09:56     SHIMAO CHINA<00649> - Announcement & Resumption (11)                

    which, inter alia, the parties agree to delineate                         
    their respective businesses on the terms and                              
    conditions set out therein. Details of the                                
    non-competition undertaking are set out in the                            
    separate announcement of the Company dated 23                             
    February 2005. Since the majority of the site of the                      
    Suifenhe Shimao Development Project is situated in                        
    Russian territory, the parties to the non-competition                     
    undertaking have agreed that the existing property                        
    investment and development of the Group in Hong Kong                      
    and the PRC and the Suifenhe Shimao Development                           
    Project (comprising a site area of 153 hectares                           
    (equivalent to 1,530,000 sq.m.) of land on the Chinese                    
    border and a site area of 300 hectares (equivalent                        
    to 3,000,000 sq.m.) of land on the Russian border of                      
    the Intertrading Zone) shall not constitute property                      
    business in the PRC. Accordingly, the Company will                        
    not be in breach of the non-competition undertaking                       
    by entering into the S&P Agreement.                                       
                                                                              
    GENERAL                                                                   
    The Acquisition constitutes a major transaction for                       
    the Company under the Listing Rules. The Board                            
    considers that the terms of the S&P Agreement are fair                    
    and reasonable and in the interests of the                                
    Shareholders as a whole. As the Vendor is wholly owned                    
    by Mr. Hui, the Acquisition also constitutes a                            
    connected transaction for the Company under the                           
    Listing Rules and is therefore subject to the approval                    
    of the Independent Shareholders at the SGM. The                           
    Controlling Shareholder and its associates, being the                     
    major shareholder of the Company interested in                            
    approximately 74.74% of the issued share capital of                       
    the Company as at the date of this announcement, will                     
    abstain from voting at the SGM in respect of the                          
    resolutions to approve the S&P Agreement and                              
    transactions contemplated thereunder.                                     
                                                                              
    Partners Capital International Limited has been                           
    appointed as the financial adviser to the Company in                      
    relation to the Acquisition. An independent board                         
    committee will be appointed by the Board for the                          
    purpose of considering the Acquisition and making a                       
    recommendation to the Independent Shareholders. An                        
    independent financial adviser will be appointed to                        
    advise the independent board committee in this                            
    regard.                                                                   
                                                                              
    To be in line with the current Listing Rules in                           
    relation to share option schemes and to enable the                        
    Company to grant share options to selected eligible                       
    participants as incentive or rewards for their                            
    contributions to the Group, the Board also proposes                       
    to terminate the existing share option scheme of the                      
    Company and to adopt a new share option scheme of the                     
    Company in the SGM. A circular containing, inter alia,                    
    details of the Acquisition, the S&P Agreement, the                        
    recommendation from the independent board committee                       
    and the advice of the independent financial adviser                       
    in respect of the Acquisition and transactions                            
    contemplated thereunder, as well as details of the                        
    new share option scheme and a notice to convene the                       
    SGM, will be despatched to the Shareholders as soon                       
    as practicable.                                                           
                                                                              
    Trading in the Shares was suspended with effect from                      
    9:30 a.m. on 21 February 2005 pending the publication                     
    of this announcement. Application has been made to                        
    the Stock Exchange for resumption of trading in the                       
    Shares with effect from 9:30 a.m. on 24 February 2005.                    
                                                                              
    Terms used in this announcement: