Sinco Pharmaceuticals Holdings Limited — Proxy Solicitation & Information Statement 2005

Apr 19, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult a licensed securities dealer or other bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares of Sino Biopharmaceutical Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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 the Cayman Islands with Limited Liability) (STOCK CODE: 1177)

BONUS ISSUE OF SHARES

AND

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

A notice convening the extraordinary general meeting of Sino Biopharmaceutical Limited to be held at 11:30 a.m. on Friday, 13 May, 2005, at 8th Floor, Crown Room, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong (or as soon as thereafter as the annual general meeting of Sino Biopharmaceutical Limited convened for the same day and at the same place shall have concluded or been adjourned), is set out on pages 8 to 10 of this circular. Whether or not you are able to attend the extraordinary general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding such 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 adjourned meeting should you so wish.

19 April, 2005

CONTENTS

	Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . .	8

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EXPECTED TIMETABLE

The expected timetable is set out below:–

Last day of dealings in Shares cum-entitlements to the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 5 May, 2005 First day of dealings in Shares ex-entitlements to the Bonus Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Friday, 6 May, 2005 Latest time for lodging transfers of Shares for entitlements to the Bonus Shares . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 9 May, 2005 Closure of Register of Members of the Company . . . . . . . . . . . . . . . . . . . Tuesday, 10 May, 2005 Friday, 13 May, 2005 (both days inclusive) Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Friday, 13 May, 2005 Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . 11:30 a.m. on Friday, 13 May, 2005 Despatch of the certificates for the Bonus Shares . . . . . . . . . . . . . . . . . . . Tuesday, 31 May, 2005 Commencement of dealings in the Bonus Shares . . . . . . . . . . . . . . . . . Wednesday, 1 June, 2005

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DEFINITIONS

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

• “Articles”

the articles of association of the Company;

• “Board”

the board of Directors;

• “Bonus Issue”

• the proposed issue of Bonus Shares to Qualifying Shareholders on the basis of one Bonus Share for every two existing Shares held on the Record Date upon and subject to the terms of this circular;

• “Bonus Share(s)”

• new Shares to be allotted and issued pursuant to the Bonus Issue;

• “CCASS” Central Clearing and Settlement System;

• “Company”

Sino Biopharmaceutical Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange;

• “Directors”

• directors of the Company;

• “EGM”

the extraordinary general meeting of the Company to be held at 11:30 a.m. on Friday, 13 May, 2005 (or as soon as thereafter as the annual general meeting of Sino Biopharmaceutical Limited convened for the same day and at the same place shall have concluded or been adjourned), to consider and, if thought fit, to approve, among other things, the Bonus Issue and the amendment to the Articles;

• “Excluded Shareholder(s)”

• the holder(s) of the Shares whose addresses as shown on the Register of Members at the close of business on the Record Date are in places outside Hong Kong and in respect of whom the Directors, based on legal opinions, consider the exclusion from the Bonus Issue to be necessary or expedient on account either of the legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place;

• “Group”

the Company and its subsidiaries;

• “HKSCC”

Hong Kong Securities Clearing Company Limited;

• “Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China;

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DEFINITIONS

“Latest Practicable Date”	15 April, 2005, being the latest practicable date for the
	purpose of ascertaining certain information referred to in
	this circular;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“Old Share Option Scheme”	the share option scheme of the Company adopted on 19
	September, 2000 which was terminated on 26 April, 2002;
“Qualifying Shareholder(s)”	the Shareholder(s), other than Excluded Shareholder(s),
	whose names appear on the Register of Members on the
	Record Date;
“Record Date”	13 May, 2005;
“Register of Members”	the principal or branch register of members of the Company
	maintained in the Cayman Islands or Hong Kong respectively;
“Registrar”	the branch share registrar of the Company, Tengis Limited at
	Ground Floor, Bank of East Asia Harbour View Centre, 56
	Gloucester Road, Wanchai, Hong Kong;
“Share(s)”	share(s) of HK$0.025 each in the share capital of the
	Company;
“Shareholders”	holders of Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited; and
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with Limited Liability)

Executive Directors: Mr. Tse Ping (Chairman) Mr. Tao Huiqi Mr. Wang Jinyu Mr. He Huiyu Ms. Cheng Cheung Ling Ms. Zhao Yanping Mr. Tse Hsin

Registered Office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681GT George Town Grand Cayman British West Indies

Non-executive Director:

Ms. Josephine Price

Independent non-executive Directors: Ms. Zheng Qun, Grace Mr. Li Dakui Ms. Li Jun

Head office and principal place of business: Unit 09, 41st Floor Office Tower Convention Plaza 1 Harbour Road Wanchai Hong Kong 19 April, 2005

To the Shareholders

Dear Sirs,

BONUS ISSUE OF SHARES AND

AMENDMENTS TO THE ARTICLES OF ASSOCIATION

INTRODUCTION

This circular provides you with information relating to the Bonus Issue and the amendments to the Articles.

