KPa-BM Holdings Limited — Proxy Solicitation & Information Statement 2006

Apr 26, 2006

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 you should take, you should consult your stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional advisor.

If you have sold all your shares in China Resources Logic Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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)

GENERAL MANDATE TO REPURCHASE SHARES GENERAL MANDATE TO ISSUE SHARES AMENDMENTS TO EXISTING BYE-LAWS RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

The notice convening an annual general meeting of China Resources Logic Limited to be held at Rooms 4003-06, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on Monday, 22nd May, 2006 at 4:00 p.m. is set out on pages 13 to 17 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the accompanying 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 annual general meeting.

26th April, 2006

DEFINITIONS

For the purpose of this circular, the following expressions have the following meanings unless the context requires otherwise:

“Annual General Meeting”	the annual general meeting of the Company to be held at
	Rooms 4003-06, China Resources Building, 26 Harbour
	Road, Wanchai, Hong Kong on Monday, 22nd May, 2006
	at 4:00 p.m., notice of which is set out on pages 13 to 17
	of this circular
“Companies Ordinance”	the Companies Ordinance (Cap 32 of the Laws of Hong
	Kong)
“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
“Directors”	the directors of the Company
“Group”	the Company and its subsidiaries
“Latest Practicable Date”	21st April, 2006, being the latest practicable date prior to
	the printing of this document
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Repurchase Mandate”	the proposal to give a general mandate to the Directors to
	exercise the powers of the Company to repurchase Shares
	up to a maximum of 10% of the issued share capital of the
	Company at the date of the passing of the resolution
“Share(s)”	share(s) of HK$0.10 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“$”	Hong Kong dollar
“%”	per cent

– 1 –

LETTER FROM THE CHAIRMAN

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(Incorporated in Bermuda with limited liability)

(Stock Code: 1193)

Directors: Executive Directors: ZHU Jinkun (Chairman) WANG Guoping (Chief Executive Officer) ONG Thiam Kin YU Yu

Independent Non-executive Directors: WONG Tak Shing LUK Chi Cheong KO Ping Keung

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

Principal Place of Business: Rooms 4003-06 China Resources Building 26 Harbour Road Wanchai Hong Kong

Company Secretary: LEE Yip Wah, Peter

26th April, 2006

To the Shareholders

Dear Sir or Madam,

GENERAL MANDATE TO REPURCHASE SHARES GENERAL MANDATE TO ISSUE SHARES AMENDMENTS TO EXISTING BYE-LAWS RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

On 25th April, 2005, the Directors were granted general mandates to:

• exercise all powers of the Company to repurchase Shares not exceeding 10% of Shares then in issue; and

• to allot, issue and deal with additional Shares, provided that the aggregate nominal amount of the Shares issued does not exceed 20% of the Shares then in issue.

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LETTER FROM THE CHAIRMAN

In addition, a further ordinary resolution was passed to extend the general mandate to issue Shares by the addition of any Shares repurchased by the Company under the authority to repurchase Shares.

In accordance with the terms of the above general mandates and the Listing Rules, these general mandates will lapse at the conclusion of the Annual General Meeting. The Directors believe that renewal of these general mandates is in the interests of the Company and its Shareholders as a whole.

Ordinary resolutions will therefore be proposed at the Annual General Meeting to approve new general mandates to repurchase Shares and to allot, issue and deal with Shares.

The purpose of this circular is to seek your approval as set out in the notice of Annual General Meeting of the relevant ordinary resolutions to be proposed at the Annual General Meeting and to provide you with information regarding the general mandates to repurchase Shares and to issue Shares.

GENERAL MANDATE TO REPURCHASE SHARES

Ordinary Resolution 5B set out in the notice of Annual General Meeting would grant a general mandate to the Directors to exercise the powers of the Company to repurchase, on the Stock Exchange, Shares representing up to 10% of the issued share capital of the Company (i.e. not exceeding 266,837,407 Shares based on the issued share capital of the Company of 2,668,374,071 Shares as at the Latest Practicable Date and assuming that such issued share capital remains the same at the date of passing the resolution). In accordance with the Listing Rules, the authority conferred on the Directors by Ordinary Resolution 5B would continue in force until the conclusion of the next annual general meeting of the Company or any earlier date as referred to in paragraph (c) of such resolution.

An explanatory statement as required under the Listing Rules, giving certain information regarding the Repurchase Mandate is set out in Appendix I to this circular.

