Jetcote Investments Limited. The Shares held by them form part of the total number of Shares held by Jetcote Investments Limited.

– 6 –

LETTER FROM THE CHAIRMAN

In the event that the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the Repurchase Proposal, then (if the present shareholdings otherwise remain the same) the attributable shareholdings of China Aerospace Science & Technology Corporation, Jetcote Investments Limited, Burhill Company Limited and Sin King Enterprises Company Limited in the Company would be increased to approximately 46.51 per cent. of the issued share capital of the Company. The Directors consider that such increase would give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code and do not have the intention to repurchase the Shares to such extent at present. The Directors are not aware of any other consequence which would arise under the Takeovers Code as a result of any purchases by the Company of its Shares.

Miscellaneous

During the six months preceding the Latest Practicable Date, no Shares were purchased by the Company.

During each of the twelve months preceding the Latest Practicable Date, the highest and lowest traded prices for Shares on the Stock Exchange are also set out in the Appendix to this document.

RE-ELECTION OF DIRECTORS

Mr. Rui Xiaowu, Mr. Zhou Qingquan, Mr. Li Jinsheng and Ms. Chan Ching Har, Eliza retire by rotation at the AGM in accordance with Article 103(A) of the Company’s Articles of Association and, being eligible, offer themselves for re-election by the Shareholders. Mr. Guo Xianpengi retires at the AGM in accordance with Article 94 of the Company’s Articles of Association and, being eligible, offers himself for re-election by the Shareholders. The biographical details and interests in the shares of the Company of the retiring directors are provided under the sections headed “Biographical Details of Directors and Company Secretary” and “Directors’ and Chief Executive’s Interests in Shares” of the Directors’ Report contained in the 2003 Annual Report. Further details regarding the remuneration of the retiring directors are provided under the sections headed “Directors’ and Highest Paid Individuals’ Emolument” contained in the 2003 Annual Report.

AMENDMENTS TO ARTICLES OF ASSOCIATION

The Board has resolved to propose to the Shareholders of the Company for their consideration and, if thought fit, approval at the Annual General Meeting amendments to the

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LETTER FROM THE CHAIRMAN

Articles of Association. In order to make the Articles of Association consistent with the SFO, the Amendment Ordinance and the amended Appendix 3 of the Listing Rules, the Articles of Association is proposed to be amended as follows:

Proposed amendments to the Articles of Association

• Articles No. Existing Articles of Association the Articles of Association 2 “associate”, in relation to any Director, “associate”, in relation to any Director, shall mean: shall mean: (i) his spouse and any child or step(i) his spouse; child under the age of 21 years of the Director or of his spouse (ii) any child or step-child, natural or (“family interests”); and adopted, under the age of 18 years of the Director or of his spouse (together with (i) above, the “family interests”);

• (ii) the trustees, acting in their (iii) the trustees, acting in their capacity as such trustees, of any capacity as such trustees, of any trust of which he or any of his trust of which he or any of his family interests is a beneficiary family interests is a beneficiary or, or, in the case of a discretionary in the case of a discretionary trust, trust, is a discretionary object; i s ( t o h i s k n o w l e d g e ) a and discretionary object and any company (“trustee-controlled company”) in the equity capital of which the trustees, acting in their capacity as such trustees, are directly or indirectly interested so as to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Code on Takeovers and Mergers as being the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any other company which is its subsidiary (together, the “trustee interests”);

• (iv) a holding company of a trusteecontrolled company or a subsidiary of any such holding company; and

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LETTER FROM THE CHAIRMAN

Articles No.

2

3

Existing Articles of Association

• (iii) any company in the equity capital of which he and/or his family interests taken together are directly or indirectly interested so as to exercise or control the exercise of 35 per cent. (or such lower amount as may from time to time be specified in the Hong Kong Code on Takeovers and Mergers as being the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the Board of Directors and any other company which is its subsidiary or holding company or a fellow subsidiary of any such holding company.

Nil

Without prejudice to any special rights or restrictions for the time being attaching to any shares or any class of shares, any share may be issued upon such terms and conditions and with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by ordinary resolution determine (or, in the absence of any such determination or so far as the same may not make specific provision, as the Board may determine) and any preference share may, with the sanction of a special resolution, be issued on the terms that it is, or at the option of the Company or the holder thereof is liable, to be redeemed.

Proposed amendments to the Articles of Association

• (v) any company in the equity capital of which he, his family interests, any of the trustees referred to in (iii) above, acting in their capacity as such trustees, and/or any trustee interests taken together are directly or indirectly interested so as to exercise or control the exercise of 30 per cent. (or such other amount as may from time to time be specified in the Code on Takeovers and Mergers as being the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the Board of Directors and any other company which is its subsidiary or holding company or a fellow subsidiary of any such holding company.

