Huscoke Holdings Limited — Proxy Solicitation & Information Statement 2007

Apr 30, 2007

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shanghai Industrial Holdings Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Incorporated in Hong Kong with limited liability) (Stock Code: 363)

PROPOSED GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

AND RE-ELECTION OF RETIRING DIRECTORS

A notice convening the 2007 Annual General Meeting of Shanghai Industrial Holdings Limited to be held at the Conference Room of the Company at 26th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong on Wednesday, 30th May 2007 at 3:00 p.m., is set out in the Annual Report.

Whether or not you are able to attend the meeting, please complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting. Completion and return of the form of proxy shall not preclude you from attending and voting at the 2007 Annual General Meeting if you so wish.

This circular contains all the information required pursuant to the Listing Rules to be given to the Shareholders.

30th April 2007

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Chairman
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Proposed general mandates to repurchase
	the Company’s own Shares and to issue Shares . . . . . . . . . . . . . . . . . . . .	4
3.	Proposed re-election of retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	2007 Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
5.	Demand for poll at the Annual General Meeting . . . . . . . . . . . . . . . . . . . . .	5
6.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I – Explanatory Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
Appendix II – Biographical details of the retiring Directors
	proposed to be re-elected. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9

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DEFINITIONS

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

Term Meaning

• “2007 Annual General Meeting” the annual general meeting of the Company to be held on Wednesday, 30th May 2007 at 3:00 p.m. at the Conference Room of the Company at 26th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong;

• “Annual Report” the annual report 2006 of the Company being despatched to the Shareholders together with this circular;

• “Company” Shanghai Industrial Holdings Limited, a company incorporated in Hong Kong with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (stock code: 363);

• “Connected Person” a director, chief executive or substantial shareholder of the Company or any of its subsidiaries or their respective associates (as defined under the Listing Rules);

• “Director(s)” director(s) of the Company;

• “Group” the Company and its subsidiaries;

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC;

• “Issue Mandate” the general and unconditional mandate to allot, issue and deal with Shares (and securities exercisable or convertible into Shares) with an aggregate nominal value not exceeding 20 percent of the aggregate nominal amount of the Shares in issue at the date of passing of the resolution;

• “Latest Practicable Date” 20th April 2007 which is the latest practicable date prior to the printing of this circular for ascertaining certain information contained in it;

• “Listing Rules”

• Rules Governing the Listing of Securities on the Stock Exchange;

• “Notice”

• the notice convening the 2007 Annual General Meeting dated 30th April 2007 as set out in the Annual Report;

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DEFINITIONS

• “PRC”

the People’s Republic of China;

“Repurchase Mandate” the general and unconditional mandate to exercise all powers of the Company to repurchase issued and fully-paid Shares not exceeding 10 percent of the aggregate nominal amount of the Shares in issue at the date of passing of the resolution; “SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)” ordinary share(s) of $0.10 each in the share capital of the Company;

• “Shareholder(s)” registered holder(s) of Share(s);

• “SIIC” Shanghai Industrial Investment (Holdings) Co. Ltd., a company incorporated in Hong Kong with limited liability;

• “SI Pharmaceutical” (Shanghai Industrial Pharmaceutical Investment Co. Ltd.), a limited liability company established under the laws of the PRC with limited liability which is a subsidiary of the Company, listed on the A Shares Market of the Shanghai Stock Exchange (stock code: 600607);

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

• “Takeovers Code” the Hong Kong Code on Takeovers and Mergers and Share Repurchases; and

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

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LETTER FROM THE CHAIRMAN

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(Incorporated in Hong Kong with limited liability)

(Stock Code: 363)

Directors

Executive Directors: Mr. Cai Lai Xing (Chairman) Mr. Cai Yu Tian (Vice Chairman & Chief Executive Officer) Mr. Qu Ding (Vice Chairman & Executive Deputy CEO) Mr. Lu Ming Fang Mr. Ding Zhong De Mr. Qian Shi Zheng (Deputy CEO) Mr. Yao Fang Mr. Tang Jun

