09:37     SHELL ELECTRIC<00081> - Announcement (1)                            

    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.                                                     
                                                                              
    SHELL ELECTRIC MFG. (HOLDINGS) COMPANY LIMITED                            
    (Incorporated in Hong Kong with limited liability                         
    under the Companies Ordinance)                                            
    (Stock Code: 81)                                                          
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
    On 27 January 2005, Sybond, a wholly owned subsidiary                     
    of the Company, entered into (i) an agreement for the                     
    acquisition of the Shi Sale Shares for the Shi                            
    Consideration from Mr. Shi, a director and                                
    substantial shareholder of Appeon; and (ii) an                            
    agreement for the acquisition of the Gao Sale Shares                      
    for the Gao Consideration from Mr. Gao, a director                        
    of Appeon. Completion of the Shi Agreement shall take                     
    place in 5 tranches and it is expected that completion                    
    of the final tranche will take place on or before 3                       
    July 2006, while completion of the Gao Agreement will                     
    take place in 2 tranches and it is expected that                          
    completion of the final tranche will take place on                        
    or before 30 June 2005. Upon completion of the                            
    Acquisitions, the percentage shareholding of Sybond                       
    in Appeon will increase from 77.28% to 91.97%,                            
    assuming none of the Options are exercised.                               
                                                                              
    The terms of the Acquisition Agreements have been                         
    negotiated on an arm's length basis. The Directors                        
    consider that the terms of the Acquisition Agreements                     
    are on normal commercial terms, are fair and                              
    reasonable and in the interests of the shareholders                       
    of the Company as a whole.                                                
                                                                              
    The Acquisitions constitute connected transactions                        
    of the Company under the Listing Rules, pursuant to                       
    which the Company is making this announcement. Since                      
    each of the percentage ratios as defined in Rule                          
    14A.10 of the Listing Rules is less than 2.5%, the                        
    Acquisitions are only subject to the reporting and                        
    announcement requirements set out in Rules 14A.45 and                     
    14A.47 of the Listing Rules but otherwise exempt from                     
    the independent shareholders' approval requirements                       
    under Chapter 14A of the Listing Rules.                                   
                                                                              
    SHI AGREEMENT DATED 27 JANUARY 2005                                       
    Parties                                                                   
    (1)     Zheng John Shi, a director and substantial                        
    shareholder of Appeon, as the vendor; and                                 
                                                                              
    (2)     Sybond, a wholly owned subsidiary of the Company,                 
    as the purchaser                                                          
                                                                              
    Interest Acquired                                                         
    The Shi Sale Shares being 387,500 Shares in the issued                    
    share capital of Appeon representing approximately                        
    10.59% of the issued share capital of Appeon as of                        
    the date of this announcement (assuming no Options                        
    are exercised). Sybond will acquire the Shi Sale                          
    Shares in 5 tranches, totalling 387,500 Shares.                           
                                                                              
    Mr. Shi originally acquired the Shi Sale Shares when                      
    he joined the Group as a key member of management of                      
    Appeon and Mr. Shi paid US$12,787.5 in aggregate for                      
    the Shi Sale Shares in 2003 and 2004.