GENERAL MANDATE TO ISSUE SHARES

Ordinary Resolution 5A set out in the notice of Annual General Meeting would grant a general mandate to the Directors to allot, issue and deal with Shares up to a limit of 20% of the existing issued share capital of the Company (i.e. not exceeding 533,674,814 Shares based on the issued share capital of the Company of 2,668,374,071) Shares as at the Latest Practicable Date and assuming that such issued share capital remains the same at the date of passing the resolution). Furthermore, Ordinary Resolution 5C set out in the notice of Annual General Meeting would enable the Directors to issue, under the general mandate contained in Ordinary Resolution 5A, an additional number of Shares representing that number of Shares repurchased under the Repurchase Mandate. In accordance with the Listing Rules, the authority conferred on the Directors by Ordinary Resolution 5A would continue in force until the conclusion of the next annual general meeting of the Company or any earlier date as referred to in paragraph (d) of such resolution.

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LETTER FROM THE CHAIRMAN

AMENDMENTS TO EXISTING BYE-LAWS

The Stock Exchange has recently announced certain amendments to the Listing Rules which came into effect on 1 March 2006. Pursuant to paragraph 4(3) on Appendix 3 to the Listing Rules, the Company in general meeting shall have power by ordinary resolution to remove any Director before the expiration of his period of office. In addition, pursuant to A.4.2 of the Code on Corporate Governance Practices on Appendix 14 to the Listing Rules which came into effect on 1 January 2005, all Directors appointed to fill a casual vacancy should be subject to election by Shareholders at the first general meeting after their appointment.

In the circumstances, in order to bring the bye-laws of the Company in line with the Listing Rules, the Directors propose to the Shareholders to approve a special resolution at the Annual General Meeting to amend the existing bye-law 101 requiring that all Directors appointed to fill a casual vacancy should be subject to election by Shareholders at the first general meeting after their appointment and to amend the existing bye-laws 108(A) and 116 to allow the Company to remove directors by ordinary resolution.

RE-ELECTION OF RETIRING DIRECTORS

As at the Latest Practicable Date, the executive Directors of the Company are Mr. ZHU Jinkun, Mr. WANG Guoping, Mr. ONG Thiam Kin and Mr. YU Yu and the independent non-executive Directors of the Company are Mr. WONG Tak Shing, Mr. LUK Chi Cheong and Professor KO Ping Keung.

Pursuant to the existing bye-law 110(A) of the bye-laws of the Company, Mr. WONG Tak Shing, Professor KO Ping Keung and Mr. LUK Chi Cheong shall retire from office at the Annual General Meeting and shall be eligible for re-election. Details of the Directors proposed to be re-elected at the Annual General Meeting are set out in Appendix II hereto.

ANNUAL REPORT AND ANNUAL GENERAL MEETING

A copy of the annual report of the Company for the year ended 31st December, 2005 is enclosed for your review.

The notice convening the Annual General Meeting proposed to be held at Rooms 4003-06, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong is set out on pages 13 to 17 of this circular. At the Annual General Meeting, resolutions will be proposed to the Shareholders in respect of ordinary business to be considered at the Annual General Meeting, including re-election of Directors, and special business to be considered at the Annual General Meeting, being the Ordinary Resolutions proposed to approve the general mandate to issue Shares and the Repurchase Mandate and the Special Resolution proposed to approve the amendments to the existing bye-laws of the Company.

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LETTER FROM THE CHAIRMAN

ACTION TO BE TAKEN

A form of proxy for use at the Annual General Meeting is enclosed. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s principal place of business at Rooms 4003-06, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong as soon as possible and, in any event so as to be received not less than 48 hours before the time appointed for the holding of the Annual General Meeting. Completion and delivery of the form of proxy will not prevent you from attending and voting at the meeting if you so wish.

RIGHT TO DEMAND A POLL

Pursuant to bye-law-78 of the bye-laws of the Company, at the Annual General Meeting, resolutions 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:

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

• (b) by at least three Shareholders present in person (or, in the case of a Shareholder 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 Shareholder or Shareholders present in person (or, in the case of a Shareholder 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 Shareholders having the right to vote at the meeting; or

• (d) by a Shareholder or Shareholders present in person (or, in the case of a Shareholder 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.