“Listing Rules” shall mean the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

Without prejudice to any special rights or restrictions for the time being attaching to any shares or any class of shares, any share may be issued upon such terms and conditions and with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by ordinary resolution determine (or, in the absence of any such determination or so far as the same may not make specific provision, as the Board may determine) provided that where the Company issues shares which do not carry voting rights, the words “non-voting” shall appear in the designation of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights shall include the words “restricted voting” or “limited voting” and any preference share may, with the sanction of a special resolution, be issued on the terms that it is, or at the option of the Company or the holder thereof is liable, to be redeemed.

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

6 The Company may exercise any power conferred on the Company or permitted by or not prohibited by or not inconsistent with the Companies Ordinance or any matter defined in the existing Articles, other applicable law, code or regulation from time to time to acquire shares in the capital of the Company or warrants issued by the Company or to give directly or indirectly, by means of a loan, guarantee, the provision of security or otherwise, financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the Company or warrants issued by the Company, and should the Company acquire its own shares or warrants, neither the Company nor the Directors shall be required to select the shares or warrants to be acquired rateably or in any other particular manner as between the holders of shares or warrants of the same class or as between them and the holders of shares or warrants of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares or warrants provided always that in the case where the primary listing of any share capital of the Company is on The Stock Exchange of Hong Kong Limited any such acquisition or financial assistance shall only be made or given in accordance with any relevant rules, codes or regulations issued by The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission of Hong Kong and any other relevant regulatory authorities from time to time.

Proposed amendments to the Articles of Association

The Company may exercise any power conferred on the Company or permitted by or not prohibited by or not inconsistent with the Companies Ordinance or any matter defined in the existing Articles, other applicable law, code or regulation from time to time to acquire shares in the capital of the Company or warrants issued by the Company or to give directly or indirectly, by means of a loan, guarantee, the provision of security or otherwise, financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the Company or warrants issued by the Company, and should the Company acquire its own shares or warrants, neither the Company nor the Directors shall be required to select the shares or warrants to be acquired rateably or in any other particular manner as between the holders of shares or warrants of the same class or as between them and the holders of shares or warrants of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares or warrants provided always that in the case where the primary listing of any share capital of the Company is on The Stock Exchange of Hong Kong Limited any such acquisition or financial assistance shall only be made or given in accordance with any relevant rules, codes or regulations issued by The Stock Exchange of Hong Kong Limited, the Securities and Futures Commission of Hong Kong and any other relevant regulatory authorities from time to time in particular that if purchases are not made through the market or by tender shall be limited to a maximum price, and if purchases are by tender, tenders shall be available to all members alike.

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

36 The Board may, if it thinks fit, receive from any member willing to advance the same, and either in money or money’s worth, all or any part of the money uncalled and unpaid or instalments payable upon any shares held by him, and upon all or any of the moneys so advanced the Company may pay interest at such rate (if any) not exceeding twenty per cent. per annum as the Board may decide provided that until a call is made any payment in advance of a call shall not entitle the member to receive any dividend or to exercise any other rights or privileges as a member in respect of the shares or the due portion of the shares upon which payment has been advanced by such member before it is called up. The Board may at any time repay the amount so advanced upon giving to such member not less than one month’s notice in writing of its intention in that behalf, unless before the expiration of such notice the amount so advanced shall have been called up on the shares in respect of which it was advanced.

40(i) a fee of HK$2 (or such higher amount as may from time to time be permitted under the rules prescribed by The Stock Exchange of Hong Kong Limited) or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;

79(A) Nil

88 Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Board may from time to time approve.

Proposed amendments to the Articles of Association

The Board may, if it thinks fit, receive from any member willing to advance the same, and either in money or money’s worth, all or any part of the money uncalled and unpaid or instalments payable upon any shares held by him, and upon all or any of the moneys so advanced the Company may pay interest at such rate (if any) not exceeding twenty per cent. per annum as the Board may decide provided that the member shall not be entitled to participate in respect thereof in a dividend subsequently declared or to exercise any other rights or privileges as a member in respect of the shares or the due portion of the shares upon which payment has been advanced by such member before it is called up. The Board may at any time repay the amount so advanced upon giving to such member not less than one month’s notice in writing of its intention in that behalf, unless before the expiration of such notice the amount so advanced shall have been called up on the shares in respect of which it was advanced.

a fee of HK$2 (or such other amount as may from time to time be permitted under the rules prescribed by The Stock Exchange of Hong Kong Limited) or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;

In the event that any member is, under the Listing Rules, required to abstain from voting on any particular resolution at a general meeting of the Company or restricted to voting only for or only against any particular resolution at a general meeting of the Company, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.

Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Board may from time to time approve provided that, in any event, such form shall include a provision whereby the member may, if he so elects, indicate whether his proxy is directed to vote for or against the resolution in question.

