Computer And Technologies Holdings Limited — AGM Information 2005

Apr 29, 2005

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 2004 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.

==> picture [247 x 85] intentionally omitted <==

(Stock Code: 31)

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES AND

NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of China Aerospace International Holdings Limited to be held at 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong at 11:00 a.m. on Friday, 27 May 2005 is set out on pages 10 to 12 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 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, 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.

28 April 2005

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Chairman
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates to Issue Shares and Repurchase Securities . . . . . . . . . . . . . .	4
Explanatory Statement on the Repurchase Proposal . . . . . . . . . . . . . . . . . . . . . .	4
Re-Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Voting Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix – Traded Prices of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10

−i −

DEFINITIONS

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

“Annual General Meeting”	the annual general meeting of the Company to be held on	the annual general meeting of the Company to be held on
	Friday, 27 May 2005 at 11:00 a.m., the notice	of which is
	set out on pages 10 to 12 of this circular
“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”	22 April, 2005, 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”
“SFO”	the Securities and Futures Ordinance (Cap.	571 of the
	laws of Hong Kong)

−1 −

DEFINITIONS

“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

−2 −

LETTER FROM THE CHAIRMAN

==> picture [247 x 85] intentionally omitted <==

(Stock Code: 31)

Executive Directors:

Mr. Rui Xiaowu (Chairman) Mr. Zhao Liqiang Mr. Zhou Qingquan

Mr. Zhao Yuanchang

Registered Office: 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong

Mr. Wu Hongju

Mr. Guo Xianpeng

Non-executive Directors:

Mr. Lee Hung Sang (Independent)

Mr. Chow Chan Lum, Charles (Independent)

Mr. Luo Zhenbang (Independent)

Mr. Li Jinsheng Mr. Xu Shilong

Mr. Chen Dingyi

Ms. Chan Ching Har, Eliza

28 April 2005

To Shareholders of the Company,

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO ISSUE SHARES AND REPURCHASE SECURITIES 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 Friday, 27 May 2005, the notice of which is set out on pages 10 to 12 of this document, resolutions will be proposed to grant the Directors general mandates to issue and repurchase Securities of the Company.

−3 −

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 mandate and to convene the Annual General Meeting. Details of the proposed renewal of the general mandates to issue Shares and to repurchase securities are set out below.

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 of approximately 428,483,980 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.

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 Shares, which is approximately 10 per cent. of the issued number of Shares of the Company 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

−4 −

LETTER FROM THE CHAIRMAN

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 31 December 2004 (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 31 December 2004).

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.

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.

−5 −

LETTER FROM THE CHAIRMAN

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:

Name Capacity China Aerospace Science & Technology Corporation Interests in controlled corporation Jetcote Investments Limited Beneficial owner Interests in controlled Corporation (Note 2) Burhill Company Limited Beneficial owner (Note 2) Sin King Enterprises Company Limited Beneficial owner (Note 2) Jet Square Developments International Limited Beneficial owner (Note 2) Star River Assets Limited Beneficial owner (Note 2) Full Power International Limited Beneficial owner (Note 2)	Number of shares interested 896,818,664 (Note 1) 5,490,456 891,328,208	% of issued shares capital 41.86% 0.26% 41.60%
	896,818,664 393,681,580 393,272,908 61,706,700 32,165,100 10,501,920	41.86% 18.38% 18.36% 2.88% 1.50% 0.49%
	891,328,208	41.60%

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. All these 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.

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, Sin King

−6 −

LETTER FROM THE CHAIRMAN

Enterprises Company Limited, Jet Square Developments International Limited, Star River Assets Limited and Full Power International Limited in the Company would be acting in concert increased from 41.86 per cent. 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. Zhao Yuanchang, Mr. Wu Hungju, Mr. Chen Dingyi and Mr. Lee Hung Sang 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. Zhao Liqiang and Mr. Luo Zhenbang retire 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 “Directors’ and Chief Executive’s Interests in Shares” of the Directors’ Report contained in the 2004 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 2004 Annual Report.

VOTING PROCEDURE

Pursuant to article 74 of the articles of association of the Company, the following categories of persons may demand the vote in respect of the resolutions to be put to at any general meeting 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

−7 −

LETTER FROM THE CHAIRMAN

• (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.

RECOMMENDATION

The Directors are of the opinion that the general mandates to issue shares and the Repurchase Proposal 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.

ANNUAL GENERAL MEETING

Notice of the Annual General Meeting is set out on pages 10 to 12 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 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, 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

−8 −

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$
2004
April	0.460	0.440
May	0.350	0.315
June	0.410	0.400
July	0.415	0.405
August	0.395	0.380
September	0.470	0.395
October	0.455	0.395
November	0.500	0.405
December	0.455	0.400
2005
January	0.430	0.385
February	0.500	0.400
March	0.490	0.425
1 April to Latest Practicable Date	0.450	0.405

−9 −

NOTICE OF ANNUAL GENERAL MEETING

==> picture [247 x 85] intentionally omitted <==

(Stock Code: 31)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of China Aerospace International Holdings Limited (the “Company”) will be held at 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong at 11:00 a.m. on Friday, 27 May 2005 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 2004.

2. To consider the re-election of the retiring Directors and to authorise the Board of Directors to fix the Director’s remuneration (Details and remuneration of the retiring Directors, please refer to the Annual Report 2004 of the Company).

3. To consider the re-appointment of Messrs. Deloitte Touche Tohmatsu ( ) 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;

4. (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

−10 −

NOTICE OF ANNUAL GENERAL MEETING

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 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

−11 −

NOTICE OF ANNUAL GENERAL MEETING

• (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.”

• Any other business.

By Order of the Board

Ken Chan

Company Secretary

Hong Kong, 28 April 2005

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 17th Floor, China Aerospace Centre, 143 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

−12 −