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LETTER FROM THE CHAIRMAN

RECOMMENDATION

The Directors believe that the proposed general mandate to issue Shares, the Repurchase Mandate, the proposed amendments to the existing bye-laws of the Company and the proposed re-election of retiring Directors are all in the best interests of the Company as well as its Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders vote in favour of the relevant resolutions to be proposed at the Annual General Meeting.

By Order of the Board ZHU Jinkun

Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide information to you with regard to the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 2,668,374,071 Shares. Subject to the passing of the relevant ordinary resolutions and on the basis that no further Shares are issued or repurchased prior to the Annual General Meeting, exercise in full of the Repurchase Mandate could accordingly result in up to 266,837,407 Shares (representing 10% of the issued share capital of the Company as at the Latest Practice Date) being repurchased by the Company during the course of the period prior to the next annual general meeting.

2. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from Shareholders to enable the Directors to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per share and will only be made when the Directors believe that such repurchases will benefit the Company and its Shareholders.

3. FUNDING OF REPURCHASES

Repurchasing of Shares will be funded entirely from funds legally available for the purpose in accordance with the memorandum of association and bye-laws and the applicable laws of Bermuda. Bermuda law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of the capital paid up on the relevant shares, or the funds of the Company that would otherwise be available for dividend or distribution or the proceeds of a fresh issue of shares made for the purpose. The amount of premium payable on repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company before the shares are repurchased.

There might be adverse effect on the working capital or gearing of the Company upon the full exercise of the Repurchase Mandate when compared with the working capital and gearing position disclosed in the audited accounts contained in the annual report for the year ended 31st December, 2005. However, the Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels in the opinion of the Directors.

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EXPLANATORY STATEMENT

APPENDIX I

4. GENERAL

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates, have any present intention to sell any Shares to the Company under the Repurchase Mandate if the Repurchase Mandate is approved by Shareholders of the Company.

No connected person (as defined in the Listing Rules) has notified the Company that he has a present intention to sell Shares to the Company, or has undertaken not to do so, if the Repurchase Mandate is approved by Shareholders of the Company.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will only exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

However, if as a result of a share repurchase pursuant to the Repurchase Mandate, 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 a 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.

As at the Latest Practicable Date, China Resources National Corp., the ultimate holding company of the Company, is interested in 1,947,102,157 Shares (representing approximately 72.97% of the total issued share capital of the Company as at the Latest Practicable Date). In the event that the Directors exercise in full the power to repurchase Shares which is proposed to be granted pursuant to the resolution referred to above, then (if the present shareholdings remains the same) the attributable interest of China Resources National Corp. would be increased to approximately 81.08% of the issued share capital of the Company and such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

The Directors have no present intention to exercise the power to repurchase Shares pursuant to the Repurchase Mandate to such an extent as to result in the amount of Shares held by the public being reduced to less than 25%.

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EXPLANATORY STATEMENT

APPENDIX I

5. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date were as follows:

		Shares
	Highest		Lowest
	HK$		HK$
April 2005	0.98		0.87
May 2005	0.92		0.86
June 2005	0.96		0.87
July 2005	0.93		0.88
August 2005	0.96		0.86
September 2005	0.88		0.81
October 2005	0.85		0.70
November 2005	0.80		0.72
December 2005	0.83		0.76
January 2006	0.91		0.77
February 2006	0.93		0.86
March 2006	0.98		0.88
April 2006 (up to the Latest Practicable Date)	1.08		0.88

6. SHARE REPURCHASES MADE BY THE COMPANY

The Company has repurchased a total of 1,368,000 Shares on the Stock Exchange during the six months preceding the Latest Practicable Date, details of which are as follows:

	Number of	Highest	Lowest	Aggregate
Date of	shares	price paid	price paid	consideration
repurchase	repurchased	per share	per share	paid
		HK$	HK$	HK$
17/10/2005	300,000	0.80	0.79	238,000
21/10/2005	166,000	0.78	0.78	129,480
24/10/2005	902,000	0.76	0.73	674,520

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Mr. WONG Tak Shing

Mr. WONG Tak Shing, aged 55, was appointed as an independent non-executive Director of the Company in 1998. Mr. WONG was admitted as a solicitor of the Supreme Court of Hong Kong in 1984 and has been in private practice in Hong Kong for over 20 years. From 1984 to 1987, he worked as an assistant solicitor with two local law firms in Hong Kong before setting up his own practice in 1987. Mr. WONG was appointed as a China-Appointed Attesting Officer with effect from 18th January, 2003. Mr. WONG also holds a LL.M. degree from Peking University. Mr. WONG is the Chairman of the Company’s remuneration committee. Except as disclosed, Mr. WONG did not hold any directorship in other listed public companies in the last three years or any position with the Company or other members of the Group. Mr. WONG is and was not connected with any directors, senior management or substantial or controlling Shareholders of the Company.