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LETTER FROM THE CHAIRMAN

Articles No. Existing Articles of Association 91(A) Nil

Proposed amendments to the Articles of Association

Without prejudice to Article 80, where a member is a recognized clearing house within the meaning of the Securities and Futures Ordinance (Chapter 571) of the Laws of Hong Kong (or its nominee). It may authorise such person or persons as it thinks fit to act as its representative (or representatives) at any general meeting of the Company or any meeting of any class of members provided that, if more than one person is so authorized, the authorization must specify the number and class of shares in respect of which each such person is so authorized. The person so authorized under the provisions of this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee) which he represents as that clearing house (or its nominee) could exercise if it were an individual member of the Company.

95(C) An alternate Director shall (except when absent from Hong Kong) be entitled to receive notices of meetings of the Board and shall be entitled to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present and generally at such meeting to perform all the functions of his appointor as a Director and for the purposes of the proceedings at such meeting the provisions of these presents shall apply as if he (instead of his appointor) were a Director. If he shall be himself a Director or shall attend any such meeting as an alternate for more than one Director his voting rights shall be cumulative. If his appointor is for the time being absent from Hong Kong or otherwise not available or unable to act, his signature to any resolution in writing of the Directors shall be as effective as the signature of his appointor. To such extent as the Board may from time to time determine in relation to any committee of the Board, the foregoing provisions of this paragraph shall also apply mutatis mutandis to any meeting of any such committee of which his appointor is a member. An alternate Director shall not, save as aforesaid, have power to act as a Director nor shall he be deemed to be a Director for the purposes of these Articles.

An alternate Director shall (except when absent from Hong Kong) be entitled to receive notices of meetings of the Board and shall be entitled to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present and generally at such meeting to perform all the functions of his appointor as a Director and for the purposes of the proceedings at such meeting the provisions of these presents shall apply as if he (instead of his appointor) were a Director. If he shall be himself a Director or shall attend any such meeting as an alternate for more than one Director his voting rights shall be cumulative. If his appointor is for the time being absent from Hong Kong or otherwise not available or unable to act, his signature to any resolution in writing of the Directors shall be as effective as the signature of his appointor. To such extent as the Board may from time to time determine in relation to any committee of the Board, the foregoing provisions of this paragraph shall also apply mutatis mutandis to any meeting of any such committee of which his appointor is a member. An alternate Director shall not, save as aforesaid, have power to act as a Director nor shall he be deemed to be a Director for the purposes of these Articles and such alternate Director shall not be

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

Proposed amendments to the Articles of Association

deemed as the agent of the Director appointing him and such appointor shall not be vicariously liable for torts committed by his alternate Director unless expressly stated in the relevant notice in writing given by the relevant Director to the Company appointing such alternate Director.

101(A)(vii) if he shall be removed from office by a special resolution of the Company under Article 109.

if he shall be removed from office by an ordinary resolution of the Company under Article 109.

102(H)

Save as otherwise provided by these Articles, a Director shall not vote (nor be counted in the quorum) on any resolution of the Board in respect of any contract or arrangement in which he is to his knowledge materially interested, but this prohibition shall not apply to any of the following matters namely:

Save as otherwise provided by these Articles, a Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates has a material interest, but this prohibition shall not apply to any of the following matters namely:

• (i) any contract or arrangement for the giving to such Director any security or indemnity in respect of money lent by him or obligations undertaken by him for the benefit of the Company or any of its subsidiaries;

• (i) any contract or arrangement for the giving by the Company to such Director or his associate(s) any security or indemnity in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any of its subsidiaries;

• (ii) any contract or arrangement for the giving by the Company of any security to a third party in respect of a debt or obligation of the C o m p a n y o r a n y o f i t s subsidiaries which the Director has himself guaranteed or secured in whole or in part;

• (iii) any contract or arrangement by a Director to subscribe for shares, debentures or other securities of the Company issued or to be issued pursuant to any offer or invitation to members or debenture holders of the Company or any class thereof or to the public or any section thereof and does not provide in respect of any Director as such any privilege or advantage not accorded to any other members or debenture holders of the Company or any class thereof or to the public or any section thereof;

• (ii) any contract or arrangement for the giving by the Company to a third party any security or indemnity in respect of a debt or obligation of the Company or any of its subsidiaries which the Director or his associate(s) has himself/ themselves assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

• (iv) any contract or arrangement concerning an offer of the shares or debentures or other securities of or by the Company for subscription or purchase where the Director is or is to be interested as a participant in the underwriting or sub-underwriting of the offer;

• (v) any contract or arrangement in which the Director is interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue of his interest in shares or debentures or other securities of the Company;

• (vi) any contract or arrangement concerning any other company (not being a company in which the Director together with any of his associates own 5 per cent. or more (as defined in paragraph (I) of this Article)) in which he is interested directly or indirectly whether as a shareholder or an officer;

