KPa-BM Holdings Limited — Proxy Solicitation & Information Statement 2005

Nov 30, 2005

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 China Resources Logic Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the 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 Bermuda with limited liability)

(Stock Code: 1193)

DISCLOSEABLE AND CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee and Independent Shareholders

CIMB-GK Securities (HK) Limited

A letter from the Board is set out on pages 3 to 7 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders in respect of the Disposal is set out on page 8 of this circular. A letter from CIMB-GK, the independent financial adviser, containing its advice to the Independent Board Committee and Independent Shareholders in respect of the Disposal is set out on pages 9 to 12 of this circular.

A notice convening a special general meeting of China Resources Logic Limited to be held at 4:00 p.m. on Friday, 23rd December, 2005 at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong is set out on pages 23 to 24 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event by not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so desire.

29th November, 2005

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	The Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
	(a) The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
	(b) Information on Palazzo Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
	(c) Reasons for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
	(d) Financial effect of the Disposal on the Group . . . . . . . . . . . . . . . . . . .	5
	(e) Connected and Discloseable Transaction . . . . . . . . . . . . . . . . . . . . . . .	6
3.	Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
5.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		8
Letter from CIMB-GK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Appendix	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Notice of Special General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		23

Accompanying document

1. Form of proxy

DEFINITIONS

For the purpose of this circular, the following expressions have the following meanings:–

“Agreement”	the sale and purchase agreement dated 8th November,
	2005 and entered into between the Company as vendor
	and Emax as purchaser pursuant to which the
	Company agreed to sell the entire issued share capital
	of Palazzo to Emax
“associates”	shall have the meaning ascribed to it under the Listing
	Rules
“Board”	The board of Directors
“CIMB-GK”	CIMB-GK Securities (HK) Limited, a licensed
	corporation for types 1 (Dealing in Securities),
	4 (Advising on Securities) and 6 (Advising on
	Corporate Finance) regulated activities under the SFO
	and the independent financial adviser to the
	Independent Board Committee and the Independent
	Shareholders in relation to the Disposal
“Company”	China Resources Logic Limited, an exempted company
	incorporated in Bermuda with limited liability, the
	shares of which are listed on the main board of the
	Stock Exchange
“Completion”	means the 3rd business day (excluding a Saturday)
	after the date of the SGM on which the Agreement has
	been approved by the Independent Shareholders of
	the Company or such other date as the Company and
	Emax may agree
“CRH”	China Resources (Holdings) Company Limited, a
	company incorporated in Hong Kong
“Directors”	the director(s) of the Company
“Disposal”	the sale of the entire issued share capital of Palazzo to
	Emax contemplated under the Agreement
“Emax”	Emax Capital Limited, a company incorporated in the
	British Virgin Islands and is a wholly owned subsidiary
	of CRH
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the
	PRC

– 1 –

DEFINITIONS

“Hong Kong GAAP”	Generally Accepted Accounting Principles in Hong
	Kong
“Independent Board Committee”	An independent committee of the Board, comprising
	independent non-executive directors, which has been
	appointed by the Board to advise Independent
	Shareholders on the Disposal contemplated under the
	Agreement
“Independent Shareholders”	Shareholder(s) other than CRH and its associates
“Latest Practicable Date”	25th November, 2005 being the latest practicable date
	before the printing of this circular for ascertaining
	certain information contained herein
“Listing Rules”	The Rules Governing the Listing of Securities on the
	Stock Exchange
“Palazzo”	Palazzo Inc., which is incorporated in the British Virgin
	Islands, is a wholly owned subsidiary of the Company,
	and is the holding company of all members of the
	Group which are engaged in the furniture business
“Palazzo Group”	Palazzo together with its subsidiaries and associated
	companies
“percentage ratios”	the percentage ratios referred to in Rule 14.07 of the
	Listing Rules
“PRC”	The People’s Republic of China
“SFO”	Securities and Futures Ordinance, Chapter 571 of the
	laws of Hong Kong
“SGM”	special general meeting of the Company to be
	convened to approve the Agreement
“Shareholders”	the shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

– 2 –

LETTER FROM THE BOARD

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(incorporated in Bermuda with limited liability) (Stock Code: 1193)

Board of Directors: SONG Lin (Chairman) ZHU Jinkun

(Deputy Chairman and Chief Executive Officer) ONG Thiam Kin WANG Guoping YU Yu YU Min CHEN Lang * WONG Tak Shing ** LUK Chi Cheong ** KO Ping Keung **

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head office and principal place of business: Rooms 4003-06 40th Floor, China Resources Building 26 Harbour Road Wanchai Hong Kong

• Non-executive Director

• ** Independent Non-executive Director

29th November, 2005

To Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

1. INTRODUCTION

The Company has, by an announcement dated 8th November, 2005, announced that the Company has entered into the Agreement with Emax for the sale of the entire issued share capital of Palazzo. Emax is a wholly owned subsidiary of CRH, which is a substantial and controlling shareholder of the Company. Emax is therefore a connected person of the Company. The Disposal contemplated under the Agreement constitutes a connected transaction of the Company and is conditional upon the approval by Independent Shareholders at the SGM.