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LETTER FROM THE BOARD

BONUS ISSUE OF SHARES

In view of the Group’s confidence in the performance of its operations in the current financial year and in order to provide the Shareholders with the opportunity to participate in the growth of the Company by way of capitalisation of a portion of the share premium account of the Company, the Directors have recommended a bonus issue in the proportion of one Bonus Share for every two existing Shares held to Shareholders (other than Excluded Shareholders) whose names appear in the Register of Members on the Record Date subject to the fulfillment of the conditions set out below.

As at the Latest Practicable Date, there were 1,509,072,491 Shares in the share capital of the Company. On the basis that no further Shares are issued or repurchased on or before 13 May, 2005, being the date of the EGM and the Record Date, 754,536,245 Bonus Shares will be issued under the Bonus Issue and the amount of HK$18,863,406.13, being part of the Company’s share premium account, will be capitalised and accordingly such sum will be applied in paying up in full at par the 754,536,245 Bonus Shares. After completion of the Bonus Issue, there will be a total of 2,263,608,736 Shares in the enlarged issued share capital of the Company. The 754,536,245 Bonus Shares represent 50 per cent. of the existing issued share capital of the Company and 33.33 per cent. of the enlarged issued share capital of the Company.

The Bonus Shares to be issued pursuant to the Bonus Issue will, subject to the Memorandum of Association and Articles of the Company, rank pari passu in all respects with the existing issued Shares of the Company with effect from the date of issue, except that they will not be entitled to the recommended final dividend for the financial year ended 31 December, 2004 or the Bonus Issue.

The number of Bonus Shares to be issued under the Bonus Issue to each Shareholder will be rounded down to the nearest whole number. No fractional Shares (if any) will be issued and Shares representing fractions will be aggregated and sold. The proceeds of sale will be retained for the benefit of the Company.

In the absence of any specific instruction to the contrary received in writing by the Registrar, certificates in respect of the Bonus Shares will be sent to the persons entitled thereto at their respective addresses shown in the Register of Members or in the case of joint holders, to the address of the joint holder whose name stands first in the Register of Members in respect of the joint holding. It is expected that certificates for the Bonus Shares will be posted to those entitled thereto at their own risk on 31 May, 2005.

The Bonus Issue is conditional upon:–

• (i) the passing at the EGM of an ordinary resolution to approve the Bonus Issue; and

• (ii) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Bonus Shares.

Application will be made to the Listing Committee of the Stock Exchange for the listing of and permission to deal in the Bonus Shares to be issued pursuant to the Bonus Issue. It is expected that the dealing of Bonus Shares on the Stock Exchange will commence on 1 June, 2005.

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LETTER FROM THE BOARD

Subject to the granting of the listing of and permission to deal in the Bonus Shares on the Stock Exchange as well as compliance with the stock admission requirements of HKSCC, the Bonus Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Bonus Shares on the Stock Exchange or such other date as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

No part of the share capital of the Company is listed or dealt in on any other stock exchange and no such listing or permission to deal is being or proposed to be sought. The Bonus Shares will not be listed or traded on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or proposed to be sought. Dealings in the Bonus Shares will be subject to the payment of stamp duty in Hong Kong.

The Register of Members of the Company will be closed from Tuesday, 10 May, 2005 to Friday, 13 May, 2005, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the final dividend and the Bonus Shares, all transfers accompanied by the relevant share certificates must be lodged with the Registrar, at Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Monday, 9 May, 2005.

ADJUSTMENTS TO THE EXERCISE PRICE OF THE OPTIONS GRANTED UNDER THE OLD SHARE OPTION SCHEME

As at the Latest Practicable Date, 240,000 Shares were subject to the outstanding options granted under the Old Share Option Scheme. The exercise price of the options and the number of Shares subject to the options will be adjusted in accordance with the rules of the Old Share Option Scheme and Rule 17.03(13) of the Listing Rules with effect from the date on which the Bonus Issue becomes effective, subject to the fulfillment of conditions set out above.

AMENDMENTS TO ARTICLES

The relevant amendments to the Listing Rules in relation to the Code on Corporate Governance Practices (the “Code”) has come into effect in January, 2005.

The Board proposes that certain provisions in the Articles of the Company be amended so as to align the Articles with the relevant provisions under the Code. The proposed amendments are in relation to, among other matters, retirement of Directors by rotation, details of which are set out in the notice of the EGM set out on pages 8 to 10 of this circular.

