09:25 CHINA RES CMENT<00712>-Announcement&Resumption of Trading(2) from 9:30 a.m. on 17 January 2005. THE SHARE SWAP AGREEMENT DATED 12 JANUARY 2005 Sellers: The Vendors Buyer: The Company Assets to be acquired: 25% equity interest in China Resources Dongguan Cement. China Resources Dongguan Cement is a company incorporated in Hong Kong with limited liability on 25 January 1994. China Resources Dongguan Cement is an investment holding company and its principal asset is 100% equity interest in Dongguan Cement which is engaged in the manufacture and trading of cement products in the PRC. The Company has owned 75% equity interest in China Resources Dongguan Cement since its listing on 29 July 2003. Consideration: The Consideration of HK$38.0 million will be satisfied by the issue and allotment of a total of 19,000,000 Consideration Shares at the issue price of HK$2.00 per Consideration Share by the Company to the Vendors or its nominees on a pro rata basis to their respective shareholdings. The Consideration and the terms of the Share Swap Agreement have been arrived at after arm's length negotiations between the Company and the Vendors with reference to the audited consolidated net asset value of China Resources Dongguan Cement as at 31 December 2003, amounted to approximately HK$131.5 million. The original cost of investments devoted by the UBE Industries, Sumitomo Corporation and Sumitomo Corporation (Hong Kong) as at 31 December 2004 was approximately HK$18.8 million, approximately HK$15.0 million and approximately HK$3.8 million respectively. The Consideration Shares have a total market value of approximately HK$34.4 million, based on the closing price of HK$1.81 per Share on 12 January 2005, being the last trading day prior to the release of this announcement. The Consideration Shares represent approximately 5.2% of the existing issued share capital of the Company and approximately 5.0% of the enlarged issued share capital of the Company following the issue of the Consideration Shares. The Consideration Shares represent approximately 2.4% of the enlarged issued share capital of the Company following the issue of the Consideration Shares and the Conversion Shares. The Consideration Shares are issued under the General Mandate dated 21 May 2004 under which the Company can issue up to 72,561,492 Shares. The Consideration Shares will, upon allotment, be subject to lock-up undertakings from the Vendors for a period of twelve months from the date of the Memorandum of Strategic Alliance to be entered into on completion of the Share Swap Agreement. The Issue Price represents: * a premium of approximately 10.5% to the closing price of HK$1.81 per Share on 12 January 2005, being the last trading day prior to the release of this announcement; * a premium of approximately 15.5% to the average closing price of HK$1.732 per Share over the last 10 trading days up to and including 12 January 2005, being the last trading day prior to the release of this announcement; and * a discount of approximately 29.6% to the unaudited net asset value of the Company of HK$2.84 per Share as at 30 June 2004. Conditions: Completion of the Share Swap Agreement shall be conditional upon satisfaction of all of the following conditions by not later than the long stop date of 28 February 2005 or such later date as may be mutually agreed by the Company and the Vendors: 1. the approval by the Shareholders in respect of the transactions contemplated by the Share Swap Agreement in accordance with the requirement of the Listing Rules; and 2. the Listing Committee of the Stock Exchange granting or agreeing to grant approval for the listing of and permission to deal in the Consideration Shares. The parties shall use reasonable endeavours to ensure that the conditions are satisfied by no later than the long stop date. If for any reason any of the conditions shall not have been fulfilled by the