The purposes of this circular are to provide you with further information relating to the Disposal contemplated under the Agreement, which includes (a) the recommendation and opinion of the Independent Board Committee and (b) the recommendation of CIMB-GK (in the form of a letter) setting out its recommendation to the Independent Board Committee and Independent Shareholders.

– 3 –

LETTER FROM THE BOARD

2. THE DISPOSAL

(a) The Agreement

• (i) Date

8th November, 2005

(ii) Parties

Vendor: the Company Purchaser: Emax

• (iii) Nature of transaction

The Company will sell to Emax the entire issued share capital of Palazzo, which is the holding company of all members of the Group which are engaged in the furniture business.

(iv) Consideration

The consideration is HK$183,000,000, which will be satisfied by Emax in full by cash at Completion.

The consideration represents approximately 12 times the average after tax net profit of Palazzo Group for the years ended 31st December, 2003 and 2004 as well as approximately 1.8 times its net tangible asset value as at 31st December, 2004. The consideration, negotiated on an arms-length basis, reflects the recent earning records of Palazzo Group, its distribution network in the PRC and its brand name in the PRC office furniture industry.

(v) Condition precedent

Completion of the Agreement is conditional upon the passing of a resolution by Independent Shareholders at a SGM of the Company approving the Agreement. There is no long-stop date for the Agreement.

The Directors, including independent non-executive directors (who have taken into account the advice of CIMB-GK), consider that the terms of the Agreement, including the consideration, was negotiated on an arm’s length basis and are on normal commercial terms and is fair and reasonable to and in the interests of the Company and Shareholders as a whole.

– 4 –

LETTER FROM THE BOARD

(b) Information on Palazzo Group

Palazzo, a wholly owned subsidiary directly held by the Company, is the holding company of all members of the Group which are engaged in the furniture business since the Group was listed on the Stock Exchange in 1994, at which time the Group was engaged in the furniture business. The Palazzo Group’s furniture business includes the manufacture and supply of office furniture in the PRC. It’s clientele includes multinational corporations and leading PRC enterprises. It has over 20 regional distribution channels across the PRC including 9 branches in major cities.

The unaudited net asset value of the Palazzo Group as at 31st December, 2004, which was prepared in accordance with Hong Kong GAAP, was HK$101,388,467. The unaudited net profits of the Palazzo Group before and after taxation for the year ended 31st December, 2003 were HK$12,700,890 and HK$10,177,270 respectively. The unaudited net profits of the Palazzo Group before and after taxation for the year ended 31st December, 2004 were HK$23,561,691 and HK$20,326,527 respectively.

After Completion, the Palazzo Group will cease to be subsidiaries of the Group.

(c) Reasons for the Disposal

The Group currently carries on 3 businesses namely semiconductor business, air-conditioner compressor business and office furniture business. The office furniture business is carried out by the Palazzo Group. As at 30th June, 2005, the turnover and operating profit contributions to the Group from the office furniture business were 5% and 2% respectively. These contributions were insignificant to the Group and by disposing of the office furniture business, the Group can focus its resources on its other two major growing core businesses. Moreover the disposal of the office furniture business will enhance the status of the Group as a technology based manufacturing enterprise.

(d) Financial effect of the Disposal on the Group

As at 30th June, 2005, the Palazzo Group’s unaudited after tax net profit, total assets and total liabilities represented only 2%, 3% and 2% of those of the Group. Hence the Disposal of the Palazzo Group will have insignificant impact on the financial results and position of the Group. The Group expects to record a gain on the Disposal of some HK$74,000,000 which the Group will recognise in its financial statements for the year ending 31st December, 2005. The gain comprises mainly the difference between the Disposal consideration and the expected net asset value of the Palazzo Group upon the completion of the Disposal.

The sales proceeds of the Disposal of HK$183,000,000 will be used to fund the working capital requirement of the Group’s growing semiconductor and airconditioner compressor businesses.

– 5 –

LETTER FROM THE BOARD

(e) Connected and Discloseable Transaction

Emax is a wholly owned subsidiary of CRH, which is a substantial and controlling shareholder of the Company. Emax is therefore a connected person of the Company. As such, the Disposal constitutes a connected transaction of the Company.

As the consideration of the Disposal exceeds 2.5% of each of the relevant percentage ratios as referred to in Chapter 14A of the Listing Rules, the Disposal is subject to Independent Shareholders’ approval pursuant to Rule 14A.17 of the Listing Rules by way of poll at the SGM. CRH is the controlling Shareholder interested in approximately 73.07% in the issued share capital of the Company as at the Latest Practicable Date. As such, CRH and its associates shall abstain from voting at the SGM. Since the consideration also exceeds 5% but is less than 25% of each of the relevant percentage ratios set forth in Chapter 14 of the Listing Rules, the Disposal also constitutes a discloseable transaction under the Listing Rules.

3. SPECIAL GENERAL MEETING

Set out on pages 23 to 24 of this circular is a notice convening the SGM to be held at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong at 4:00 p.m. on Friday, 23rd December, 2005. The SGM will be held for the purpose of considering and, if thought fit, approving the Agreement.

