09:35 NEW WORLD CHINA<00917> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. New World China Land Limited (incorporated in the Cayman Islands with limited liability) (Stock code: 0917) CONTINUING CONNECTED TRANSACTION The Company and NWD entered into the Master Service Agreement on 30 May 2005 in connection with NWD Group's provision of the Services to the Group relating to the Projects for a term of three years ending on 30 June 2008. NWD is the controlling shareholder of the Company, which together with its subsidiaries, is holding approximately 72% of the shares of the Company in issue as at the date of this announcement. The transactions contemplated under the Master Service Agreement therefore constitute continuing connected transaction for the Company under the Listing Rules. Given that each of the relevant percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the maximum annual value of the Services agreed to be provided by NWD Group under the Master Service Agreement exceeds 2.5%, the Master Service Agreement is subject to reporting and announcement requirements and Independent Shareholders' approval. A circular containing details of the Master Service Agreement, a letter from the independent board committee of the Company and a letter of advice from the independent financial advisor to the independent board committee of the Company and the Independent Shareholders together with a notice convening the EGM will be despatched to the shareholders of the Company on or about Friday, 10 June 2005. BACKGROUND NWD Group has been providing construction services including construction, piling and foundation, building and property fitting out work and the supply of construction and building materials to the Group's certain property projects. On 26 July 2002, the Stock Exchange granted a general waiver to the Company from strict compliance with the requirements set out in Chapter 14 of the then Listing Rules for a period of three financial years ending on 30 June 2005 in connection with NWD Group's provision of the aforementioned services to the Group. The Company anticipates that certain construction, engineering and project management services undertaken by NWD Group relating to the project sites of Shanghai Ramada Plaza, Wuhan New World Centre and Dalian New World Plaza amounting to approximately HK$26.4 million will not be completed (the ``Uncompleted Works'') before 30 June 2005. In addition, the Company agreed to continue to engage NWD Group, and NWD agreed to provide the Services relating to the Projects through any member of NWD Group. Accordingly the Company and NWD entered into the Master Service Agreement on 30 May 2005 under which NWD Group is engaged to provide the Services to the Group relating to the Projects for a term of three years ending on 30 June 2008. THE MASTER SERVICE AGREEMENT Terms of the Master Service Agreement Pursuant to the terms of the Master Service Agreement, the Company agrees to continue to engage NWD Group to provide the Services relating to the Uncompleted Works in accordance with the respective terms as agreed between the parties thereto pursuant to the relevant agreements and to engage NWD Group to provide the Services in relation to the Projects. The aforementioned engagement is on a non-exclusive basis and is subject to: (a) the Tender. The Company has the absolute discretion to engage any third parties to provide the Services during the term of the Master Service Agreement; (b) the terms and conditions of the subsequent agreement between the Group and NWD Group should be recorded in writing in the form of an operational agreement (the ``Operational Agreement'') and the term of each of the Operational Agreement should not exceed 30 June 2008; and