09:24 SHUI ON CONS<00983> - Announcement (3) POTENTIAL FUTURE CONNECTED TRANSACTIONS YNAOL has agreed to compensate Yunnan JV if the operation of certain production lines of Kunming Cement are suspended or are otherwise removed for governmental policy or reason, by among other things repurchasing these production lines from Kunming Cement. In addition, YNAOL will also procure the extension of the banking facilities currently available to Yunnan Cement and the PRC Subsidiaries to Yunnan JV and its subsidiaries and continue to provide security to the relevant banks with its assets until they are substituted by security from Yunnan JV. In return, Yunnan JV will provide counter indemnity to YNAOL. These future transactions and financial assistance will also constitute future and/or continuing connected transactions of the Company following Completion and will be conducted in compliance with the applicable Listing Rules. The Company is reviewing these and other possible connected transactions with YNAOL following Completion, and further announcement(s) will be made as and when necessary in compliance with the Listing Rules. GENERAL The New Agreements constitute an amendment of the terms of the major transactions of SOCAM under the Existing Agreements. Shui On Company Limited, the controlling shareholder holding 166,148,000 Shares, and Shui On Finance Company Limited, a wholly owned subsidiary of Shui On Company Limited which has an interest in 19,035,000 Shares, together holding 185,183,000 Shares, representing about 69% of the issued share capital of SOCAM, which have approved the Existing Agreements, have further approved the revised terms under the New Agreements. None of the shareholders is required to abstain from voting on the New Agreements. The circular containing, among other thing, details of the Existing and the New Agreements will be despatched to the shareholders of SOCAM as soon as practicable. As indicated in the previous announcement dated 7 January 2005, the Company has applied to the Stock Exchange for a further extension of time for despatch of the circular to 31 March 2005. It is expected that the circular will be despatched on or before 31 March 2005. TERMS USED IN THIS ANNOUNCEMENT: `Acquisition' the acquisition by Prime Allied (Mauritius) in replacement of Prime Allied (BVI), of an 80% equity interest Yunnan Cement `Chuxiong Cement Factory' (Kunming Cement Joint Stock Limited Chuxiong Cement Factory), a company incorporated in the PRC with limited liability. `Existing Agreements' the JO Agreement and the S&P Agreement referred to in the Previous Announcements `Honghe' or `Kaiyuan Cement' (Yunnan State Property Cement Honghe Company Limited, formerly known as Kaiyuan Cement) `Minority Interests' attributable interests in the PRC Subsidiaries not owned by Yunnan Cement or any of its subsidiaries, i.e. 43.87%, 36.30%, 30.00%, 66.75% and 43.87% equity interests of Kunming Cement, Kaiyuan Cement, Yunnan Kaixin, Dongjun Cement and Chuxiong Cement Factory respectively agreed to be sold by YNAOL to Yunnan JV upon completion of the formation of Yunnan JV `New Agreements' the New JV Agreement, the New Transfer Agreement and the Tri-Party Agreement `New JV Agreement' the new joint venture agreement dated 1 February 2005 between Prime Allied (Mauritius) and YNAOL as further supplemented by the Tri-Party Agreement in relation to the establishment of and investment in Yunnan JV which supersedes any inconsistent provisions on the same matter in any pervious documents executed by the same parties `New Production Lines the agreement dated 1 Agreement' February 2005 between Prime Allied (Mauritius), YNAOL, Kunming Cement and Kaiyuan Cement on YNAOL's guarantee on cost overrun in respect of the construction cost of certain new production lines of the PRC Subsidiaries `New Transfer Agreement' the new transfer and capital