Subject to retirement by rotation pursuant to the bye-laws of the Company, the term of appointment for Mr. WONG is three years, with effect from 1st January 2005 to 31st December, 2007. Mr. WONG received a director’s fee of HK$100,000 for the year ended 31st December, 2005 which was determined by the Board of Directors under the authority granted by the Shareholders at annual general meeting and with reference to his duties and responsibility with the Company, the Company’s performance and the current market situation.

As at the Latest Practicable Date, Mr. WONG has personal interest in share options to subscribe for 500,000 Shares (representing 0.02% of the issued share capital of the Company as at the Latest Practicable Date) within the meaning of Part XV of the Securities and Futures Ordinance.

Save as disclosed above, Mr. WONG has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information which is required to be disclosed pursuant to rule 13.51(2) of the Listing Rules.

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Professor KO Ping Keung

Professor KO Ping Keung, aged 55, was appointed as an independent non-executive Director of the Company on 17th March, 2004. He received his Ph.D. in Electric Engineering and Computer Science (EECS) from the University of California at Berkeley. He was on the faculty of UC Berkeley from 1983 to 1993, and serviced as the Dean of Engineering at HKUST from 1994 to 2001. For his contribution to the development of device models used for IC design, Professor KO was awarded the 2002 IEEE Solid-State Circuits Award. Professor KO is the Chairman of the Company’s nomination committee. Professor KO is also the independent non-executive director of a number of listed companies in Hong Kong namely, Henderson Land Development Company Limited and Henderson Investment Limited. Except as disclosed, Professor KO did not hold any directorship in other listed public companies in the last three years or any position with the Company or other members of the Group. Professor KO is and was not connected with any directors, senior management or substantial or controlling Shareholders of the Company.

Subject to retirement by rotation pursuant to the bye-laws of the Company, the term of appointment for Professor KO is three years, with effect from 1st January 2005 to 31st December, 2007. Professor KO received a director’s fee of HK$100,000 for the year ended 31st December, 2005 which was determined by the Board of Directors under the authority granted by the Shareholders at annual general meeting and with reference to his duties and responsibility with the Company, the Company’s performance and the current market situation.

As at the Latest Practicable Date, Professor KO has personal interest in share options to subscribe for 900,000 Shares (representing 0.03% of the issued share capital of the Company as at the Latest Practicable Date) within the meaning of Part XV of the Securities and Futures Ordinance.

Save as disclosed above, Professor KO has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information which is required to be disclosed pursuant to rule 13.51(2) of the Listing Rules.

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Mr. LUK Chi Cheong

Mr. LUK Chi Cheong, aged 50, was appointed as an independent non-executive Director of the Company on 31st January, 2002. Mr. LUK is a practicing Certified Public Accountant in Hong Kong and a Fellow Member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants, United Kingdom. Mr. LUK has been in accounting practice since 1995 and prior to that he has over 10 years of diversified experience in audit, construction and airline industry. Mr. LUK is the Chairman of the Company’s Audit Committee. Except as disclosed, Mr. LUK did not hold any directorship in other listed public companies in the last three years or any position with the Company or other members of the Group. Mr. LUK is and was not connected with any directors, senior management or substantial or controlling Shareholders of the Company.

Subject to retirement by rotation pursuant to the bye-laws of the Company, the term of appointment for Mr. LUK is three years, with effect from 1st January, 2005 to 31st December, 2007. Mr. LUK received a director’s fee of HK$100,000 for the year ended 31st December, 2005 which was determined by the Board of Directors under the authority granted by the Shareholders at annual general meeting and with reference to his duties and responsibility with the Company, the Company’s performance and the current market situation.

As at the Latest Practicable Date, Mr. LUK has personal interest in share options to subscribe for 900,000 Shares (representing 0.03% of the issued share capital of the Company as at the Latest Practicable Date) within the meaning of Part XV of the Securities and Futures Ordinance.

Save as disclosed above, Mr. LUK has confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his re-election and there is no other information which is required to be disclosed pursuant to rule 13.51(2) of the Listing Rules.