EGM

At the EGM, resolutions will be proposed for the Shareholders to consider and, if thought fit, approve, among other matters, the Bonus Issue and the amendments to the Articles.

The notice convening the EGM is set out on pages 8 to 10 of the circular. Whether or not you intend to attend the meeting, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the principal place of

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LETTER FROM THE BOARD

business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not prevent you from attending and voting at the EGM or any adjourned meeting if you so wish.

Pursuant to Article 66 of the Articles, a resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:–

• (a) by the chairman of such meeting; or

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

• (c) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all 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 authorised 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 shares conferring that right.

RECOMMENDATION

The Directors believe that the Bonus Issue and the amendments to the Articles are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to approve the above matters to be proposed at the EGM.

RESPONSIBILITY STATEMENT

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 not contained in this circular, the omission of which would make any statement herein misleading.

Yours faithfully, For and on behalf of the Board

SINO BIOPHARMACEUTICAL LIMITED

Tse Ping Chairman

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with Limited Liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Sino Biopharmaceutical Limited (“the Company”) will be held at 11:30 a.m. (or as soon as thereafter as the annual general meeting of Sino Biopharmaceutical Limited convened for the same day and at the same place shall have concluded or been adjourned), on Friday, 13 May, 2005, at 8th Floor, Crown Room, The Dynasty Club Limited, South West Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions which will be proposed as resolutions of the Company:

SPECIAL RESOLUTIONS

1. “ THAT the articles of association of the Company be amended as follows:

2. (A) By deleting the word “annual” before the words “general meeting” in the fourth line of the existing Article 86(3).

3. (B) By deleting the existing Article 87 in its entirety and replacing therewith the following new Article 87:

   • “87. (1) Notwithstanding any other provisions in the Articles, at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director shall be subject to retirement by rotation at least once every three years.

     • (2) A retiring Director shall be eligible for re-election and shall continue to act as a Director throughout the meeting at when he retires. The Directors to retire by rotation shall include (so far as necessary to ascertain the number of directors to retire by rotation) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. Any Director appointed pursuant to Article 86(2) or Article 86(3) shall not be taken into account in determining which particular Directors or the number of Directors who are to retire by rotation.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (C) By deleting “pursuant to Article 86(3)” from the first line of Article 88 immediately after the word “meeting”.

• (D) By replacing “on the day following that on which” in the second line of Article 162(a) by “upon”. ”

• “ THAT Article 147 of the articles of association of the Company be amended by inserting the words “or such other proportion as the Members by ordinary resolution may determine” immediately following the word “proportions” in the seventh line of Article 147.”

ORDINARY RESOLUTION

1. “ THAT :

2. (A) conditional upon the resolution set out as resolution numbered (2) in the notice convening this meeting being passed and upon the recommendation of the directors of the Company (the “Directors”), the sum of not less than HK$18,863,406.13, being part of the Company’s share premium account, be capitalised and accordingly such sum be applied in paying up in full at par of not less than 754,536,245 shares of HK$0.025 each in the capital of the Company (“Shares”), such Shares to be allotted and issued and distributed (subject to paragraph 3(C) below) credited as fully paid among the persons (the “allottees”) whose names appear on the registers of members of the Company at the close of business on Friday, 13 May, 2005 and whose addresses as shown in such registers are in Hong Kong or whose addresses as shown in such registers are outside Hong Kong if the Directors, based on legal opinions, do not consider it necessary or expedient to exclude any such shareholders of the Company on account either of the legal restrictions under the laws of the place of its registered address or the requirements of the relevant regulatory body or stock exchange in that place, on the basis of one Share for every two existing Shares held and share certificates to such allottees in respect thereof be issued immediately;

3. (B) such Shares shall not rank for the recommended final dividend or any bonus issue in respect of the financial year ended 31 December, 2004 but shall, subject to the Memorandum of Association and Articles of Association of the Company, rank pari passu in all other respects with the existing issued Shares in the capital of the Company;

4. (C) no fractional Shares shall be allotted and distributed as aforesaid, and the fractional entitlements shall be aggregated, rounded down to the nearest whole number and sold for the benefit of the Company; and

5. (D) the Directors be authorised to do all acts and things as may be necessary or expedient in relation to the bonus issue of Shares.”

By Order of the Board Leung Sau Fung, Fanny Company Secretary

Hong Kong, 19 April, 2005

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy must be deposited at the principal place of business of the Company at Unit 09, 41st Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority not less than 48 hours before the time appointed for the holding of the meeting.

3. Pursuant to Article 66 of the Articles, a resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded:–

4. (a) by the chairman of such meeting; or

5. (b) by at least three Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

6. (c) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to vote at the meeting; or

7. (d) by a Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorised 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 shares conferring that right.

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