A form of proxy for use at the SGM is enclosed herewith. Whether or not you are able to attend the SGM, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the principal place of business of the Company at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong as soon as possible but in any event not later than 48 hours before the time appointed for the holding of the SGM. Completion of the form of proxy will not preclude you from attending and voting at the SGM or any adjourned meeting should you so desire.

According to Rule 13.39(4) of the Listing Rules, any vote taken at the SGM shall be taken by way of poll. The Company shall announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

4. RECOMMENDATIONS

Your attention is drawn to (i) the letter from the Independent Board Committee set out in this circular which contains its recommendation to the Independent Shareholders concerning the Disposal; and (ii) the letter from CIMB-GK set out in this circular which contains its recommendations to the Independent Board Committee and Independent Shareholders in relation to the Disposal and the principal factors and reasons considered by CIMB-GK in arriving at its recommendations.

– 6 –

LETTER FROM THE BOARD

The Independent Board Committee, having taken into account the advice of CIMB-GK, considers that the Disposal contemplated under the Agreement is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. Accordingly, the Board, including members of the Independent Board Committee, unanimously recommend that the Independent Shareholders vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement. CRH and its associates shall abstain from voting on the ordinary resolution.

5. ADDITIONAL INFORMATION

The Group is engaged in the semiconductor, air-conditioner compressor and office furniture businesses. After Completion, the Group will engage in the semiconductor and air-conditioner compressor businesses. Emax is an investment holding company and is not engaged in any other businesses.

Your attention is also drawn to the additional information set out in the Appendix.

Yours faithfully, On behalf of the Board CHINA RESOURCES LOGIC LIMITED SONG Lin Chairman

– 7 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(incorporated in Bermuda with limited liability) (Stock Code: 1193)

29th November, 2005

To the Independent Shareholders of the Company

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders in respect of the Disposal pursuant to the Agreement, details of which are set out in the letter from the Board in this circular dated 29th November, 2005 (the “Circular”) to the Shareholders, of which this letter forms part. Unless the context otherwise requires, terms defined in this Circular shall have the same meanings when used in this letter.

Your attention is drawn to the advice of CIMB-GK, the independent financial adviser appointed, in respect of the Disposal as set out in the letter from CIMB-GK in the Circular.

Having taken into account the advice of CIMB-GK, we consider that the Disposal is on normal commercial terms and is in the interests of the Company and the terms of the Agreement are fair and reasonable so far as the Company and the Independent Shareholders are concerned. We therefore recommend that you vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement.

Yours faithfully,

Independent Board Committee

WONG Tak Shing

Independent Non-executive Director

LUK Chi Cheong

Independent Non-executive Director

KO Ping Keung Independent Non-executive Director

– 8 –

LETTER FROM CIMB-GK

CIMB-GK Securities (HK) Limited

25/F Central Tower 28 Queen’s Road Central Hong Kong

29th November, 2005

To the Independent Board Committee and the Independent Shareholders of China Resources Logic Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Agreement, details of which are contained in a circular (the “Circular”) to the Shareholders dated 29th November, 2005, of which this letter forms part. Expressions used in this letter have the same meanings as defined in the Circular unless the context otherwise requires.

An independent board committee comprising Messrs. Wong Tak Shing, Luk Chi Cheong and Ko Ping Keung, being the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to the Agreement. Any vote of the Independent Shareholders at the SGM shall be taken by poll. CRH and its associates will abstain from voting in relation to the resolution approving the Agreement.

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular. The Directors have declared in a responsibility statement set out in the Appendix to the Circular that they jointly and severally accept full responsibility for the accuracy of the information contained in the Circular. We have also assumed that the information and representations contained or referred to in the Circular were true and accurate at the time they were made and continue to be so at the date of the dispatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Company or CRH or any of their respective subsidiaries or associates.

– 9 –

LETTER FROM CIMB-GK

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion for the Agreement, we have considered the following principal factors and reasons:

Background and reasons

The Group is principally engaged in the semiconductor, air-conditioner compressor and office furniture businesses (the “Furniture Business”), which will be discontinued upon Completion.

As noted from the Company’s annual report 2004 and interim report 2005, the operating profit of the Furniture Business contributed to the Group only accounted for approximately 4.7%, 5.4% and 1.9% of the Group’s total operating profit for the two years ended 31st December, 2004 and the six months ended 30th June, 2005 respectively. It is stated in such financial reports that the Group will continue to expand its core businesses being the semiconductor and air-conditioner compressor businesses. The Company considers the contributions of the Furniture Business were relatively insignificant to the Group, and the Disposal will enable the Group to focus its resources on its semiconductor and air-conditioner compressor businesses.

We note that the Group would have available to it additional funds of HK$183 million from the Disposal, which will be used to provide further resources for the Group’s semiconductor and air-conditioner compressor businesses. As stated in the section headed “Letter from the Board” of the Circular, the one-off gain on the Disposal is expected to be approximately HK$74 million.

In view of the foregoing, we concur with the view of the Directors that the Disposal will enable the Company to apply additional resources for the Group’s existing core businesses, which is in line with the stated business objective of the Company, and is in the interest of the Company and the Shareholders as a whole.

