Digital China Holdings Limited — Proxy Solicitation & Information Statement 2001

Aug 13, 2001

COMPANION BUILDING MATERIAL INTERNATIONAL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

Notice of The Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of the Company will be held at Suite 2901, 29th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong at 10:30 a.m. on 7th September, 2001 for the following purposes:-

1. To receive and adopt the audited consolidated financial statement of accounts and the reports of the directors and auditors for the year ended 31st March, 2001.

2. To re-elect retiring directors, determine a maximum number of directors, authorise the board of directors to appoint additional directors up to the maximum number and fix the directors' remuneration.

3. To re-appoint auditors and authorise the board of directors to fix their remuneration.

As Special Business, to consider and, if thought fit, pass each of the following resolutions 4, 5 and 6 as an Ordinary Resolution of the Company:-

ORDINARY RESOLUTIONS

1. "THAT:-

(a) subject to paragraph (c) of this Resolution, the exercise by the directors of the Company (the "Directors") 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 would or might require the exercise of such powers, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

(b) the approval in paragraph (a) of this Resolution shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period;

(c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this Resolution otherwise than pursuant to (i) a Rights Issue (as defined below); (ii) the exercise of warrants in the Company or the exercise of options granted under any share option scheme adopted by the Company; (iii) an issue of shares in lieu of the whole or part of a dividend on shares in accordance with the Company's bye-laws; or (iv) any offer of any class of securities of the Company made pro rata (apart from fractional entitlements) by the Company to holders of such class of securities (excluding for that purpose any holder whose registered addresses as shown in the register of members of the Company on the relevant record date are outside Hong Kong), shall not exceed 20 per cent. of the aggregate nominal amount of the share capital of the Company in issue as at the time of passing this Resolution and to be issued pursuant to the Deed (as defined in the circular of the Company dated 13th August, 2001), and the said approval shall be limited accordingly; and

(d) for the purpose of this Resolution:-

"Relevant Period" means the period from the passing of this Resolution until whichever is the earliest of:-

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the bye-laws of the Company to be held; and

(iii) the revocation or variation of this Resolution by an ordinary resolution of the shareholders of the Company in general meeting.

"Rights Issue" means an offer of shares open for a period fixed by the Directors to holders of shares on the register of members on a fixed record date in proportion to their then holdings of such shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction, or the requirements of any recognised regulatory body or any stock exchange)."

1. "THAT:-

(a) subject to paragraphs (c) and (d) of this Resolution, the exercise by the directors of the Company (the "Directors") during the Relevant Period (as hereinafter defined) of all powers of the Company to (i) repurchase issued shares in the capital of the Company and (ii) repurchase warrants or other rights to subscribe for shares in the capital of the Company in each case on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") or any other stock exchange on which the securities of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose ("Recognised Stock Exchange"), subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time or those of any other Recognised Stock Exchange, be and is hereby generally and unconditionally approved;

(b) the approval in paragraph (a) of this Resolution shall be in addition to any other authorisation given to the Directors and shall authorise the Directors on behalf of the Company during the Relevant Period to procure the Company to purchase its shares and warrants at a price determined by the Directors;

(c) the aggregate nominal amount of share capital of the Company repurchased or agreed conditionally or unconditionally to be repurchased by the Company pursuant to the approval in paragraph (a) of this Resolution 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 time of passing this Resolution and to be issued pursuant to the Deed (as defined in the circular of the Company dated 13th August, 2001), and the said approval shall be limited accordingly;

(d) the aggregate subscription rights attaching to the warrants of the Company repurchased or agreed conditionally or unconditionally to be repurchased by the Company pursuant to the approval in paragraph (a) of this Resolution during the Relevant Period shall not exceed 10 per cent. of the aggregate subscription rights attaching to the warrants in issue or outstanding as at the time of passing this Resolution, and the said approval shall be limited accordingly; and

(e) for the purpose of this Resolution:-

"Relevant Period" means the period from the passing of this Resolution until whichever is the earliest of:-

(i) the conclusion of the next annual general meeting of the Company;

(ii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable law or the bye-laws of the Company to be held; and

(iii) the revocation or variation of this Resolution by an ordinary resolution of the shareholders of the Company in general meeting."

1. "THAT conditional upon the passing of the Ordinary Resolutions numbered 4 and 5 as set out in the notice of the meeting of which this Resolution forms part, the aggregate nominal amount of the shares in the capital of the Company which are repurchased by the Company pursuant to and in accordance with the said Ordinary Resolution numbered 5 shall be added to the aggregate nominal amount of the share capital of the Company that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to and in accordance with the said Ordinary Resolution numbered 4."

2. To transact any other ordinary business of the Company.

By Order of the Board

Lee Lai Yee, Anita

Secretary

Dated: 10th August, 2001

Principal place of business in Hong Kong:-

Suite 2901

29th Floor

Great Eagle Centre

23 Harbour Road

Wanchai

Hong Kong

Notes:-

1. A member entitled to attend and vote at the meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the meeting. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of such power or authority), must be deposited at the office of the branch share registrar of the Company in Hong Kong, Standard Registrars Limited at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for the holding of the meeting or any adjourned meeting.

3. With regard to the Ordinary Resolution numbered 4 above, the Directors wish to state that they have no immediate plans to issue any new shares of the Company save pursuant to the exercise of the existing warrants of the Company and the option granted under the Deed.

"Please also refer to the published version of this announcement in the Hong Kong i-mail"