09:30 SHUI ON CONS<00983> - Announcement The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement. SHUI ON CONSTRUCTION AND MATERIALS LIMITED (Incorporated in Bermuda with limited liability) (Stock code: 983) MAJOR TRANSACTION IN RELATION TO THE PROPOSED INVESTMENT IN A JOINT VENTURE, POTENTIAL CONTINUING CONNECTED TRANSACTION AND MAJOR TRANSACTION IN RELATION TO THE SUBSEQUENT DISPOSAL OF INTEREST IN THE JOINT VENTURE Further delay in despatch of circular Further to the announcements dated 25 June 2004, 19 July 2004, 2 August 2004, 23 August 2004, 6 September 2004, 28 September 2004, 6 October 2004 and 19 November 2004, as YNAOL has yet to acquire the entire equity interests in the PRC Subsidiaries and more time is required for further negotiation with YNAOL on certain guarantees to be given by YNAOL in relation to the transaction, and given the need to update the financial statements of Kunming Cement, Kaiyuan Cement, Yunnan Kaixin and Dongjun Cement as set out in the accountants' reports of the circular to 31 December 2004, the Company has applied to the Stock Exchange for a further extension of time for despatch of the circular to 31 March 2005. Reference is made to the announcements dated 25 June 2004, 19 July 2004, 2 August 2004, 23 August 2004, 6 September 2004, 28 September 2004, 6 October 2004 and 19 November 2004 (the `Previous Announcements') of the Company. Terms defined in the Previous Announcements shall, unless otherwise defined herein, bear the same meanings as in this announcement. A circular containing, among other things, information on the JO Agreement and the Lafarge Agreement is required to be despatched to the Shareholders on or before 19 July 2004 under Rule 14.38 of the Listing Rules. The Company has applied to the Stock Exchange for extension of time for despatch of the circular to 2 August 2004, to 23 August 2004, to 6 September 2004, to 30 September 2004, to 30 November 2004 and to 31 December 2004 as stated in the announcements of the Company dated 19 July 2004, 2 August 2004, 23 August 2004, 6 September 2004, 6 October 2004 and 19 November 2004 respectively and obtained the relevant consents to despatch the circular on or before 31 December 2004. YNAOL is still in negotiation with certain minority shareholders of the PRC Subsidiaries and it has yet to acquire the entire equity interests in the PRC Subsidiaries, which constitutes a major step in the Reorganisation. Accordingly, the conditions of the JO Agreement have not yet been fulfilled and completion of the Acquisition has not taken place. As the Reorganisation involves a highly complicated process, it is difficult to predict when it will be completed. In addition, YNAOL has agreed, in principle, to provide Prime Allied with certain guarantees in relation to the transaction (including a cost overrun guarantee in respect of the new production line of Dongjun Cement) pursuant to the JO Agreement. However, the exact mechanism of how to effect these guarantees has not yet been agreed between Prime Allied and YNAOL and more time is required for further negotiation with YNAOL on such guarantees. Supplemental agreement in respect of such guarantees will be entered into in due course and the major terms thereof will be disclosed by way of an announcement and incorporated in the circular. In view of these, there will be a further delay in the despatch of the circular. The financial statements of Kunming Cement, Kaiyuan Cement, Yunnan Kaixin and Dongjun Cement as set out in the accountants' reports of the circular will also be updated to 31 December 2004 to provide more recent financial information to the shareholders of the Company. Accordingly, the Company has applied to the Stock Exchange for a further extension of time for the despatch of the circular under Rule 14.38 of the Listing Rules to 31 March 2005 as more time is needed for updating the financial statements of Kunming Cement, Kaiyuan Cement, Yunnan Kaixin and Dongjun Cement due to the Chinese New Year holidays. By Order of the Board Shui On Construction and Materials Limited Janice Tam Company Secretary Hong Kong, 7 January 2005 * for identification only As at the date of this announcement, the executive directors of the Company are Mr. Vincent Lo Hong Sui, Mr. Wilfred Wong Ying Wai, Mr. Lawrence Choi Yuk Keung, Mr. Frankie Wong Yuet Leung, Mr. Raymond Wong Fook Lam and Mrs. Vivien Lowe Hoh Wai Wan; the non-executive directors are Mr. Louis Wong Hak Wood and Professor Michael John Enright; and the independent non-executive directors are Mr. Anthony Griffiths, Mr. Marvin Cheung Kin Tung and Mr. Moses Cheng Mo Chi.