Registered Office:

26th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong

Independent Non-Executive Directors: Dr. Lo Ka Shui Prof. Woo Chia-Wei Mr. Leung Pak To, Francis

30th April 2007

To all Shareholders of the Company

Dear Sir or Madam,

PROPOSED GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES AND

RE-ELECTION OF RETIRING DIRECTORS

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding the proposals for the Repurchase Mandate, the Issue Mandate and the re-election of retiring Directors and to seek your approval at the 2007 Annual General Meeting in connection with, inter alia, such matters.

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LETTER FROM THE CHAIRMAN

2. PROPOSED GENERAL MANDATES TO REPURCHASE THE COMPANY’S OWN SHARES AND TO ISSUE SHARES

At the annual general meeting held on 30th May 2006, general mandates were given to the Directors: (i) to allot, issue and deal with Shares (and securities exercisable or convertible into Shares) not exceeding 20 percent of the issued share capital of the Company at the date of passing of the ordinary resolution and (ii) to exercise the powers of the Company to repurchase Shares up to a maximum of 10 percent of the issued share capital of the Company at the date of passing of the ordinary resolution. Such mandates will lapse at the conclusion of the 2007 Annual General Meeting.

An ordinary resolution set out in the Notice will be proposed at the 2007 Annual General Meeting to grant the Repurchase Mandate to the Directors.

The Repurchase Mandate would continue in force until the conclusion of the next annual general meeting of the Company or the expiration of the period within which the next annual general meeting of the Company is required by law or the Articles of Association of the Company to be held or until the Repurchase Mandate is revoked or varied by an ordinary resolution of the Shareholders in general meeting, whichever is the earlier.

Two additional ordinary resolutions will also be proposed at the 2007 Annual General Meeting to grant the Issue Mandate to the Directors and to extend the Issue Mandate by adding to it the number of Shares repurchased by the Company under the Repurchase Mandate respectively.

The explanatory statement required by the Listing Rules to be included in this circular is set out in Appendix I to this circular.

3. PROPOSED RE-ELECTION OF RETIRING DIRECTORS

In accordance with Articles 92 and 101 of the Articles of Association of the Company and the Code on Corporate Governance Practices as set out in Appendix 14 to the Listing Rules, Mr. Qu Ding, Mr. Lu Ming Fang, Mr. Yao Fang and Mr. Tang Jun shall retire at the 2007 Annual General Meeting and, being eligible, have offered themselves for re-election.

Their biographical details which are required to be disclosed by the Listing Rules are set out in Appendix II to this circular.

4. 2007 ANNUAL GENERAL MEETING

At the 2007 Annual General Meeting, ordinary resolutions will be proposed to approve the Repurchase Mandate, the Issue Mandate and the extension of the Issue Mandate.

The Notice is set out on pages 147 to 150 of the Annual Report. Shareholders are advised to read the Notice and to complete and return the accompanying form of proxy for use at the 2007 Annual General Meeting in accordance with the instructions printed thereon.

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LETTER FROM THE CHAIRMAN

5. DEMAND FOR POLL AT THE ANNUAL GENERAL MEETING

Pursuant to Article 73 of the Articles of Association of the Company, at any general meeting a resolution put to the vote at the meeting shall be decided on a show of hands unless a poll is taken as may from time to time be required under the Listing Rules or any other applicable laws, rules or regulations or unless a poll is (before or on the declaration of the result of the show of hands) demanded. A poll may be demanded:

• (a) by the Chairman; or

• (b) by at least three members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (c) by any member or members present in person or in the case of a member being a corporation by its duly authorized representative 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

• (d) by any member or members present in person or in the case of a member being a corporation by its duly authorized representative or by proxy and holding Shares 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.

