10:44     SHANGHAI IND H<00363> - Announcement (3)                            

    As at the date of this announcement, SI United together with its          
    subsidiary hold a 59% shareholding in Medical Instruments. Upon           
    completion of the Acquisition Agreement, SI United and its                
    subsidiary will together hold a 99% shareholding in Medical               
    Instruments.                                                              
                                                                              
    After completion of the Acquisition Agreement, Medical Instruments        
    will be converted from a joint stock limited liability company to         
    a limited liability company.                                              
                                                                              
    THE DISPOSAL                                                              
                                                                              
    Date of the Disposal Agreement                                            
                                                                              
    21st April, 2005                                                          
                                                                              
    Parties                                                                   
                                                                              
    Purchaser: Shanghai Medical Group                                         
                                                                              
    Vendor: SI Pharmaceutical                                                 
                                                                              
    Interests to be disposed of                                               
                                                                              
    SI Pharmaceutical has agreed to dispose of an amount of                   
    RMB175,680,000 in the registered capital of Sunve Pharmaceutical,         
    representing 48% of the total equity interest in Sunve                    
    Pharmaceutical, to Shanghai Medical Group.                                
                                                                              
    Consideration                                                             
                                                                              
    The consideration for the Disposal amounted to RMB155,800,000             
    (equivalent to approximately HK$146,981,000). As SI Pharmaceutical        
    is a company incorporated outside the PRC, it is agreed that the          
    consideration payable to SI Pharmaceutical for the Disposal will          
    be paid in cash in US dollars equivalent (at the exchange rate of         
    Renminbi to United States Dollars as announced by the State               
    Administration of Foreign Exchange on the date of completion of the       
    Disposal Agreement) by Shanghai Medical Group on the date of              
    completion of the Disposal Agreement.                                     
                                                                              
    The consideration for the Disposal was determined after arm's             
    length negotiations between Shanghai Medical Group and SI                 
    Pharmaceutical by reference to the audited consolidated net asset         
    value of Sunve Pharmaceutical as at 31st December, 2004 of                
    approximately RMB270,793,000 (equivalent to approximately                 
    HK$255,465,000) which was prepared in accordance with the generally       
    accepted accounting principles in the PRC. The consideration for          
    the Disposal represents a premium of approximately 19.86% over the        
    corresponding audited consolidated net asset value of Sunve               
    Pharmaceutical.                                                           
                                                                              
    Disposal Conditions                                                       
                                                                              
    The Disposal Agreement will take effect upon fulfillment of, inter        
    alia, the following Disposal Conditions:                                  
                                                                              
    (a)   written consent to the transfer of equity interest in Sunve         
    Pharmaceutical from SI Pharmaceutical to Shanghai Medical Group           
    pursuant to the Disposal Agreement and undertaking to waive the           
    corresponding pre-emption right being obtained from Shanghai Sunve        
    and Shanghai Medical I&E, the other shareholders of Sunve                 
    Pharmaceutical (as required under the applicable PRC laws);               
                                                                              
    (b)   approval being obtained from Shanghai United Assets and             
    Equity Exchange (a PRC government department) of the completion of        
    the transfer of property under the Disposal Agreement;                    
                                                                              
    (c)   approval of the Disposal Agreement and the transactions             
    contemplated thereunder by the independent shareholders of the            
    Company at a general meeting convened by the Company or, if a waiver      
    is granted by the Stock Exchange to the Company of the requirement        
    to convene a general meeting in respect of the transaction under          
    the Disposal Agreement, written approval being obtained in respect        
    of the Disposal Agreement and the transactions contemplated               
    thereunder from independent shareholders of the Company holding           
    more than 50% of the nominal value of all the Shares giving the right     
    to attend and vote at the general meeting to approve the Disposal         
    Agreement and the transactions contemplated thereunder, in                
    accordance with the relevant requirement under the Listing Rules;         
                                                                              
    (d)   approval of the Disposal Agreement by the administration            
    department of foreign investment of the People's Government of            
    Shanghai Municipality;                                                    
                                                                              
    (e)   the issue of an approval by Shanghai Municipal Administration       
    of Foreign Exchange to Shanghai Medical Group to acquire foreign          
    currency for carrying out the transactions under the Disposal             
    Agreement and all other necessary approvals, consents and licences        
    for completion of the Disposal (if any); and                              
                                                                              
    (f)   satisfaction of the Acquisition Conditions.