• (vii) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to Directors and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director as such any privilege or advantage not accorded to the employees to which such scheme of fund relates;

Proposed amendments to the Articles of Association

• (iii) any contract or arrangement concerning an offer of the shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

• (iv) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue of his/their interest in shares or debentures or other securities of the Company;

• (v) any contract or arrangement concerning any other company (not being a company in which the Director together with any of his a s s o c i a t e s i n a g g r e g a t e beneficially own 5 per cent. or more of the issued shares of any class of such company (or of any third company through which his interest or that of his associates is derived) or of the voting rights) in which the Director or his associate(s) is/are interested only, whether directly or indirectly as a shareholder or an officer or an executive or in which the Director or his associate(s) is/are beneficially interested in shares of that company;

• (vi) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to Directors, his associate(s) and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director or his associate(s), as such any privilege or advantage not accorded to the class of persons to which such scheme or fund relates;

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

Proposed amendments to the Articles of Association

• (viii) any proposal concerning the adoption, modification or operation of any share scheme involving the issue or grant of options over shares or other securities by the Company to, or for the benefit of the employees o f t h e C o m p a n y o r i t s subsidiaries under which the Director may benefit.

• (vii) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of any share scheme involving the issue or grant of options over shares or other securities by the Company to, or for the benefit of the employees of the Company or its subsidiaries under which the Director or his associate(s) may benefit.

• 102(I) A company shall be deemed to be a company in which a Director together with any of his associates own 5 per cent. or more if and so long as (but only if and so long as) he together with any of his associates are (either directly or indirectly) the holders of or beneficially interested in 5 per cent. or more of any class of the equity share capital of such company or of the voting rights available to members of such company. For the purpose of this paragraph there shall be disregarded any shares held by a Director as bare or custodian trustee and in which he has no beneficial interest, any shares comprised in a trust in which the Director’s interest is in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director is interested only as a unit holder.

A company shall be deemed to be a company in which a Director together with any of his associates in aggregate own 5 per cent. or more if and so long as (but only if and so long as) he together with any of his associates are (either directly or indirectly) the holders of or beneficially interested in 5 per cent. or more of the issued shares of any class of the equity share capital of such company (or of any third company through which his interest or that of his associate(s) is derived) or of the voting rights available to members of such company. For the purpose of this paragraph there shall be disregarded any shares held by a Director as bare or custodian trustee and in which he has no beneficial interest, any shares comprised in a trust in which the Director’s interest is in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director is interested only as a unit holder.

107

No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been given to the Company at least seven days before the date of the general meeting.

No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been given to the Company at least seven days before the date of the general meeting. The period for lodgment of such notices will commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than 7 days prior to the date of such general meeting.

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LETTER FROM THE CHAIRMAN

Articles No.

Existing Articles of Association

109 The Company may by special resolution remove any Director (including a Managing or other Executive Director) before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim which such Director may have for damages for any breach of any contract of service between him and the Company) and may elect another person in his stead. Any person so elected shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election, but shall not be taken into account in determining the Directors who are to retire by rotation at such meeting.

158 All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years after having been declared may be forfeited by the Board and shall revert to the Company.

Proposed amendments to the Articles of Association

The Company may by ordinary resolution remove any Director (including a Managing or other Executive Director) before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim which such Director may have for damages for any breach of any contract of service between him and the Company) and may elect another person in his stead. Any person so elected shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election, but shall not be taken into account in determining the Directors who are to retire by rotation at such meeting.

All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years or more after having been declared may be forfeited by the Board and shall revert to the Company.

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LETTER FROM THE CHAIRMAN

RECOMMENDATION

The Directors are of the opinion that the general mandates to issue shares and the Repurchase Proposal and the proposed amendments to the Articles of Association are in the best interests of the Company and its shareholders and recommend that you vote in favour of the resolutions to be proposed at the forthcoming Annual General Meeting.

VOTING PROCEDURE

In accordance with the Company’s Articles of Association, the following categories may demand the vote in respect of the resolutions to be put to the Annual General Meeting should be taken on a poll:

• (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.

A poll may be so demanded before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll.

ANNUAL GENERAL MEETING

Notice of the Annual General Meeting is set out on pages 19 to 29 of this document.

A form of proxy is enclosed with this document for use at the Annual General Meeting. Whether or not you intend to be present at the meeting, you are requested to complete and return the enclosed form of proxy to the registered office of the Company at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the holding of the meeting. Completion of a form of proxy will not preclude you from attending and voting at the Annual General Meeting in person if you so wish.