6. RECOMMENDATION

The Directors consider that the grant of the Repurchase Mandate, the Issue Mandate, the extension of the Issue Mandate and the re-election of retiring Directors are in the interests of the Company and the Shareholders. Accordingly, the Directors recommend Shareholders to vote in favour of the relevant resolutions to be proposed at the 2007 Annual General Meeting.

On behalf of the Board CAI LAI XING Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This explanatory statement contains all the information required under the Listing Rules for you to consider the Repurchase Mandate.

The Listing Rules permit companies whose primary listings are on the Stock Exchange to repurchase their fully paid up shares on the Stock Exchange subject to certain restrictions, the most important of which are summarized below:

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 968,504,000 Shares. On the basis that no further Shares are issued or repurchased prior to the date of the 2007 Annual General Meeting, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 96,850,400 Shares, representing 10 percent of the issued Shares as at the Latest Practicable Date.

2. REASONS FOR REPURCHASE OF SHARES

The Directors have no present intention to repurchase any Shares and, whilst it is not possible to anticipate in advance those circumstances in which the Directors might think it appropriate to repurchase Shares, Shares would only be purchased in circumstances where the Directors consider that the purchase would be in the interests of the Company and the Shareholders. Such purchase may, depending on market conditions and funding arrangements at the time, lead to an enhancement of earnings per Share.

3. SOURCE OF FUNDS

It is proposed that repurchases of Shares under the Repurchase Mandate would be financed from internal funds and available banking facilities of the Company. In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with all applicable laws of Hong Kong and the Company’s memorandum and Articles of Association.

4. WORKING CAPITAL OR GEARING

If the Repurchase Mandate was exercised in full at any time during the proposed repurchase period, it would not have a material adverse effect on the working capital requirements of the Company or its gearing levels (as compared with the position disclosed in the Company’s accounts for the year ended 31st December 2006). The Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or its gearing levels (as compared with the position disclosed in the Company’s accounts for the year ended 31st December 2006) which in the opinion of the Directors are from time to time appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX I

5. DIRECTORS AND THEIR ASSOCIATES

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

6. CONNECTED PERSONS

No Connected Persons have notified the Company that they have a present intention to sell any Shares (in issue or to be issued) to the Company or have undertaken not to sell any of the Shares held by them (in issue or to be issued to them) to the Company, in the event that the Company is authorized to make repurchases of Shares.

7. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases of Shares pursuant to the proposed resolution in accordance with the Listing Rules, all applicable laws of Hong Kong, and the regulations set out in the memorandum and Articles of Association of the Company.

8. EFFECT OF TAKEOVERS CODE

If, as a result of a repurchase of Shares, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a shareholder or group of shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code and the provisions may otherwise apply as a result of any such increase.

As at the Latest Practicable Date, SIIC through its wholly-owned subsidiaries, namely Shanghai Investment Holdings Ltd., SIIC Capital (B.V.I.) Ltd. and SIIC CM Development Ltd. held 468,066,000, 80,000,000 and 10,000 Shares respectively, and is accordingly deemed to be interested in the respective Shares held by the aforementioned companies, representing approximately 56.59 percent of the total issued share capital of the Company.

Assuming no changes in the aforementioned shareholdings of the respective companies, in the event that the Directors exercise in full the power to repurchase the Shares, the shareholding of SIIC would be increased from approximately 56.59 percent to approximately 62.88 percent. Such increase would not give rise to an obligation to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. So the Directors do not aware of any consequences of any repurchase which would arise under the Takeovers Code. The Company will not purchase its Shares which will reduce the aggregate amount of the share capital of the Company in public hands to below 25 percent.

