Raymond Industrial Limited — Proxy Solicitation & Information Statement 2004

May 4, 2004

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, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in CNPC (Hong Kong) Limited (the “Company”), 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 was effected for transmission to the purchaser or the transferee.

The Stock Exchange of Hong Kong Limited (“the Stock Exchange”) 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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Executive Directors: Wang Mingcai (Executive Chairman) Li Hualin (Executive Vice-Chairman & Managing Director)

Non-Executive Directors:

Registered office: Clarendon House Church Street Hamilton HM11 Bermuda

Lau Wah Sum, GBS, LLD, DBA, JP Aubrey Li Kwok Sing Principal office in Hong Kong: Lin Jingao Rooms 3907-3910 39th Floor * Independent Non-executive Directors 118 Connaught Road West Hong Kong 14th April 2004

To Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

INTRODUCTION

The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“the Listing Rules”) contain provisions to regulate the repurchase by companies with primary listings on the Stock Exchange of their own securities on the Stock Exchange (“the Share Buy Back Rules”).

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LETTER FROM THE CHAIRMAN

The purpose of this circular is to provide you with information relating to the proposed general mandate to repurchase shares and the proposed general mandate to issue shares, with effect from the date of the Annual General Meeting of the Company to be held on 31st May 2004 (the “Annual General Meeting”).

GENERAL MANDATE TO REPURCHASE SHARES

An Ordinary Resolution will be proposed at the Annual General Meeting to grant the directors of the Company (the “Directors”) a general mandate to exercise the powers to repurchase the Company’s shares of HK$0.01 each (the “Shares”) up to 10% of the issued and fully paid-up share capital of the Company as at the date of passing such resolution (the “Repurchase Proposal”). An explanatory statement required under the Share Buy Back Rules to provide the requisite information of the general mandate to repurchase Shares is set out in Appendix hereto.

GENERAL MANDATE TO ISSUE SHARES

It will also be proposed at the Annual General Meeting two Ordinary Resolutions respectively granting to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the issued share capital of the Company at the date of the resolution (excluding Shares to be issued pursuant to options that may be granted under the New Share Option Scheme) and adding to such general mandate so granted to the Directors any Shares representing the aggregate nominal amount of the Shares repurchased by the Company after the granting of the general mandate to repurchase up to 10% of the issued share capital of the Company at the date of the Ordinary Resolutions.

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, statements of fact expressed herein are true, accurate and not misleading, statements of opinion expressed herein have been arrived at after due and careful consideration and there are no other facts not contained in this circular the omission of which would make any statement herein misleading.

PROXY

A proxy form for use at the Annual General Meeting is enclosed with the Annual Report for the year ended 31st December 2003. If you intend to appoint proxy to attend the Annual General Meeting, you are requested to complete the proxy form and return it to the Company’s

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LETTER FROM THE CHAIRMAN

principal office at Rooms 3907-3910, 39th Floor, 118 Connaught Road West, Hong Kong not less than 48 hours before the time appointed for holding the Annual General Meeting or adjourned meeting (as the case may be). Completion and return of the proxy form will not prevent you from attending and voting at the Annual General Meeting if you so wish.

RECOMMENDATION

The Directors believe that the proposed general mandate on repurchase of Shares and the proposed general mandate for Directors to issue new Shares are all in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors recommend that all shareholders should vote in favour of the Ordinary Resolutions nos. 5 to 7 set out in the Notice of Annual General Meeting.

Yours faithfully, Wang Mingcai Executive Chairman

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EXPLANATORY STATEMENT

APPENDIX

SHARE BUY BACK RULES

Under the Share Buy Back Rules, any share repurchased by a company with a primary listing on the Stock Exchange has to comply with certain provisions, including:

(a) Shareholders’ Approval

The Share Buy Back Rules provide that all on-market share repurchases by a company with its primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of a general mandate or by a specific approval in relation to specific transactions.

(b) Source of Funds

Repurchase must be funded out of funds which are legally available for the purpose in accordance with the Memorandum of Association and Bye-Laws of the Company and laws of Bermuda.

REASONS FOR SHARE BUY BACK

The Directors believe that the flexibility afforded by the Repurchase Proposal would be in the best interest of the Company and its shareholders. Such repurchase of Shares may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the value of the Company, its assets and/or its earnings per share and will only be made when the Directors believe that such a repurchase will benefit the Company.

SHARE CAPITAL

As at 14th April 2004 (the “Latest Practicable Date”), being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein, the issued share capital of the Company comprised 4,756,503,512 Shares.

Subject to the passing of the Ordinary Resolution No. 5 at the Annual General Meeting, the Company would be allowed under the buy back mandate to repurchase a maximum of 475,650,351 Shares (on the assumption that no further shares will be issued or repurchased from the Latest Practicable Date up to the date of the Annual General Meeting).

FUNDING OF REPURCHASES

The Directors propose that repurchases of Shares under the buy back mandate would be financed by the Company’s internal resources or existing banking facilities. In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the Memorandum of Association and Bye-Laws of the Company and laws of Bermuda.

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EXPLANATORY STATEMENT

APPENDIX

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report for the year ended 31st December 2003) in the event that the buy back mandate were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the buy back mandate to such extent as would, in the circumstances, have a material adverse impact on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

MARKET PRICES

The highest and lowest prices for shares of the Company traded on the Stock Exchange during each of the previous twelve months were as follows:

	Shares
	Highest	Lowest
	HK$	HK$
2003:
April	0.555	0.515
May	0.730	0.545
June	0.770	0.630
July	0.770	0.690
August	0.840	0.720
September	0.880	0.770
October	1.070	0.810
November	1.200	1.020
December	1.340	1.100
2004:
January	1.430	1.190
February	1.330	1.150
March	1.270	1.050

DISCLOSURE OF INTEREST

The Directors of the Company have undertaken to the Stock Exchange that they will exercise the buy back mandate in accordance with the Listing Rules and the laws of Bermuda and in accordance with the regulations set out in the Memorandum of Association and the ByeLaws of the Company.

If as a result of share repurchase by the Company, a substantial shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of Rules 26 and 32 of The Hong Kong Code on Takeovers and Mergers (the “Code”). Accordingly, a shareholder, or group of shareholders acting in concert, could obtain or consolidate control of the Company or become obliged to make a mandatory offer in accordance with Rule 26 of the Code.

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EXPLANATORY STATEMENT

APPENDIX

As at the Latest Practicable Date, Sun World Limited (“Sun World”) is deemed to be interested in 55.80% (2,653,967,342 Shares) of the issued share capital of the Company. Sun World is a wholly owned subsidiary of China National Petroleum Corporation (“CNPC”) and therefore CNPC is accordingly deemed to have interest in 55.80% of the issued share capital of the Company.

In the event that the Directors should exercise in full the buy back mandate to be granted pursuant to the Ordinary Resolution to be proposed at the Annual General Meeting, the shareholding of Sun World in the Company would be increased to approximately 62.00% of the issued share capital of the Company. The Directors consider that such repurchase would not give rise to an obligation for Sun World to make a mandatory offer under Rule 26 of the Code. The Directors have no intention to exercise the buy back mandate to such extent that the public shareholding in the Company would reduce below 25% of the issued share capital of the Company.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in Listing Rules) presently intend to sell Shares to the Company under the buy back mandate in the event that the buy back mandate is approved by the shareholders of the Company.

The Company has not been notified by any connected persons of the Company that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them to the Company in the event that the buy back mandate is approved by its shareholders.

SHARE PURCHASES MADE BY THE COMPANY

During the previous six months’ period ended 31st March 2004, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Shares.

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