Yours faithfully, Rui Xiaowu

Chairman

– 17 –

TRADED PRICES OF SHARES

APPENDIX

During the 12 months preceding the Latest Practicable Date, the highest and lowest traded prices for Shares on the Stock Exchange were as follows:

		Per Share
Month	Highest	Lowest
	HK$	HK$
2003
April	0.3050	0.1870
May	0.3250	0.1950
June	0.4050	0.3100
July	0.4750	0.3400
August	0.4954	0.4150
September	0.5800	0.4650
October	0.8100	0.5200
November	0.6800	0.5300
December	0.6300	0.5200
2004
January	0.7300	0.5400
February	0.7100	0.6000
March	0.6700	0.5100
April	0.5700	0.4650

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NOTICE OF ANNUAL GENERAL MEETING

==> picture [143 x 41] intentionally omitted <==

CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED 航天科技國際集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of China Aerospace International Holdings Limited (the “Company”) will be held at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong on Thursday, 20 May, 2004 at 10:00 a.m. for the following purposes:

1. To receive and adopt the Audited Accounts of the Company and the Reports of the Directors and the Auditors of the Company for the year ended 31 December, 2003.

2. To consider the re-election of the retiring Directors and to approve the proposed Directors’ fee.

3. To consider the re-appointment of Messrs. Deloitte Touche Tohmatsu (德勤‧關 黃陳方會計師行 ) as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

As special business, to consider and, if thought fit, passing the following resolutions as Ordinary Resolutions:

1. “ THAT :

2. (i) subject to paragraph (iii) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers be and is hereby generally and unconditionally approved;

3. (ii) the approval in paragraph (i) above shall be in addition to any other authorisation given to the Directors of the Company and shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options, including warrants to subscribe for shares, which might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (iii) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (i) above, otherwise than pursuant to a Rights Issue (as hereinafter defined) or on the exercise of any options granted under the share option scheme of the Company or on the exercise of the conversion rights attaching to any convertible notes of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this resolution, and the said approval shall be limited accordingly; and

• (iv) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

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

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

• (c) the passing of an ordinary resolution of the Company in general meeting revoking or varying the authority set out in this resolution;

“Rights Issue” means an offer of shares open for a period fixed by the Directors of the Company to holders of shares whose names appear on the Register of Members of the Company on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

5. “ THAT :

• (i) subject to paragraph (ii) below, the exercise by the Directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to repurchase issued shares or any other rights to subscribe shares in the capital of the Company in each case on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the securities of the Company may be listed and which is recognised by the Securities and Futures Commission of Hong Kong and the Stock

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NOTICE OF ANNUAL GENERAL MEETING

Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

• (ii) the aggregate nominal amount of share capital of the Company which are authorised to be repurchased by the Directors of the Company pursuant to the approval in paragraph (i) above during the Relevant Period shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution and the said approval shall be limited accordingly; and

• (iii) for the purposes of this Resolution:

“Relevant Period” means the period from the passing of this Resolution until whichever is the earliest of:

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

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

• (c) the passing of an ordinary resolution of the Company in the general meeting revoking or varying the authority set out in this resolution.”

• “ THAT conditional on the passing of the Resolution No. 5 set out in the notice of the annual general meeting at which this Resolution is considered, the general mandate granted to the Directors of the Company and for the time being in force to exercise the powers of the Company to allot, issue and deal with new shares pursuant to the Resolution No. 4 set out in the said notice be and is hereby extended by the addition to the aggregate nominal amount of the share capital of the Company which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to the said Resolution No. 5, provided that such extended amount shall not exceed 10 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing this Resolution.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special business to amend the Articles of Association by passing the following resolution as a Special Resolution:

2. “ THAT the Articles of Association be and are hereby amended as follows:

3. (a) by deleting the definition of “associate” in Article 2 in its entirety and replace it with the following definition:

   • ““associate”, in relation to any Director, shall mean:

   • (i) his spouse;

   • (ii) any child or step-child, natural or adopted, under the age of 18 years of the Director or of his spouse (together with (i) above, the “family interests”);

   • (iii) the trustees, acting in their capacity as such trustees, of any trust of which he or any of his family interests is a beneficiary or, in the case of a discretionary trust, is (to his knowledge) a discretionary object and any company (“trustee-controlled company”) in the equity capital of which the trustees, acting in their capacity as such trustees, are directly or indirectly interested so as to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Code on Takeovers and Mergers as being the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the board of directors and any other company which is its subsidiary (together, the “trustee interests”);

   • (iv) a holding company of a trustee- controlled company or a subsidiary of any such holding company; and

   • (v) any company in the equity capital of which he, his family interests, any of the trustees referred to in (iii) above, acting in their capacity as such trustees, and/or any trustee interests taken together are directly or indirectly interested so as to exercise or control the exercise of 30 per cent. (or such other amount as may from time to time be specified in the Code on Takeovers and Mergers as being the level for triggering a mandatory general offer) or more of the voting power at general meetings, or to control the composition of a majority of the Board of Directors and any other company which is its subsidiary or holding company or a fellow subsidiary of any such holding company.”