The Consideration

The consideration for the Disposal of HK$183 million (the “Consideration”) has been arrived at after arm’s length negotiations among the parties concerned with reference to the Palazzo Group’s recent financial performance, distribution network in the PRC and brand name in the PRC office furniture industry. The Consideration represents approximately 12 times the average of the net profit of the Palazzo Group for the two years ended 31st December, 2004 and approximately 1.8 times the net tangible asset value of the Palazzo Group as at 31st December, 2004.

– 10 –

LETTER FROM CIMB-GK

In assessing the fairness and reasonableness of the Consideration, we have identified and reviewed the financial performance of all of the comparable listed companies (the “Listed Comparables”) in Hong Kong whose principal business is engaged in the similar business as those of the Furniture Business as at the Latest Practicable Date. Details of the price-earnings ratio (“PER”) and the price to net tangible asset value (“PNTA”) of the Listed Comparables are as follows:

Name of the Listed Comparables	Historic PER	Historic PNTA
	(Note 5)	(Note 6)
	(Times)	(Times)
Chitaly Holdings Limited_(Note 1)_	8.2	3.8
Kasen International Holdings Limited_(Note 2)_	5.1	1.3
		(Note 7)
Omnicorp Limited_(Note 3)_	6.8	0.4
Samson Holding Ltd.(Note 4)	13.9	2.9
	(Note 8)	(Note 8)
Average	8.5	2.1
The Disposal	12.0	1.8

Notes:

1. It is principally engaged in design, manufacture and sale of home furniture.

2. It is principally engaged in manufacture of upholstered furniture and leather products in the PRC.

3. It is principally engaged in manufacture and sale of home furniture, electronic components and products, contact and contactless smart card readers and related products, trading of building materials and sundry products, property holding and investment holding.

4. It is principally engaged in manufacture, market and wholesale of residential furniture in United States of America.

It was listed on the main board of the Stock Exchange on 17th November, 2005.

1. Based on the closing price of shares of each of the Listed Comparables as at the date of the Agreement, being 8th November, 2005, and their latest published audited financial statements.

2. Based on the closing price of shares of each of the Listed Comparables as at the date of the Agreement, being 8th November, 2005, and their latest published unaudited financial statements.

3. Based on the unaudited pro forma adjusted net tangible assets per share of HK$1.90 disclosed in the relevant prospectus dated 10th October, 2005.

4. Based on the final offer price per offer share, the latest published audited financial statements and the statement of the unaudited pro forma adjusted net tangible assets disclosed in the relevant prospectus dated 7th November, 2005.

– 11 –

LETTER FROM CIMB-GK

As noted from the table above, the 12 times PER as implied under the Consideration falls within the range of the historical PER of the Listed Comparables and is higher than the average of the historical PER of the Listed Comparables of approximately 8.5 times. As a supplemental reference, we also note that the 1.8 times PNTA as implied under the Consideration falls within the range of the historical PNTA of the Listed Comparables and is comparable to the average of the historical PNTA of the Listed Comparables of approximately 2.1 times.

Having taken into account the above, we consider that the Consideration is fair and reasonable so far as the Company and the Independent Shareholders are concerned.

POSSIBLE FINANCIAL EFFECT

Net asset value

Given that the Consideration exceeds the net asset value of the Palazzo Group, the Disposal would have a positive impact on the net asset value (i.e. the shareholders fund) of the Group.

Earnings

The contribution of the Palazzo Group will cease upon Completion.

Working Capital

As the sale proceeds of the Disposal of HK$183 million will be payable in cash, the working capital position of the Group will be enhanced upon Completion.

RECOMMENDATION

Having considered the principal factors and reasons referred to the above, we consider that the Agreement is in the interests of the Company and the Shareholders as a whole and the terms thereof are fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the Agreement.

Yours faithfully, For and on behalf of

CIMB-GK Securities (HK) Limited Alex Lau Flavia Hung Executive Vice President Senior Vice President

– 12 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

Save as disclosed below, as at the Latest Practicable Date, none of the Directors, chief executive of the Company and their associates had any interests or short positions in any shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange:

(a) Interests in issued ordinary shares and underlying shares of the Company

					Aggregate
		Long or short	Number of	Number of	percentage of
Name of Director	Capacity	position	shares	share options 1	interest (%) 2
Mr. Song Lin	Beneficial Owner	Long position	3,600,000	8,900,000	0.47
Mr. Zhu Jinkun	Beneficial Owner	Long position	2,370,000	6,100,000	0.32
	Interest of Spouse	Long position	160,000	–
Mr. Ong Thiam Kin	Beneficial Owner	Long position	1,100,000	4,500,000	0.21
Mr. Wang Guoping	Beneficial Owner	Long position	1,108,000	3,000,000	0.15
Mr. Yu Yu	Beneficial Owner	Long position	100,000	4,000,000	0.16
	Interest of Spouse	Long position	60,000	–
Mr. Yu Min	Beneficial Owner	Long position	1,180,000	1,060,000	0.08
Mr. Chen Lang	Beneficial Owner	Long position	1,500,000	6,000,000	0.30
	Interest of Spouse	Long position	500,000	–
Mr. Luk Chi Cheong	Beneficial Owner	Long position	–	900,000	0.03
Mr. Wong Tak Shing	Beneficial Owner	Long position	–	500,000	0.02
Mr. Ko Ping Keung	Beneficial Owner	Long position	–	900,000	0.03

– 13 –

APPENDIX

GENERAL INFORMATION

Notes:

1. This refers to the number of underlying shares of the Company covered by the share options granted under the share option schemes of the Company, such options being unlisted physically settled equity derivatives, particulars of which as required to be disclosed under Rule 17.07(1) of the Listing Rules are set out in Note 3 below.

