09:16 HK CONSTRUCTION<00190>-Announcement&Resumption of Trading(2) Save as disclosed above, the Board confirms that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable under Rule 13.23 of the Listing Rules, neither is the Board aware of any matter discloseable under the general obligation imposed by Rule 13.09 of the Listing Rules, which is or may be of a price-sensitive nature. Made by the order of the Board, the directors of which individually and jointly accept responsibility for the accuracy of this announcement. At the request of the Company, dealings in the Shares on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") were suspended with effect from 10:54 a.m. on 16 March 2005 pending the release of this announcement. Application has been made for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 17 March 2005. As at the date of this announcement, the Board comprises 13 directors, of which 5 are Executive Directors, namely, Mr. OEI Kang Eric, Mr. CHEN Libo, Mr. TSANG Sai Chung Kirk, Ms. SO Hang Selina and Mr. TANG Sau Wai Tom, 5 are Non-Executive Directors, namely, Mr. OEI Tjie Goan, Mr. LI Xueming, Mr. XU Zheng, Mr. LIU Guolin and Mr. FAN Yan Hok Philip and 3 are Independent Non-Executive Directors, namely, Mr. CHUNG Cho Yee Mico, Mr. CHENG Yuk Wo Erik and Mr. Albert Thomas DA ROSA, Junior. By order of the Board OEI Kang Eric Managing Director and Chief Executive Officer Hong Kong, 16 March 2005 According to SMI's written reply dated 21 December 2004, SMI requested that completion for the M Channel S&P Agreement be deferred to on or before 20 March 2005. Despite repeated request by the Board, no reason for the delay has been given by SMI. On 14 March 2005, SMI wrote to the Company and requested for a further delay of the completion date of the M Channel S&P Agreement from 20 March 2005 to 30 June 2005. The Board is reviewing the possible financial impact as a result of the subject defer completion with the reporting accountants of the Group. Upon completion of the M Channel S&P Agreement, the Company will receive cash and/or reduce its liability, which is beneficial to the Company. Nevertheless, the Board believes that the defer in completion of the M Channel S&P Agreement will not immediately give rise to any material adverse impact to the liquidity and/or cashflow of the Group. The Board will continue to negotiate with SMI and urge SMI to complete the M Channel S&P Agreement as soon as possible. The Company will issue further announcement about the findings of the aforesaid review as soon as they are available. 2. THE STELLAR CINEMA S&P AGREEMENT Date: 14 March 2005 Parties: (i) Sino Logic, as the purchaser (ii) Stellar, as the vendor To the best of the Directors' knowledge, information and belief, and after having made all reasonable enquiry, Stellar and its ultimate beneficial owners are independent third parties to the Company, are not connected person of the Company and are not connected to the directors, chief executive, substantial shareholders of the Company, or its subsidiaries and their respective associates, or their connected persons. As stated above, Mr. Qin Hong, an executive Director, is also the managing director and legal representative of Stellar but does not have any shareholding interest in Stellar. Asset involved in the subject transaction: 35% equity interest in and contribution to the registered capital of Stellar Cinema held by Stellar. Information of Stellar Cinema is set out in the section headed "6. Information on the Company and Stellar Cinema" below. Consideration: Approximately HK$39.5 million (equivalent to RMB42 million) payable to Stellar. The consideration will be satisfied by Sino Logic in cash as follows: * Sino Logic shall pay Stellar a deposit of approximately HK$8.5 million (equivalent to RMB9 million) within 30 days upon signing of the Stellar Cinema S&P Agreement; * Sino Logic shall pay Stellar an additional deposit of approximately HK$8.5 million (equivalent to RMB9 million) within 60 days upon signing of the Stellar Cinema S&P Agreement; and * Sino Logic shall pay the balance of approximately HK$22.5 million (equivalent to RMB24 million) to Stellar within 90 days from the date Stellar Cinema obtains the approval from the relevant approving authority in respect of the transfer of the 35% equity interest and the new business licence. Upon Completion, the deposits will be applied to settle the consideration payable to Stellar in full. If any of the conditions has not been fulfilled on or before 1 October 2005 (or such later date as the parties may agree in writing), then Sino Logic and Stellar shall not be bound to proceed with the sale and purchase of the 35% equity interest held by Stellar, and the Stellar Cinema S&P Agreement shall cease to be of any effect (save in respect of claims arising out of antecedent breach). If the Stellar Cinema S&P Agreement is not completed other than due to the default of Sino Logic, all the deposits paid to Stellar shall be returned to Sino Logic.