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NOTICE OF ANNUAL GENERAL MEETING

• (b) by adding the following definition of “Listing Rules” to Article 2:

““Listing Rules” shall mean the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited,”

• (c) by deleting Article 3 in its entirety and replacing it with the following:

“Without prejudice to any special rights or restrictions for the time being attaching to any shares or any class of shares, any share may be issued upon such terms and conditions and with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, voting, return of capital or otherwise, as the Company may from time to time by ordinary resolution determine (or, in the absence of any such determination or so far as the same may not make specific provision, as the Board may determine) provided that where the Company issues shares which do not carry voting rights, the words “non-voting” shall appear in the designation of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights shall include the words “restricted voting” or “limited voting” and any preference share may, with the sanction of a special resolution, be issued on the terms that it is, or at the option of the Company or the holder thereof is liable, to be redeemed.”

• (d) by deleting Article 6 in its entirety and replacing it with the following:

“The Company may exercise any power conferred on the Company or permitted by or not prohibited by or not inconsistent with the Companies Ordinance or any matter defined in the existing Articles, other applicable law, code or regulation from time to time to acquire shares in the capital of the Company or warrants issued by the Company or to give directly or indirectly, by means of a loan, guarantee, the provision of security or otherwise, financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the Company or warrants issued by the Company, and should the Company acquire its own shares or warrants, neither the Company nor the Directors shall be required to select the shares or warrants to be acquired rateably or in any other particular manner as between the holders of shares or warrants of the same class or as between them and the holders of shares or warrants of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares or warrants provided always that in the case where the primary listing of any share capital of the Company is on The Stock Exchange of Hong Kong Limited any such acquisition or financial assistance shall only be made or given in accordance with any relevant rules, codes or regulations issued by The Stock Exchange of Hong Kong

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NOTICE OF ANNUAL GENERAL MEETING

Limited, the Securities and Futures Commission of Hong Kong and any other relevant regulatory authorities from time to time in particular that if purchases are not made through the market or by tender shall be limited to a maximum price, and if purchases are by tender, tenders shall be available to all members alike.”

• (e) by deleting Article 36 in its entirety and replacing it with the following:

“The Board may, if it thinks fit, receive from any member willing to advance the same, and either in money or money’s worth, all or any part of the money uncalled and unpaid or instalments payable upon any shares held by him, and upon all or any of the moneys so advanced the Company may pay interest at such rate (if any) not exceeding twenty per cent. per annum as the Board may decide provided that the member shall not be entitled to participate in respect thereof in a dividend subsequently declared or to exercise any other rights or privileges as a member in respect of the shares or the due portion of the shares upon which payment has been advanced by such member before it is called up. The Board may at any time repay the amount so advanced upon giving to such member not less than one month’s notice in writing of its intention in that behalf, unless before the expiration of such notice the amount so advanced shall have been called up on the shares in respect of which it was advanced.”

• (f) by deleting Article 40(i) in its entirety and replacing it with the following:

“a fee of HK$2 (or such other amount as may from time to time be permitted under the rules prescribed by The Stock Exchange of Hong Kong Limited) or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;”

• (g) by adding the following new Article 79(A) immediately after the original Article 79:

“In the event that any member is, under the Listing Rules, required to abstain from voting on any particular resolution at a general meeting of the Company or restricted to voting only for or only against any particular resolution at a general meeting of the Company, any votes cast by or on behalf of such member in contravention of such requirement or restriction shall not be counted.”

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NOTICE OF ANNUAL GENERAL MEETING

• (h) by deleting Article 88 in its entirety and replacing it with the following:

“Every instrument of proxy, whether for a specified meeting or otherwise, shall be in such form as the Board may from time to time approve provided that, in any event, such form shall include a provision whereby the member may, if he so elects, indicate whether his proxy is directed to vote for or against the resolution in question.”

• (i) by adding the following new Articles 91(A) immediately after the original Article 91:

“Without prejudice to Article 80, where a member is a recognized clearing house within the meaning of the Securities and Futures Ordinance (Chapter 571) of the Laws of Hong Kong (or its nominee). It may authorise such person or persons as it thinks fit to act as its representative (or representatives) at any general meeting of the Company or any meeting of any class of members provided that, if more than one person is so authorized, the authorization must specify the number and class of shares in respect of which each such person is so authorized. The person so authorized under the provisions of this Article shall be entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee) which he represents as that clearing house (or its nominee) could exercise if it were an individual member of the Company.”