2. This represents the percentage of aggregate long position in shares and underlying shares to the total issued share capital of the Company as at the Latest Practicable Date.

3. Particulars of share options referred to in Note 1 above:

		Exercise		Number of share options	Number of share options
		Price		Exercised	Outstanding as
		per share	Outstanding as at	during the	at the Latest
Name of Director	Date of grant	(HK$)	1st January, 2005	period	Practicable Date
Mr. Song Lin	21/09/2000 1	0.590	6,900,000	–	6,900,000
	13/01/2004 12	0.906	2,000,000	–	2,000,000
Mr. Zhu Jinkun	25/04/2001 3	0.547	1,000,000	–	1,000,000
	02/10/2002 9	0.570	800,000	–	800,000
	09/04/2003 11	0.479	2,800,000	–	2,800,000
	13/01/2004 12	0.906	1,500,000	–	1,500,000
Mr. Ong Thiam Kin	25/04/2001 3	0.547	2,000,000	–	2,000,000
	02/10/2002 9	0.570	1,000,000	–	1,000,000
	09/04/2003 11	0.479	500,000	–	500,000
	13/01/2004 13	0.906	1,000,000	–	1,000,000
Mr. Wang Guoping	09/04/2003 11	0.479	3,000,000	1,000,000	2,000,000
	13/01/2004 13	0.906	1,000,000	–	1,000,000
Mr. Yu Yu	04/12/2001 5	0.790	1,500,000	–	1,500,000
	02/10/2002 9	0.570	1,000,000	–	1,000,000
	09/04/2003 11	0.479	500,000	–	500,000
	13/01/2004 13	0.906	1,000,000	–	1,000,000
Mr. Yu Min	21/09/2000 2	0.590	1,000,000	1,000,000	–
	22/05/2002 7	0.920	500,000	–	500,000
	09/04/2003 11	0.479	200,000	140,000	60,000
	13/01/2004 13	0.906	500,000	–	500,000
Mr. Chen Lang	04/12/2001 4	0.790	6,000,000	–	6,000,000
Mr. Luk Chi Cheong	22/05/2002 6	0.920	300,000	–	300,000
	02/10/2002 8	0.570	200,000	–	200,000
	09/04/2003 10	0.479	200,000	–	200,000
	13/01/2004 12	0.906	200,000	–	200,000
Mr. Wong Tak Shing	22/05/2002 6	0.920	300,000	–	300,000
	13/01/2004 12	0.906	200,000	–	200,000
Mr. Ko Ping Keung	22/05/2002 6	0.920	500,000	–	500,000
	09/04/2003 10	0.479	200,000	–	200,000
	13/01/2004 12	0.906	200,000	–	200,000

– 14 –

APPENDIX

GENERAL INFORMATION

Notes:

1. The period during which the options may be exercised is from 21st September, 2000 to 20th September, 2010.

2. The exercisable period is divided into 3 tranches exercisable during the periods from 21st September, 2001, 2002 and 2003 to 20th September, 2010.

3. The exercisable period is divided into 3 tranches exercisable during the periods from 25th April, 2002, 2003 and 2004 to 24th April, 2011.

4. The exercisable period during which the options may be exercised is from 4th December, 2001 to 3rd December, 2011.

5. The exercisable period is divided into 3 tranches exercisable during the periods from 3rd December, 2002, 2003 and 2004 to 3rd December, 2011.

6. The exercisable period during which the options may be exercised is from 22nd May, 2002 to 21st May, 2012.

7. The exercisable period is divided into 3 tranches exercisable during the periods from 22nd May, 2003, 2004 and 2005 to 21st May, 2012.

8. The exercisable period during which the options may be exercised is from 2nd October, 2002 to 1st October, 2012.

9. The exercisable period is divided into 3 tranches exercisable during the periods from 2nd October, 2003, 2004 and 2005 to 1st October, 2012.

10. The exercisable period during which the options may be exercised is from 9th April, 2003 to 8th April, 2013.

11. The exercisable period is divided into 3 tranches exercisable during the periods from 9th April, 2004, 2005 and 2006 to 8th April, 2013.

12. The exercisable period during which the options may be exercised is from 13th January, 2004 to 12th January, 2014.

13. The exercisable period is divided into 3 tranches exercisable during the periods from 13th January, 2005, 2006 and 2007 to 12th January, 2014.

