10:22     SMI CORP<00198> - Announcement & Resumption of Trading (4)          

    The consideration payable for the subject transaction was                 
    determined after arm's length negotiations between the                    
    parties to the Stellar Cinema S&P Agreement and based on                  
    the unaudited net asset value of Stellar Cinema as at 31                  
    December 2004 (prepared in accordance with PRC GAAP), being               
    approximately RMB100 million (approximately HK$94.2                       
    million) as reflected in its unaudited management accounts                
    for the year ended 31 December 2004.                                      
                                                                              
    The total consideration of approximately HK$39.5 million                  
    (equivalent to RMB42 million) payable by Sino Logic under                 
    the Stellar Cinema S&P Agreement represents a premium of                  
    approximately 20% to approximately RMB35 million (being                   
    the 35% attributable interest of the underlying unaudited                 
    net assets of Stellar Cinema as at 31 December 2004).                     
                                                                              
    Conditions precedent of the Stellar Cinema S&P Agreement:                 
                                                                              
    Completion of the Stellar Cinema S&P Agreement shall be                   
    conditional upon:                                                         
                                                                              
    (a)   Sino Logic notifying Stellar in writing that it is                  
    satisfied upon  inspection and investigation as to the due                
    diligence review of Stellar Cinema;                                       
                                                                              
    (b)   Sino Logic having received an undertaking and                       
    confirmation letter from Stellar with regard to its                       
    undertaking to repay a bank loan of Stellar Cinema in the                 
    amount of RMB55 million;                                                  
                                                                              
    (c)   Sino Logic having received a PRC legal opinion, in                  
    form and substance satisfactory to Sino Logic, issued by                  
    a firm of lawyers qualified to practise law in the PRC and                
    appointed by Sino Logic in relation to the validity and                   
    the legality of the transactions contemplated under the                   
    Stellar Cinema S&P Agreement;                                             
                                                                              
    (d)   Stellar Cinema having obtained the approval from its                
    board of directors and shareholders of the transactions                   
    contemplated under the Stellar Cinema S&P Agreement                       
    (including the conversion of Stellar Cinema into a                        
    sino-foreign equity joint venture enterprise, with 40% held               
    by Stellar and 60% held by Sino Logic) in accordance with                 
    its articles;                                                             
                                                                              
    (e)   the transactions contemplated under the Stellar                     
    Cinema S&P Agreement having been approved by the board of                 
    directors of Stellar in accordance with its articles;                     
                                                                              
    (f)   the transactions contemplated under the Stellar                     
    Cinema S&P Agreement having been approved by the board of                 
    directors of Sino Logic in accordance with its articles                   
    of association;                                                           
                                                                              
    (g)   Stellar and Sino Logic having executed the new joint                
    venture contract and articles of Stellar Cinema;                          
                                                                              
    (h)   all necessary approvals, licences, permits, consents                
    and authorisation having been obtained for the subject                    
    transfer (including the conversion of Stellar Cinema into                 
    a sino-foreign equity joint venture enterprise, with 40%                  
    held by Stellar and 60% held by Sino Logic) from the                      
    competent PRC government authorities, regulatory bodies                   
    and any relevant parties (including, but not limited to,                  
    * and *); and                                                             
                                                                              
    (i)   the approval of the Stellar Cinema S&P Agreement and                
    the transaction contemplated therein by the Shareholders                  
    at the special general meeting of the Company.                            
                                                                              
    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.                                          
                                                                              
    Completion:   Subject to fulfillment of the conditions set                
    out above, completion shall take place on the completion                  
    date set out below.