10:05     SHANDONG XINHUA<00719> - Announcement (4)                           

    consolidated turnover may be increased.                                   
                                                                              
    (2) Approval by Independent Shareholders                                  
                                                                              
    Under the Listing Rules, for so long as SXPGC remains a substantial       
    shareholder of the Company for the purposes of the Listing Rules, all     
    of the Ongoing Connected Transactions would constitute connected          
    transactions. Since the annual aggregate consideration of these           
    Ongoing Connected Transactions will not be less than HK$10,000,000 and    
    each of relevant percentage ratios as defined in Rule 14A.10 of the       
    Listing Rules will not be less than 2.5%, pursuant to rule 14A.35 of      
    the Listing Rules, these Ongoing Connected Transactions would require     
    disclosure by way of announcement, preparation and despatch of            
    circulars to shareholders and prior approval by the Independent           
    Shareholders of the Company by poll. The Independent Shareholders will    
    also be asked to consider and, if thought fit, approve by poll the New    
    Annual Cap at AGM.                                                        
                                                                              
    5. CONDITIONS TO THE APPROVALS                                            
                                                                              
    The Independent Shareholders' approval regarding the New Annual Cap       
    and the Ongoing Connected Transactions for the two financial years        
    ended 31st December, 2006 shall be subject to the following               
    conditions:                                                               
                                                                              
    1. The Ongoing Connected Transactions                                     
                                                                              
    (1) have been entered into in the ordinary and usual course of            
    business of the Company;                                                  
                                                                              
    (2) have been entered in accordance with the terms of the SXPGC           
    Agreements governing them on terms that are fair and reasonable so far    
    as the Company and its shareholders as a whole are concerned;             
                                                                              
    (3) have been conducted either (A) on normal commercial terms or (B)      
    (where there is no available comparison) on terms no less favourable      
    than those available to or from independent third parties (as the case    
    may be).                                                                  
                                                                              
    2. The annual aggregate amount of the Ongoing Connected Transactions      
    for each financial year shall not exceed the New Annual Cap.              
                                                                              
    3. The independent non-executive Directors of the Company at the          
    relevant time shall review annually the Ongoing Connected Transactions    
    and confirm in the Company's next annual report that the Ongoing          
    Connected Transactions are conducted in the manner as stated in (1),      
    (2) and (3) above.                                                        
                                                                              
    4. The auditors of the Company shall review the Ongoing Connected         
    Transactions annually and provide the Board (a copy of which shall be     
    provided to the Stock Exchange) with a letter (" the Auditor's            
    Letter") stating that:                                                    
                                                                              
    (i) the Ongoing Connected Transactions have received the approval of      
    the Board;                                                                
                                                                              
    (ii) the Ongoing Connected Transactions are in accordance with the        
    pricing policies as stated in the Company's financial statements;         
                                                                              
    (iii) the Ongoing Connected Transactions have been entered into in        
    accordance with the terms of the agreements governing such Ongoing        
    Connected Transactions; and                                               
                                                                              
    (iv) the New Annual Cap for the Ongoing Connected Transactions has not    
    been exceeded.                                                            
                                                                              
    For the purpose of the above review by the international auditors of      
    the Company, SXPGC undertakes to the Stock Exchange that it will          
    provide the international auditors of the Company with access to its      
    accounting records.                                                       
                                                                              
    Where, for whatever reason, the international auditors of the Company     
    decline to accept the engagement or are not able to provide the           
    Auditors' Letter, the Board shall notify the Stock Exchange and           
    publish an announcement immediately.                                      
                                                                              
    5. Details of the Ongoing Connected Transactions in each financial        
    year shall be disclosed as required under rule 14A.46 of the Listing      
    Rules in the annual report of the company for that financial year         
    together with a statement of the opinion of the independent non           
    -executive Directors and the international auditors of the Company as     
    referred in paragraphs (3) & (4) above.                                   
                                                                              
    If any terms of the Ongoing Connected Transactions as mentioned above     
    are altered or if the Company enters into any new agreements with any     
    connected persons (within the meaning of the Listing Rules) in the        
    future, the Company will, in respect thereof, comply with the             
    provisions of Chapter 14A of the Listing Rules governing connected        
    transactions.