• (j) by deleting Article 95(C) in its entirety and replacing it with the following:

“An alternate Director shall (except when absent from Hong Kong) be entitled to receive notices of meetings of the Board and shall be entitled to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present and generally at such meeting to perform all the functions of his appointor as a Director and for the purposes of the proceedings at such meeting the provisions of these presents shall apply as if he (instead of his appointor) were a Director. If he shall be himself a Director or shall attend any such meeting as an alternate for more than one Director his voting rights shall be cumulative. If his appointor is for the time being absent from Hong Kong or otherwise not available or unable to act, his signature to any resolution in writing of the Directors shall be as effective as the signature of his appointor. To such extent as the Board may from time to time determine in relation to any committee of the Board, the foregoing provisions of this paragraph shall also apply mutatis mutandis to any meeting of any such committee of which his appointor is a member. An alternate Director shall not, save as aforesaid, have power to act as a Director nor shall he be deemed to be a Director for the purposes of these Articles and such alternate Director shall not be deemed as the

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NOTICE OF ANNUAL GENERAL MEETING

agent of the Director appointing him and such appointor shall not be vicariously liable for torts committed by his alternate Director unless expressly stated in the relevant notice in writing given by the relevant Director to the Company appointing such alternate Director.”

• (k) by deleting Article 101(A)(vii) in its entirety and replacing it with the following:

“if he shall be removed from office by an ordinary resolution of the Company under Article 109.”

• (l) by deleting Article 102(H) in its entirety and replacing it with the following:

“Save as otherwise provided by these Articles, a Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his associates has a material interest, but this prohibition shall not apply to any of the following matters namely:

• (i) any contract or arrangement for the giving by the Company to such Director or his associate(s) any security or indemnity in respect of money lent or obligations incurred or undertaken by him or any of them at the request of or for the benefit of the Company or any of its subsidiaries;

• (ii) any contract or arrangement for the giving by the Company to a third party any security or indemnity in respect of a debt or obligation of the Company or any of its subsidiaries which the Director or his associate(s) has himself/ themselves assumed responsibility in whole or in part and whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (iii) any contract or arrangement concerning an offer of the shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase where the Director or his associate(s) is/are or is/are to be interested as a participant in the underwriting or subunderwriting of the offer;

• (iv) any contract or arrangement in which the Director or his associate(s) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue of his/their interest in shares or debentures or other securities of the Company;

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NOTICE OF ANNUAL GENERAL MEETING

• (v) any contract or arrangement concerning any other company (not being a company in which the Director together with any of his associates in aggregate beneficially own 5 per cent. or more of the issued shares of any class of such company (or of any third company through which his interest or that of his associates is derived) or of the voting rights) in which the Director or his associate(s) is/are interested only, whether directly or indirectly as a shareholder or an officer or an executive or in which the Director or his associate(s) is/are beneficially interested in shares of that company;

• (vi) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of a pension fund or retirement, death or disability benefits scheme which relates both to Directors, his associate(s) and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director or his associate(s), as such any privilege or advantage not accorded to the class of persons to which such scheme or fund relates;

• (vii) any proposal or arrangement concerning the benefit of employees of the Company or its subsidiaries including the adoption, modification or operation of any share scheme involving the issue or grant of options over shares or other securities by the Company to, or for the benefit of the employees of the Company or its subsidiaries under which the Director or his associate(s) may benefit.”

• (m) by deleting Article 102(I) in its entirety and replacing it with the following:

“A company shall be deemed to be a company in which a Director together with any of his associates in aggregate own 5 per cent. or more if and so long as (but only if and so long as) he together with any of his associates are (either directly or indirectly) the holders of or beneficially interested in 5 per cent. or more of the issued shares of any class of the equity share capital of such company (or of any third company through which his interest or that of his associate(s) is derived) or of the voting rights available to members of such company. For the purpose of this paragraph there shall be disregarded any shares held by a Director as bare or custodian trustee and in which he has no beneficial interest, any shares comprised in a trust in which the Director’s interest is in reversion or remainder if and so long as some other person is entitled to receive the income thereof, and any shares comprised in an authorised unit trust scheme in which the Director is interested only as a unit holder.”

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NOTICE OF ANNUAL GENERAL MEETING

• (n) by deleting Article 107 in its entirety and replacing it with the following:

“No person, other than a retiring Director, shall, unless recommended by the Board for election, be eligible for election to the office of Director at any general meeting, unless notice in writing of the intention to propose that person for election as a Director and notice in writing by that person of his willingness to be elected shall have been given to the Company at least seven days before the date of the general meeting. The period for lodgment of such notices will commence no earlier than the day after the despatch of the notice of the general meeting appointed for such election and end no later than 7 days prior to the date of such general meeting.”

• (o) by deleting Article 109 in its entirety and replacing it with the following:

“The Company may by ordinary resolution remove any Director (including a Managing or other Executive Director) before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim which such Director may have for damages for any breach of any contract of service between him and the Company) and may elect another person in his stead. Any person so elected shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election, but shall not be taken into account in determining the Directors who are to retire by rotation at such meeting.”