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EXPLANATORY STATEMENT

APPENDIX I

9. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous twelve months from the Latest Practicable Date are as follows:

	**Per **	Share
Month	Highest	Lowest
	HK$	HK$
2006
April	18.15	16.60
May	17.60	14.70
June	15.40	13.50
July	15.18	14.40
August	15.34	14.70
September	15.94	14.38
October	15.60	14.88
November	16.56	15.10
December	16.86	15.92
2007
January	18.16	16.78
February	19.60	16.48
March	18.50	17.00
April (up to the Latest Practicable Date)	20.50	18.18

10. SHARE REPURCHASES

No repurchases has been made by the Company of its Shares in the last six months prior to the Latest Practicable Date.

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BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

The followings are the biographical details of Mr. Qu Ding, Mr. Lu Ming Fang, Mr. Yao Fang and Mr. Tang Jun, all of whom shall retire at the 2007 Annual General Meeting in accordance with Articles 92 and 101 of the Articles of Association of the Company and being eligible, have offered themselves for re-election.

Mr. Qu Ding , aged 57, joined the Company in August 2004 and is the Executive Director, Vice Chairman and Executive Deputy CEO of the Company. He joined SIIC in January 1996, and is an executive director and executive vice president of SIIC. He is also the chairman of the supervisory committee of Shanghai Industrial Development Co. Ltd. Mr. Qu graduated from Northeast Normal University, majored in economic management. Mr. Qu is designated an economist. He was the Director of the Department of International Exchange & Cooperation of Shanghai Municipal Personnel Bureau, the Director of Shanghai Municipal Professional Examinations Centre and the Director of the Public Officials Training Centre of Shanghai Municipal Personnel Bureau. He has over 30 years’ experience in the fields of human resources and economic management.

As at the Latest Practicable Date, Mr. Qu has no relationship with any Directors, senior management or substantial or controlling Shareholders of the Company. He has a personal interest in 1,250,000 Shares and 560,000 share options altogether representing 0.19% of the total issued share capital of the Company. Save as aforesaid, he has no other interests in the Shares within the meaning of Part XV of the SFO. Mr. Qu has a service agreement with the Company commencing 1st January 2006, which shall be terminated by either party giving to the other by six months’ prior written notice. He is entitled to receive a basic salary of approximately HK$2,250,990 annually and fees of HK$50,000 for serving the Remuneration Committee of the Company. In addition, he may receive a discretionary bonus payment subject to the absolute discretion of the Company having regard to the operating results of the Group, industry benchmark and his performance. The Director’s emoluments are determined by reference to the factors such as the Company’s operating performance, prevailing market conditions and job responsibilities.

Mr. Lu Ming Fang , aged 50, joined the Company in January 2002. He is an Executive Director of the Company and SIIC, chairman of SI Pharmaceutical and S.I. Pharmaceuticals Group Ltd., and a non-executive director and deputy chairman of Lianhua Supermarket Holdings Co. Ltd. He graduated from Fudan University with a master’s degree in economics and The Chinese University of Hong Kong with a master’s degree in professional accounting, and is designated a senior economist. Mr. Lu has worked for Shanghai Medical Materials Company, Shanghai Municipal Drug Administration, Shanghai Wen Hui Bao and Shanghai Wanguo Holdings Ltd. (now Shenyin & Wanguo Securities Co. Ltd.). He joined SIIC in July 1995. He was the Chief Executive Officer of the Company, deputy general manager of the assets management department of SIIC, a director and executive deputy general manager of Shanghai S. I. Capital Co. Ltd., director and general manager of Shanghai Industrial United Holdings Co. Ltd. (now SI Pharmaceutical), assistant president and vice president of SIIC and general manager of its finance and planning department. He has over 20 years’ management experience, including over 10 years’ working experience in investment banking and listed companies.