14. (b) Interests in issued ordinary shares and underlying shares of China Resources Enterprise, Limited (“CRE”), an associated corporation of the Company

					Aggregate
		Long or short	Number of	Number of	percentage of
Name of Director	Capacity	position	shares	share options 1	interest (%) 2
Mr. Song Lin	Beneficial Owner	Long position	–	4,500,000	0.22
	Interest of Spouse	Long position	200,000	200,000
Mr. Zhu Jinkun	Interest of Spouse	Long position	–	450,000	0.02
Mr. Chen Lang	Beneficial Owner	Long position	–	2,300,000	0.10

– 15 –

APPENDIX

GENERAL INFORMATION

Notes:

1. This refers to the number of underlying shares of CRE covered by the share options granted under the share option schemes of CRE, such options being unlisted physically settled equity derivatives, particulars of which as required to be disclosed under Rule 17.07(1) of the Listing Rules are set out in Note 3 below.

2. This represents the percentage of aggregate long position in shares and underlying shares to the total issued share capital of CRE as at the Latest Practicable Date.

3. Particulars of share options referred to in Note 1 above:

		Exercise		Number	of share options	of share options
		Price			Exercised	Outstanding as
		per share	Outstanding as at		during the	at the Latest
Name of Director	Date of grant	(HK$)	1st January, 2005		period	Practicable Date
Mr. Song Lin	07/02/2002 1	7.17	2,000,000		–	2,000,000
	14/01/2004 1	9.72	2,500,000		–	2,500,000
	20/06/2000 1	7.19	200,000	5	–	200,000 5
Mr. Zhu Jinkun	19/04/2002 2	7.40	150,000	5	150,000	–
	14/01/2004 3	9.72	150,000	5	–	150,000 5
	04/10/2004 1	10.35	300,000	5	–	300,000 5
Mr. Chen Lang	14/04/2003 4	6.29	1,500,000		–	1,500,000
	25/05/2004 1	9.15	800,000		–	800,000

Notes:

1. The share options are exercisable within a period of 10 years from the date of grant of the relevant options.

2. The share options are exercisable in 3 tranches, from 19th April, 2002 and from 1st January, 2003 and 2004 to 18th April, 2012.

3. The share options are exercisable in 4 tranches, from 14th January, 2004 and from 1st January, 2005, 2006 and 2007 to 13th January, 2014.

4. The share options are exercisable in 4 tranches, from 14th April, 2003 and from 1st January, 2004, 2005 and 2006 to 13th April, 2013.

5. The directors concerned were deemed to be interested in the underlying shares through the interests of their respective spouses.

6. (c) Interests in issued ordinary shares and underlying shares of China Resources Power Holdings Company Limited (“CRP”), an associated corporation of the Company

					Aggregate
		Long or short	Number of	Number of	percentage of
Name of Director	Capacity	position	shares	share options 1	interest (%) 2
Mr. Song Lin	Beneficial Owner	Long position	–	2,900,000	0.08
Mr. Zhu Jinkun	Beneficial Owner	Long position	–	500,000	0.01
Mr. Ong Thiam Kin	Beneficial Owner	Long position	–	250,000	0.01
Mr. Wang Guoping	Beneficial Owner	Long position	–	450,000	0.01
Mr. Yu Yu	Beneficial Owner	Long position	–	250,000	0.01
Mr. Chen Lang	Beneficial Owner	Long position	–	500,000	0.03
	Interest of Spouse	Long position	200,000	400,000

– 16 –

APPENDIX

GENERAL INFORMATION

Notes:

1. This refers to the number of underlying shares of CRP covered by the share options granted under the share option scheme of CRP, such options being unlisted physically settled equity derivatives, particulars of which as required to be disclosed under Rule 17.07(1) of the Listing Rules are set out in Note 3 below.

2. This represents the percentage of aggregate long position in shares and underlying shares to the total issued share capital of CRP as at the Latest Practicable Date.

3. Particulars of share options referred to in Note 1 above:

		Exercise		Number	of share options	of share options
		Price			Granted	Outstanding as
		per share	Outstanding as at		during the	at the Latest
Name of Director	Date of grant	(HK$)	1st January, 2005		period	Practicable Date
Mr. Song Lin	12/11/2003 1	2.80	2,000,000		–	2,000,000
	18/03/2005 2	3.99	–		900,000	900,000
Mr. Zhu Jinkun	12/11/2003 1	2.80	500,000		–	500,000
Mr. Ong Thiam Kin	12/11/2003 1	2.80	250,000		–	250,000
Mr. Wang Guoping	12/11/2003 1	2.80	450,000		–	450,000
Mr. Yu Yu	12/11/2003 1	2.80	250,000		–	250,000
Mr. Chen Lang	12/11/2003 1	2.80	500,000		–	500,000
	12/11/2003 1	2.80	400,000	3	–	400,000 3

Notes:

1. The options are exercisable in 5 tranches, from 6th October, 2004, 2005, 2006, 2007 and 2008 to 5th October, 2013.

2. The options are exercisable in 5 tranches, from 18th March, 2006, 2007, 2008, 2009 and 2010 to 17th March, 2015.

3. Mr. Chen Lang was deemed to be interested in 400,000 underlying shares through the interests of his spouse.

(d) Interests in issued ordinary shares and underlying shares of China Resources Land Limited (“CRL”), an associated corporation of the Company

					Aggregate
		Long or short	Number of	Number of	percentage of
Name of Director	Capacity	position	shares	share options 1	interest (%) 2
Mr. Song Lin	Beneficial Owner	Long position	–	900,000	0.06

Notes:

1. This refers to the number of underlying shares of CRL covered by the share options granted under the share option scheme of CRL, such options being unlisted physically settled equity derivatives, particulars of which as required to be disclosed under Rule 17.07(1) of the Listing Rules are set out in Note 3 below.

