09:40     COFCO INTL<00506> - Announcement (2)                                

    financial years ended 31 December 2004 and the period from 1              
    January 2005 to 10 March 2005, respectively.                              
                                                                              
    During the Relevant Periods, in respect of any kind of the                
    above-mentioned deposits, the interest rate on such deposit was           
    the interest rate as specified by PBOC in respect of the relevant         
    kind of deposit from time to time.                                        
                                                                              
    DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTIONS                        
                                                                              
    COFCO is the indirect controlling shareholder of the Company              
    with a beneficial interest of approximately 68.52% of the                 
    existing issued share capital of the Company.                             
                                                                              
    COFCO Finance is a beneficially wholly-owned subsidiary of COFCO          
    and is a connected person of the Company under the Listing Rules.         
    According to Rules 14.33 and 14A.35, such placing by the Group            
    of cash deposits, notice deposits and deposits by agreements              
    with COFCO Finance in aggregate constituted discloseable and              
    continuing connected transactions of the Company and should have          
    been subject to the relevant reporting and shareholders approval          
    requirements under the Listing Rules. In addition, disclosure             
    on such deposits should also have been made under Rule 13.13              
    of the Listing Rules.                                                     
                                                                              
    As such deposits were separately placed by some 15 members of             
    the Group in different provinces of the PRC directly with COFCO           
    Finance and the outstanding balance of all deposits fluctuated            
    from time to time during the Relevant Period, substantial time            
    was required to gather the relevant financial information and             
    documents in relation to such deposits and the Company had not            
    been able to ascertain the actual aggregate amount of the daily           
    outstanding balances until recently. Hence, such placing of cash          
    deposits had not been made the subject of an announcement or              
    proposed for shareholders approval or reviewed by the                     
    independent non-executive Directors earlier as required by the            
    Listing Rules. The Stock Exchange has indicated that it will              
    follow up on the compliance issues.                                       
                                                                              
    After becoming aware of the actual aggregate amount involved              
    as disclosed above, the Company procured relevant members of              
    the Group to withdraw all these deposits from COFCO Finance and           
    place them with commercial banks. On demand COFCO Finance                 
    immediately released all the deposits placed by the Group on              
    11 March 2005. COFCO Finance has fully fulfilled its contractual          
    obligations under the terms of the transactions. The Group                
    suffered no damage or loss in relation to the deposits and the            
    withdrawal thereof.                                                       
                                                                              
                                                                              
    Since the withdrawal of the deposits and as at the date of this           
    announcement, there have been no deposits placed by any member            
    of the Group with COFCO Finance. If the Company decides to place          
    deposits with COFCO Finance again in the future, all relevant             
    provisions of the Listing Rules will be complied with.                    
                                                                              
    REASONS FOR AND BENEFITS OF THE DISCLOSEABLE AND CONTINUING               
    CONNECTED TRANSACTIONS WITH COFCO FINANCE                                 
                                                                              
    The terms for the deposit services provided by COFCO Finance              
    to the Group were in line with prevalent commercial banking               
    practices in the PRC and they were not less favourable than those         
    for similar services provided by commercial banks in the PRC.             
                                                                              
    During the Relevant Period, the interest rate on such deposit             
    was the interest rate as specified by PBOC in respect of the              
    relevant kind of deposit. The executive Directors considered              
    that such placing of deposits with