09:57     XIN CORP<01141> - Announcement (2)                                  

    On the basis of 1,654,080,285 Existing Shares in issue and                
    the unaudited amount of approximately HK$58.7 million                     
    standing to the credit of the share premium account of the                
    Company as at 31st March, 2005, a credit of approximately                 
    HK$74.4 million will arise from the Capital Reduction and the             
    Share Premium Reduction. Such amount will be transferred to               
    the contributed surplus account of the Company upon                       
    implementation of the Capital Reduction and the Share Premium             
    Reduction. The contributed surplus of the Company will be                 
    applied to eliminate the accumulated losses of the Company,               
    which amounted to approximately HK$71.7 million as at 30th                
    September, 2004. Based on the above, the accumulated losses               
    of the Company will be fully eliminated and there will be a               
    surplus of approximately HK$2.7 million standing to the                   
    credit of the contributed surplus account of the Company                  
    following completion of the Capital Reorganisation.                       
                                                                              
    Other than the expenses to be incurred in relation to the                 
    Capital Reorganisation, the implementation thereof will not               
    alter the underlying assets, business operations, management              
    or financial position of the Company or the interests or                  
    rights of the Shareholders, save for any fractional                       
    Consolidated Shares to which Shareholders may be entitled.                
                                                                              
    An application will be made by the Company to the Listing                 
    Committee of the Stock Exchange for the listing of, and                   
    permission to deal in, Consolidated Shares to be in issue upon            
    the Capital Reorganisation taking effect.                                 
                                                                              
    Subject to the Capital Reorganisation becoming unconditional,             
    Shareholders may submit existing share certificates for                   
    Existing Shares to Tengis Limited, the branch registrar of                
    the Company in Hong Kong, in exchange, at the expense of the              
    Company, for new share certificates for Consolidated Shares               
    (on the basis of 20 Existing Shares for one Consolidated                  
    Share).                                                                   
                                                                              
    Upon the Capital Reorganisation becoming effective, all                   
    existing share certificates for the Existing Shares will be               
    replaced by new certificates for Consolidated Shares for the              
    purposes of trading on the Stock Exchange. Parallel trading               
    arrangements for Existing Shares and Consolidated Shares                  
    will be established for trading on the Stock Exchange.                    
                                                                              
    In order to facilitate the trading of odd lots of Consolidated            
    Shares as a result of the Share Consolidation, the Company                
    will appoint an agent to provide a "matching service" to                  
    Shareholders who wish to buy or sell their holding of odd lots            
    on a "best effort" basis.                                                 
                                                                              
    Further details of the aforesaid (i) arrangement regarding                
    free exchange of share certificates; (ii) parallel trading                
    arrangements for Existing Shares and Consolidated Shares;                 
    and (iii) "matching service" for the trading of odd lots will             
    be included in the circular to be despatched to the                       
    Shareholders and will be announced by way of press                        
    announcement upon despatch of the circular by the Company.                
                                                                              
    5.   Conditions of the Capital Reorganisation                             
                                                                              
    The Capital Reorganisation is conditional on:                             
                                                                              
    (i)   the passing by the Shareholders of a special resolution             
    to approve the Capital Reorganisation;                                    
                                                                              
    (ii)   compliance with the relevant legal procedures and                  
    requirements under Bermuda law to effect the Capital                      
    Reorganisation; and                                                       
                                                                              
    (iii)    the Listing Committee of the Stock Exchange                      
    granting the listing of, and permission to deal in, the                   
    Consolidated Shares in issue and to be issued.                            
                                                                              
    6.   Reasons for the Capital Reorganisation                               
                                                                              
    The unaudited interim financial statements of the Company as              
    at 30th September, 2004 showed that the Company had                       
    accumulated losses of approximately HK$71.7 million. The                  
    Directors consider that it would be inappropriate for the                 
    Company to pay dividends while the deficit remains and the                
    Capital Reorganisation will facilitate such payment as and                
    when appropriate in future. Based on the accumulated losses               
    as at 30th September, 2004, the number of Shares in issue as              
    at the date of this announcement and the unaudited balance                
    of share premium as at 31st March, 2005, it is expected that              
    the accumulated losses of the Company will be fully                       
    eliminated upon the Capital Reduction becoming effective.