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BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

As at the Latest Practicable Date, Mr. Lu has no relationship with any Directors, senior management or substantial or controlling Shareholders of the Company. He has a personal interest in 4,200,000 Shares and 480,000 share options altogether representing 0.48% of the total issued share capital of the Company and in 23,400 shares of SI Pharmaceutical representing 0.01% of the total issued share capital of SI Pharmaceutical. Save as aforesaid, he has no other interests in the Shares within the meaning of Part XV of the SFO. His appointment as an Executive Director of the Company shall continue for a term of three years until 31st December 2008 subject to the provisions of the Company’s Articles of Association or any other applicable laws. For the year ended 31st December 2006, Mr. Lu received from the Company a director’s fee of HK$200,000 per annum. Such fees are determined by reference to job responsibilities and industry benchmark as reviewed by the Remuneration Committee from time to time.

Mr. Yao Fang , aged 37, was appointed an Executive Director of the Company in May 2003. He is a director and general manager of SI Pharmaceutical, chairman of Shanghai Medical Instruments Co. Ltd., Guangdong Techpool Biochem Pharma Co. Ltd. and Shanghai Sunway Biotech Co. Ltd. He is also the vice chairman of Bright Dairy and Food Co. Ltd. and Shenzhen Kangtai Biological Products Co. Ltd. and a director of Xiamen Traditional Chinese Medicine Co. Ltd., Liaoning Herbapex Pharmaceutical (Group) Co. Ltd., Changzhou Pharmaceutical Co. Ltd. and MicroPort Medical (Shanghai) Co. Ltd., and a non-executive director of Semiconductor Manufacturing International Corporation. He graduated from The Chinese University of Hong Kong with a master’s degree in business administration. After working for Bank of Communications (Shanghai branch) and Shanghai Wanguo Holdings Ltd. (now Shenyin & Wanguo Securities Co., Ltd.), Mr. Yao joined SIIC in April 1996. He has over 10 years’ experience of money and capital markets operations.

As at the Latest Practicable Date, Mr. Yao has no relationship with any Directors, senior management or substantial or controlling Shareholders of the Company. He has a personal interest in 200,000 Shares representing 0.02% of the total issued share capital of the Company. Save as aforesaid, he has no other interests in the Shares within the meaning of Part XV of the SFO. His appointment as an Executive Director of the Company shall continue for a term of three years until 31st December 2008 subject to the provisions of the Company’s Articles of Association or any other applicable laws. For the year ended 31st December 2006, Mr. Yao received from the Company a director’s fee of HK$200,000 per annum. Such fees are determined by reference to job responsibilities and industry benchmark as reviewed by the Remuneration Committee from time to time.

Mr. Tang Jun , aged 40, was appointed an Executive Director of the Company in June 2004. He is the general manager of the internal audit department and deputy general manager of the finance and planning department of SIIC. He graduated from University of South Australia with a master’s degree in business administration. Mr. Tang holds the designation of senior auditor, and is an associate of the Chinese Institute of Certified Public Accountants. Mr. Tang was the Deputy Director of the Foreign Funds Utilization Auditing Department, Shanghai Municipal Auditing Bureau, and has over ten years’ practical experience in the fields of auditing and finance.

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BIOGRAPHICAL DETAILS OF THE RETIRING DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

As at the Latest Practicable Date, Mr. Tang has no relationship with any Directors, senior management or substantial or controlling Shareholders of the Company. He has a personal interest in 300,000 share options representing 0.03% of the total issued share capital of the Company. Save as aforesaid, he has no other interests in the Shares within the meaning of Part XV of the SFO. His appointment as an Executive Director of the Company shall continue for a term of three years until 31st December 2008 subject to the provisions of the Company’s Articles of Association or any other applicable laws. For the year ended 31st December 2006, Mr. Tang received from the Company a director’s fee of HK$200,000 per annum. Such fees are determined by reference to job responsibilities and industry benchmark as reviewed by the Remuneration Committee from time to time.

Save for the information disclosed above, there are no other matters that need to be brought to the attention of the Shareholders nor is there any information required to be disclosed pursuant to any of the requirements of Rule 13.51(2) of the Listing Rules in respect of the Directors proposed to be re-elected at the 2007 Annual General Meeting.

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