• (p) by deleting Article 158 in its entirety and replacing it with the following:

“All dividends or bonuses unclaimed for one year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six years or more after having been declared may be forfeited by the Board and shall revert to the Company.”

1. Any other business.

By Order of the Board

Ken Chan

Company Secretary

Hong Kong, 22 April, 2004

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NOTICE OF ANNUAL GENERAL MEETING

Notes :

1. Any member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. To be valid, a form of proxy, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority must be deposited at the registered office of the Company at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED 航天科技國際集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

PROXY FORM

Form of proxy for the Annual General Meeting to be held at 21st Floor, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong on Thursday, 20 May 2004 at 10:00 a.m.

I/We [(note 1)]

of

being the registered holder(s) of [(note 2)]

shares of HK$1.00 each

in the capital of China Aerospace International Holdings Limited (the “Company”) hereby appoint [(note 3)] of

or failing him, the Chairman of the meeting, as my/our proxy to attend on my/our behalf at the meeting (and at any adjournment thereof) to vote for me/us in my/our name(s) in respect of the resolutions set out in the notice of the meeting (with or without modifications) as hereunder indicated and in respect of any other matters to be considered in the meeting.

	ORDINARY RESOLUTIONS	ORDINARY RESOLUTIONS		FOR(Note 4)	AGAINST(Note 4)
1.	To receive and adopt the Audited Accounts of the Company and the Reports of the Directors and the Auditors for theyear ended 31st December, 2003.
2A.	(i) To re-elect Mr. Rui Xiaowu as a Director. (ii) To re-elect Mr. Zhou Qingquan as a Director. (iii) To re-elect Mr. Guo Xianpeng as a Director. (iv) To re-elect Mr. Li Jinsheng as a Director. (v) To re-elect Ms. Chan ChingHar, Eliza as a Director.
2B.	To approve the payment of HK$100,000 to each of the directors as director’s fee for theyear ending31 December, 2004.
3.	To re-appoint Messrs. Deloitte Touche Tohmatsu (德勤‧關黃陳方會計 師行) as the auditors of the Company and to authorise the Board of Directors to fix their remuneration.
4.	To grant a general mandate to the Directors to allot, issue and deal with new shares not exceeding 20 per cent. of the issued share capital of the Company.
5.	To grant a general mandate to the Directors to repurchase shares and warrants of the Company not exceeding 10 per cent. of the issued share capital of the Company.
6.	To extend the general mandate granted to the Directors to allot, issue and deal with new shares not exceeding the amount of shares repurchased by the Company.
	SPECIAL RESOLUTION
7.	To amend the Articles of Association at set out in the notice of annual general meeting of the Company dated 22 April, 2004.
Dated this day of		, 2004 Signature_(Note 7)_

Notes:

1. Full name(s) and address(es) to be inserted in BLOCK CAPITALS .

2. Please insert the number of shares of HK$1.00 each in the capital of the Company registered in your name(s); if no number is inserted, this form of proxy will be deemed to relate to all the shares of the Company registered in your name(s).

3. Full name and address of proxy to be inserted in BLOCK CAPITALS. IF NOT COMPLETED, THE CHAIRMAN OF THE MEETING WILL ACT AS YOUR PROXY.

4. IMPORTANT: IF YOU WISH TO VOTE FOR ANY RESOLUTION, TICK IN THE BOX MARKED “FOR” BESIDE THE APPROPRIATE RESOLUTION. IF YOU WISH TO VOTE AGAINST ANY RESOLUTION, TICK IN THE BOX MARKED “AGAINST” BESIDE THE APPROPRIATE RESOLUTION . If no direction is given, the proxy will be entitled to vote or abstain as he thinks fit. Your proxy will be entitled to vote or abstain at his discretion on any resolution properly put to the meeting other than those referred to in the notice convening the meeting.

5. To be valid, this form of proxy, together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority must be deposited at the registered office of the Company at 21/F, China Aerospace Tower, Concordia Plaza, 1 Science Museum Road, Tsimshatsui East, Kowloon, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

6. In the case of joint holders of a share, the vote of the person, whether attending in person or by proxy, whose name stands first on the Register of Members of the Company in respect of such share shall be accepted to the exclusion of the vote(s) of the other joint holder(s).

7. This form of proxy must be signed by you or your attorney duly authorised in writing or, if you are a corporation, must either be executed under seal or under the hand of an officer or attorney duly authorised.

8. The proxy need not be a member of the Company but must attend the meeting in person to represent you.

9. 9 Completion and delivery of this form of proxy shall not preclude you from attending and voting in person if you so wish.

10. Any alteration to this form of proxy must be initialled by the person who signs it.