09:51     GUANGZHOU PHAR<00874> - Announcement (4)                            

    and (ii) the anticipated growth in the respective values of the Sale      
    Transactions and the Purchase Transactions for the three-year period      
    ending 31 December 2007 (with reference to (a) the historical annual      
    growth since 1999; and (b) the growth for the three months ended 31       
    March 2005 after implementing the new strategy by the Group), the         
    Directors propose that in each of the three financial years ending 31     
    December 2007, (I) the aggregate value of the Sale Transactions shall     
    not exceed HK$360,000,000 (equivalent to approximately RMB382,000,000)    
    ; and (II) the aggregate value of Purchase Transactions shall not         
    exceed HK$741,000,000 (equivalent to approximately RMB785,000,000).       
                                                                              
    The Directors (including the independent non-executive Directors)         
    consider that the Trading Transactions will be conducted in the           
    ordinary and usual course of the business of the Group. In addition,      
    each Trading Transaction will be negotiated on an individual and arm's    
    length basis and will be conducted on normal commercial terms and on      
    terms to the Group no less favourable than those available to or from     
    (as appropriate) Independent Third Parties. Therefore, the Directors      
    (including the independent non-executive Directors) consider that the     
    terms of the Trading Transactions are fair and reasonable so far as       
    the Shareholders are concerned and in the interests of the                
    Shareholders as a whole.                                                  
                                                                              
    GENERAL                                                                   
                                                                              
    The Trading Transactions between the Group and the GPHL Group             
    constitute non-exempt continuing connected transactions for the           
    Company under Chapter 14A of the Listing Rules. Accordingly, the          
    Company will comply with the following conditions in relation to the      
    Trading Transactions:                                                     
                                                                              
    (a) the Trading Transactions shall be entered into:                       
                                                                              
    (i) in the ordinary and usual course of business of the Group;            
                                                                              
    (ii) either on normal commercial terms or, if there are no sufficient     
    comparable transactions to judge whether they are on normal commercial    
    terms, on terms to the Group no less favourable than terms available      
    to or from (as appropriate) Independent Third Parties; and                
                                                                              
    (iii) in accordance with the terms of the agreements governing such       
    transactions on terms that are fair and reasonable and in the             
    interests of the Shareholders as a whole;                                 
                                                                              
    (b) details of the Trading Transactions, including the transaction        
    dates, the parties to the transactions and a description of their         
    connected relationship, a brief description of the transactions and       
    their purpose, the total consideration and terms of the transactions,     
    and the nature and extent of the connected person's interest in the       
    transactions, shall be disclosed in the Company's next annual report      
    and accounts following the occurrence of the transactions in              
    accordance with rule 14A.45 of the Listing Rules;                         
                                                                              
    (c) the Company's independent non-executive Directors shall review        
    annually the Trading Transactions and confirm in the Company's next       
    annual report following the occurrence thereof that the Trading           
    Transactions have been conducted in the manner as stated in paragraphs    
    (a), (b) and (c) above, and if, for whatever reasons, the Company's       
    independent non-executive Directors decline or are unable to provide      
    the confirmation mentioned in this paragraph, the Directors shall         
    notify the Stock Exchange promptly and an announcement shall be           
    published by the Company as soon as practicable;                          
                                                                              
    (d) the Company's auditors shall review the Trading Transactions          
    annually, and provide the Board with a letter confirming that:            
                                                                              
    (i) the Trading Transactions have received the approval of the            
    Directors;                                                                
                                                                              
    (ii) the aggregate amount of the Sale Transactions and the aggregate      
    amount of the Purchase Transactions during each of the financial year     
    ending 31 December 2007 have not exceeded the respective annual caps      
    of HK$360,000,000 (equivalent to approximately RMB382,000,000) and        
    HK$741,000,000 (equivalent to approximately RMB785,000,000);              
                                                                              
    (iii) the Trading Transactions have been entered into in accordance       
    with the terms of the relevant agreements governing the transactions;     
                                                                              
    (iv) the Sale Transactions are in accordance with the pricing policies    
    of the Company;                                                           
                                                                              
    where, for whatever reasons, the Company's auditors decline to accept     
    the engagement or are unable to provide the auditors' letter, the         
    Directors shall notify the Stock Exchange promptly and an announcement    
    shall be published by the Company as soon as practicable; and             
                                                                              
    (e) GPHL shall provide the Company with an undertaking that, for so       
    long as the Company's shares are listed on the Stock Exchange and GPHL    
    remains as a substantial shareholder of the Company, it will provide      
    the Company's auditors with full access to its relevant records to