2. This represents the percentage of aggregate long position in shares and underlying shares to the total issued share capital of CRL as at the Latest Practicable Date.

– 17 –

APPENDIX

GENERAL INFORMATION

1. Particulars of share options referred to in Note 1 above:

		Exercise		Number of share options	Number of share options
		Price		Granted	Outstanding as
		per share	Outstanding as at	during the	at the Latest
Name of Director	Date of grant	(HK$)	1st January, 2005	period	Practicable Date
Mr. Song Lin	01/06/2005 1	1.23	–	900,000	900,000

Notes:

1. The options are exercisable within a period of 10 years from the date of grant of the relevant options.

3. SUBSTANTIAL SHAREHOLDERS

Save as disclosed below, the Directors and chief executive of the Company are not aware that there was any party (other than a Director or chief executive of the Company), who, as at the Latest Practicable Date had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote at general meeting of any other member of the Group:

(a) Long position in the Company

			Percentage of
			aggregate
			long position
			in shares to
			the issued
		Number of	share capital
Name of Shareholder	Capacity	ordinary shares	of the Company
Gold Touch Enterprises Inc.	Beneficial Owner	297,229,604	11.15
(“Gold Touch”)
Waterside Holdings Limited	Beneficial Owner	535,347,743	20.09
(“Waterside”)
Splendid Time Investments	Beneficial Owner	1,109,688,810	41.64
Inc. (“Splendid Time”)
China Resources (Holdings)	Beneficial Owner	4,836,000	0.18
Company Limited (“CRH”)
China Resources (Holdings)	Interest of Controlled	1,942,266,157	72.89
Company Limited (“CRH”)	Corporation
CRC Bluesky Limited	Interest of Controlled	1,947,102,157	73.07
(“CRC Bluesky”)	Corporation
China Resources Co., Limited	Interest of Controlled	1,947,102,157	73.07
(“CRCL”)	Corporation
China Resources National	Interest of Controlled	1,947,102,157	73.07
Corp. (“CRN”)	Corporation

– 18 –

APPENDIX

GENERAL INFORMATION

Gold Touch, Waterside and Splendid Time each directly holds 297,229,604 shares, 535,347,743 shares and 1,109,688,810 shares respectively in the Company as at the Latest Practicable Date. Gold Touch, Waterside and Splendid Time are wholly owned subsidiaries of CRH, which is therefore deemed to own 1,942,266,157 shares of the Company as at the Latest Practicable Date. In addition, CRH directly owns 4,836,000 shares in the Company. CRH is a wholly owned subsidiary of CRC Bluesky. CRC Bluesky is a wholly owned subsidiary of CRCL, which in turn is 99.98% owned by CRN. CRN is deemed to have interest in 1,947,102,157 shares.

The following Directors namely, Mr. Song Lin and Mr. Zhu Jinkun are directors of Waterside. The following Directors namely, Mr. Song Lin, Mr. Zhu Jinkun and Mr. Chen Lang are directors of each of CRH, CRCL and CRN.

(b) Of other members of the Group

So far as is known to any Director or chief executive of the Company, as at the Latest Practicable Date, the following persons were, directly or indirectly, interested in 10% or more of the share capital carrying rights to vote at general meetings of the following members of the Group:

	Name of	Percentage of
Members of the Group	substantial Shareholder	shareholding (%)
China Resources (Shenyang)	Sanyo Electric Co., Ltd.	34.25
Sanyo Compressor Co., Ltd.
Shenyang Shengrun Sanyo	Sanyo Electric Co., Ltd.	34.25
Compressor Co., Ltd.

4. PROCEDURE TO DEMAND A POLL

Pursuant to bye-law 78 of the Bye-Laws of the Company, at any general meeting, a resolution put to the vote of 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 or on the withdrawal of any other demand for a poll) demanded:–

• (i) by the Chairman of the meeting; or

• (ii) 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

• (iii) 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

– 19 –

APPENDIX

GENERAL INFORMATION

• (iv) by a 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 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.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has entered or proposed to enter into a service contract with any member of the Group which is not determinable by the employer within one year without payment of compensation (other than statutory compensation).

6. DIRECTORS INTERESTS IN CONTRACTS

As at the Latest Practicable Date, none of the Directors has any interest, direct or indirect, in any asset which since 31st December, 2004, the date to which the latest published audited financial statements of the Group were made up, have been acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement which is significant in relation to the businesses of the Group.

