Computer And Technologies Holdings Limited — Capital/Financing Update 2006

Oct 27, 2006

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

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CHINA AEROSPACE INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

(Stock Code: 31)

Discloseable Transaction

The Establishment of the Joint Venture Company in the development of the Aerospace Technology Park in Shanghai

On 26 October 2006, New Century, a wholly-owned subsidiary of the Company, entered into the Promoters’ Agreement with Shanghai Minhang in respect of the establishment of the Joint Venture Company to be engaged in the development, management and operation of the Aerospace Technology Park in Shanghai, the PRC.

Pursuant to the Promoters’ Agreement, the transaction entered into would constitute a discloseable transaction of the Company under the Listing Rules.

A circular containing the particulars of the transaction pursuant to the Listing Rules will be despatched to shareholders as soon as practicable.

The Board of Directors of the Company is pleased to announce that New Century, a wholly-owned subsidiary, has entered into the Promoters’ Agreement on 26 October 2006 in respect of the establishment of a joint venture to develop, manage and operate the Aerospace Technology Park in Shanghai, the PRC.

Promoters’ Agreement dated 26 October 2006

• Parties: 1. New Century, a wholly-owned subsidiary of the Company

• Shanghai Minhang

To the best of the knowledge, information and belief of the Company’s Directors, having made all reasonable enquiries, Shanghai Minhang and its ultimate beneficial owner are third parties independent of the Company and its connected persons and are not connected persons of the Group.

Business scope of the the business of foundation facilities construction, residential property Joint Venture development and construction, gardening, installation engineering, construction Company: engineering, municipal engineering, property management; technology development, transfer, services and consultation in the fields of energy and computer system, etc.

Principal Activities the development, management and operation of the Aerospace of the Joint Venture Technology Park Company:

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Term:

50 years from the date of issue of the business license of the Joint Venture Company

Total registered capital: RMB200,000,000 (in HK$ equivalent) (HK$192,307,692.30)

Share of registered capital:

• (in HK$ equivalent) (% of total registered capital)

New Century Shanghai Minhang RMB160,000,000 RMB40,000,000 (HK$153,846,153.85) (HK$38,461,538.46) (80%) (20%)

Payment of registered capital

1st instalment in cash at the time of registration at the SAIC:

RMB80,000,000 RMB20,000,000

2nd instalment in cash RMB80,000,000 RMB20,000,000 within 1 year from the date of establishment of the Joint Venture Company:

Termination:

In the event that the Joint Venture Company fails to be established, the costs incurred in the establishment of the Joint Venture Company shall be split between New Century and Shanghai Minhang in proportion to their respective contributions to the registered capital of the Joint Venture Company. The party in default leading to the failure of the establishment of the Joint Venture Company shall compensate the other party for its losses.

The board of the Joint Venture Company will compose of nine members, three directors will be nominated by Shanghai Minhang and six directors will be nominated by New Century.

The Aerospace Technology Park

The Aerospace Technology Park will be established in Minhang District, Shanghai, the PRC. Enterprises engaged in aerospace and advanced-technology industries may be admitted into the Park.

It is intended that the registered capital of the Joint Venture Company will be applied towards the development of the basic foundation of the Park and the management and operation of the Park.

The establishment of the Joint Venture Company is subject to obtaining relevant approval from the PRC government authorities (including the SAIC). It is expected that the Joint Venture Company will be established within 2006 and will be consolidated as subsidiary in the accounts of the Group.

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Reasons for and benefit of investing in the Joint Venture Company

The Group is principally engaged in technological engineering, property investment and advanced technology-related manufacturing.

