09:35     SHOUGANG INT'L<00697> - Announcement (2)                            

    REASON FOR THE CANCELLATION                                               
    As at 30 June 2004, the Company had (on an unconsolidated                 
    basis) Accumulated Losses of approximately HK$2,920 million               
    and no repayment on the Accumulated Losses has been made                  
    since 30 June 2004. The Company had incurred further losses               
    of approximately HK$17 million (the "Further Losses") during              
    the period from 1 July 2004 to 31 March 2005 but does not                 
    seek to eliminate these losses. The Further Losses were not               
    related to the Accumulated Losses and were unknown when                   
    evidence was prepared for the application to the High Court.              
    The Company only seeks, to the extent permitted by the High               
    Court, to eliminate the Accumulated Losses (which were                    
    permanent losses of approximately HK$2,920 million as at 30               
    June 2004). The Cancellation (and the writing off of                      
    Accumulated Losses against the credit arising on the                      
    Cancellation) is designed to ensure that the Company will                 
    have a capital structure that would permit the payment of                 
    dividends, as and when the Directors consider it appropriate              
    in the future.                                                            
                                                                              
    At this stage, there can be no assurance that a dividend will             
    be declared or paid in the future even in circumstances where             
    the Cancellation becomes effective.                                       
                                                                              
    IMPACT OF THE CANCELLATION                                                
    The Cancellation does not involve any reduction in the                    
    authorised or issued share capital of the Company nor does                
    it involve any reduction in the nominal value of a Share or               
    the trading arrangements (including board lot size)                       
    concerning the Shares.                                                    
                                                                              
    Implementation of the Cancellation will not, of itself,                   
    alter the underlying assets, business, operations,                        
    management, financial position (other than as regards the                 
    payment of the estimated expenses of approximately                        
    HK$500,000) or the share capital of the Company.                          
                                                                              
    GENERAL                                                                   
    A circular containing further details concerning the                      
    Cancellation and containing notice of an extraordinary                    
    general meeting to consider and if thought fit pass the                   
    requisite resolution to approve the Cancellation will be                  
    despatched to the Shareholders on 20 May 2005.                            
                                                                              
    DEFINITIONS                                                               
    In this announcement, the following expressions have the                  
    meanings set out below, unless the context requires                       
    otherwise:                                                                
                                                                              
    "Cancellation"   the proposed cancellation of the amount                  
    standing to the credit of the Company's share premium account             
    and capital reserve account, with the intention that the                  
    credit arising will be applied, to the extent permitted by                
    the High Court, in writing off the accumulated losses of the              
    Company as at 30 June 2004, with the balance of the credit                
    arising being transferred to a special capital reserve to                 
    be created by the Company;                                                
                                                                              
    "Companies Ordinance"   the Companies Ordinance (Chapter 32               
    of The Laws                                                               
         of Hong Kong);                                                       
                                                                              
    "Company"   Shougang Concord International Enterprises                    
    Company Limited, a company incorporated in Hong Kong with                 
    limited liability, the shares of which are listed on the main             
    board of The Stock Exchange of Hong Kong Limited;                         
                                                                              
    "Directors"   the directors of the Company;                               
                                                                              
    "High Court"   the High Court of Hong Kong;                               
                                                                              
    "HK$"   Hong Kong dollars, the lawful currency of Hong Kong;              
                                                                              
    "Hong Kong"   the Hong Kong Special Administrative Region                 
    of the People's Republic of China;                                        
                                                                              
    "Share(s)"   ordinary share(s) of HK$0.20 each in the share               
    capital of the Company; and                                               
                                                                              
    "Shareholders"   the holders of the Shares from time to time.