7. NO MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2004, the date to which the latest published audited financial statements of the Group were made up.

8. EXPERT

The following is the qualification of the expert who has given an opinion or advice contained in this circular:

Name Qualification CIMB-GK a licensed corporation for types 1 (Dealing in Securities), 4 (Advising on Securities) and 6 (Advising on Corporate Finance) regulated activities under the SFO

– 20 –

APPENDIX

GENERAL INFORMATION

As at the Latest Practicable Date, CIMB-GK does not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for shares in any member of the Group. As at the Latest Practicable Date, CIMB-GK does not have any interest, direct or indirect, in any asset which since 31st December, 2004, the date to which the latest published audited financial statements of the Group were made up, have been acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

CIMB-GK has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter as set out in this circular and references to its name in the form and context in which they appear in this circular.

9. COMPETING BUSINESS

None of the Directors and his respective associates has an interest in a business apart from the Company’s business which competes or is likely to compete, either directly or indirectly, with the Company’s businesses.

10. LITIGATION

Neither the Company nor any member of the Group is engaged in any litigation or arbitration or claim of material importance and, so far as the Directors are aware, no litigation, arbitration or claim of material importance is pending or threatened against any member of the Group.

11. GENERAL

• (a) The secretary of the Company is Mr. LEE Yip Wah, Peter who is a solicitor of the High Court of Hong Kong.

• (b) The qualified accountant of the Company appointed pursuant to rule 3.24 of the Listing Rules is Mr. ONG Thiam Kin, who is a fellow member of the Association of Chartered Certified Accountants in the United Kingdom, the Hong Kong Institute of Certified Public Accountants and members of the national accounting bodies of Singapore and Malaysia.

• (c) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda and the principal place of business of the Company is situated at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong.

• (d) The Company’s Hong Kong branch share registrar is Secretaries Limited, which is situated at G/F., BEA Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

– 21 –

APPENDIX

GENERAL INFORMATION

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong, the principal place of business of the Company, from the date of this circular up to and including 13th December, 2005:

• (a) the Agreement;

• (b) the letter from the Independent Board Committee, the text of which is set out on page 8 of this circular;

• (c) the letter from CIMB-GK, the text of which is set out on pages 9 to 12 of this circular; and

• (d) the written consent of CIMB-GK referred to in the Appendix to this circular.

– 22 –

NOTICE OF SPECIAL GENERAL MEETING

==> picture [328 x 76] intentionally omitted <==

(incorporated in Bermuda with limited liability) (Stock Code: 1193)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting of China Resources Logic Limited (the “Company”) will be held at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong at 4:00 p.m. on Friday, the 23rd December, 2005 for the purpose of considering and, if thought fit, passing, with or without amendments, the following resolution as an ordinary resolution of the Company:–

ORDINARY RESOLUTION

“ THAT the sale and purchase agreement dated 8th November, 2005 and entered into between the Company and Emax Capital Limited (the “Agreement”), a copy of which marked “A” has been produced to the meeting and signed by the Chairman of the meeting for the purpose of identification, pursuant to which the Company agree to sell the entire issued share capital of Palazzo Inc. to Emax Capital Limited for a consideration of HK$183,000,000 and all the transactions contemplated thereunder be and is hereby approved, and the directors of the Company (or any one of them) be and are hereby authorized for and on behalf of the Company to sign, seal, execute, perfect, deliver and do all such documents, deeds, acts, matters and things as they may in their discretion consider necessary or desirable or expedient for the purpose of, or in connection with, the Agreement and to make and agree to such variations of a non-material nature in or to the terms of the Agreement as they may in their discretion consider to be desirable and in the interests of the Company.”

By Order of the Board China Resources Logic Limited LEE Yip Wah, Peter Company Secretary

Hong Kong, 29th November, 2005

– 23 –

NOTICE OF SPECIAL GENERAL MEETING

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Principal place of business: Rooms 4003-06 40th Floor, China Resources Building 26 Harbour Road Wanchai Hong Kong

Notes:

1. Any member entitled to attend and vote at the meeting may appoint one or more proxies to attend and, on a poll, to vote instead of him. 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 thereof, must be deposited at the Company’s principal place of business at Rooms 4003-06, 40th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong not later than 48 hours before the time appointed for holding the meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person if you are subsequently able to be present.

3. According to Rule 13.39(4) of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “Listing Rules”), any vote taken at the special general meeting shall be taken by poll. The Company shall announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

4. Shareholders are advised to read the circular of the Company dated 29th November, 2005 which contains, among others, information concerning the Agreement and the resolution to be proposed at the above meeting (or any adjournment thereof).

5. As at the date of this notice, the Executive Directors of the Company are Mr. Song Lin (Chairman), Mr. Zhu Jinkun (Deputy Chairman and Chief Executive Officer), Mr. Ong Thiam Kin, Mr. Wang Guoping, Mr. Yu Yu and Mr. Yu Min; the Non-executive Director is Mr. Chen Lang; and the Independent Non-executive Directors are Mr. Wong Tak Shing, Mr. Luk Chi Cheong and Mr. Ko Ping Keung.

– 24 –