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Bermuda with limited liability)

(Stock Code: 1193)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of shareholders of the Company will be held at Rooms 4003-06, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on Monday, 22nd May, 2006 at 4:00 p.m. for the following purposes:

1. To receive and consider the audited consolidated financial statements and the reports of the Directors and the Auditors for the year ended 31st December, 2005.

2. To declare a final dividend.

3. To re-elect Directors and to authorise the Board of Directors to fix the remuneration of the Directors.

4. To re-appoint Auditors and to authorise the Board of Directors to fix the Auditors’ remuneration.

5. As special business to consider and, if thought fit, pass with or without amendments, the following resolutions as ordinary resolutions:

6. A. “ THAT :

   • (a) subject to paragraph (c) below, the exercise by the Directors of the Company during the Relevant Period 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, bonds and debentures convertible into shares of the Company) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

   • (b) the approval in paragraph (a) shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors of the Company pursuant to the approval in paragraph (a), otherwise than pursuant to (i) a Rights Issue (as defined in paragraph (d) below) (ii) an issue of shares of the Company under any share option scheme or similar arrangement for the time being adopted by the Company for the grant or issue of shares of the Company or rights to acquire shares of the Company or (iii) an issue of shares of the Company as scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Bye-laws of the Company, shall not exceed the aggregate of (aa) 20% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this Resolution plus (bb) (if the Directors of the Company are so authorised by a separate ordinary resolution of the shareholders of the Company) the nominal amount of share capital of the Company repurchased by the Company subsequent to the passing of this Resolution (up to a maximum equivalent to 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this Resolution), and the said approval shall be limited accordingly; and

• (d) for the purposes 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 law or the Bye-laws of the Company to be held; and

• (iii) the revocation or variation of the approval given by this Resolution by ordinary resolution of the members of the Company in general meeting.

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

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NOTICE OF ANNUAL GENERAL MEETING

• B. “ THAT :

• (a) subject to paragraph (b) below, the exercise by the Directors of the Company during the Relevant Period of all the powers of the Company to repurchase shares of the Company, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of shares which may be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this Resolution and the said approval shall be limited accordingly; and

• (c) 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 law or the Bye-laws of the Company to be held; and

  • (iii) the revocation or variation of the approval given by this Resolution by ordinary resolution of the members of the Company in general meeting.”

• C. “ THAT conditional upon resolution 5A in the notice of the meeting of which this resolution forms a part being passed, the Directors of the Company be and they are hereby authorised to exercise the powers of the Company referred to in paragraph (a) of such resolution 5A in respect of the share capital of the Company referred to in sub-paragraph (bb) of paragraph (c) of such resolution.”

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NOTICE OF ANNUAL GENERAL MEETING

1. As special resolution to consider and, if through fit, pass the following resolution as a special resolution:

SPECIAL RESOLUTION

“ THAT the existing Bye-laws of the Company be and are hereby amended in the following manner:

• (a) Bye-law 101

By deleting the last sentence of the existing Bye-law 101 and substituting therefor the following sentence:

“Any Director so appointed by the Board shall hold office only until the next following general meeting of the Company (in the case of filling a casual vacancy) or until the next following annual general meeting of the Company (in the case of an addition to the existing Board), and shall then be eligible for re-election.”

• (b) Bye-law 108(A)

By deleting the words “special resolution” in paragraph (vii) of the existing Bye-law 108(A) and substituting therefor the words “ordinary resolution”.

• (c) Bye-law 116

By deleting the words “special resolution” in the first sentence of the existing Bye-law 116 and substituting therefor the words “ordinary resolution”.”

By Order of the Board LEE Yip Wah, Peter Secretary

Hong Kong, 26th April, 2006

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

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

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member entitled to attend and vote at the above meeting may appoint one or more proxies to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.

2. In order to be valid, a form of proxy together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof, must be deposited at the Company’s principal place of business not less than 48 hours before the time appointed for holding the meeting. Completion and return of a form of proxy will not preclude you from attending and voting in person if you are subsequently able to be present.

3. The register of members of the Company will be closed from Tuesday, 16th May, 2006 to Monday, 22nd May, 2006, both days inclusive, during which period no transfer of shares of the Company will be effected. In order to qualify for the attendance at the Annual General Meeting and the proposed final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch registrar, Secretaries Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on Monday, 15th May, 2006.

4. With regard to item no.3 of this notice, details of retiring Directors proposed for re-election are set out in appendix II of the circular to shareholders dated 26th April, 2006.

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

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