The Directors considered that the Company would benefit from the entering into the Promoters’ Agreement. The Aerospace Technology Park to be developed, managed and operated by the Joint Venture Company will serve as a platform to actively explore and realise orderly merge and interactive development of aerospace and advanced-technology industries in the PRC. As the developer, manager and operator of the Aerospace Technology Park, the Joint Venture Company will ensure that the projects of enterprises of the Aerospace Technology Park meet the relevant requirements of the Shanghai Municipal People’s Government, and assist enterprises entering the Aerospace Technology Park to attract capital investments or the Joint Venture Company may invest directly in potential hi-tech enterprises. As such, the transaction will strengthen the Group’s property investment and advanced technology-related investment. Given the recent positive prospects of developing industrial zone, technology zone and related property in mainland China, the Company would benefit from the development and operation of the Aerospace Technology Park.

The terms of the Promoters’ Agreement are negotiated after arm’s length negotiation. The Directors (including the Independent Non-Executive Directors) of the Company consider that the transaction was entered into on normal commercial terms and the terms of the Promoters’ Agreement are fair and reasonable and in the interests of the shareholders of the Company as a whole.

Funding

Pursuant to the Promoters’ Agreement, the amount of investment made by each party is restricted to their respective contributions in the registered capital of the Joint Venture Company. The funding of New Century’s capital contribution will be by way of internal resources.

Information on the joint venture partner

Shanghai Minhang is a limited liability company established in Shanghai and engages in the business of industry investment, property development and operation, gardening, installation engineering, construction engineering, municipal engineering, sale of construction materials, steel materials and metallic materials, technology development, transfer, services and consultation in aerospace technology.

Discloseable Transaction

As the percentage ratios in respect of the transaction under the Promoters’ Agreement are more than 5% and less than 25%, the investment by New Century in the Joint Venture Company would constitute a discloseable transaction under Chapter 14 of the Listing Rules.

General

A circular containing details of the transaction will be dispatched by the Company to its shareholders as soon as practicable.

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Terms used in this announcement

“Company” China Aerospace International Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange;

• “Group” The Company and its subsidiaries; “HK$” Hong Kong dollars, the legal currency of the Hong Kong Special Administrative Region of the PRC;

• “Joint Venture Company” 上海航天科技產業投資管理有限公司 (Shanghai Aerospace Technology Investment Company Limited)[#] , the joint venture company to be established by New Century and Shanghai Minhang in the PRC as a limited liability company pursuant to the Promoters’ Agreement;

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

• “New Century” 航科新世紀科技發展（深圳）有限公司 (CASIL New Century Technology Development (Shenzhen) Company Limited)[#] , a wholly-owned subsidiary of the Company established in the PRC as a limited liability company;

• “PRC” The People’s Republic of China (for the purpose of this announcement, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan);

• “Promoters’ Agreement” The Promoters’ Agreement dated 26 October 2006 and entered into by New Century and Shanghai Minhang;

• “RMB” Renminbi, the legal currency of the PRC; “SAIC” 上海市工商行政管理局 (Shanghai Administration for Industry and Commerce); and

• “Shanghai Minhang” 上海閔航投資建設有限公司 (Shanghai Minhang Investment Construction Company Limited) [#] , a company established in the PRC as a limited liability company.

# These PRC entities do not have English names, the English names set out in herein are for identification purpose only.

For the purpose of this announcement, the exchange rate of RMB:HK$ is RMB1.04: HK$1.00.

By order of the Board Zhao Liqiang Executive Director

Hong Kong, 26 October 2006

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As of the date of this announcement, the Board of Directors of the Company comprises:

Executive Directors Non-Executive Directors Independent Non-Executive Directors Mr Zhao Liqiang (President) Mr Ma Xingrui (Chairman) Mr Lee Hung Sang Mr Zhou Qingquan Mr Gong Bo Mr Chow Chan Lum, Charles Mr Zhao Yuanchang Mr Chen Dingyi Mr Luo Zhenbang Mr Wu Hongju Ms Chan Ching Har, Eliza Mr Guo Xianpeng Mr Wang Yujun Mr Xu Jianhua

“Please also refer to the published version of this announcement in China Daily”

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