The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representations 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.

The Directors of Shui On Construction and Materials Limited refer to the announcement of the Company dated 29 September 1997 and the circular issued to the Company's shareholders dated 20 October 1997 in connection with a conditional agreement entered into by the Company with Nanjing Changjiang Cement (Group) Corporation for investing, through Far East Cement Company Limited, a company in which the Group has a 50% interest, in two cement plants in Nanjing, China. This agreement is conditional upon all shareholders of Far East Cement agreeing to invest in these cement plants.

The directors wish to advise that Far East Cement has decided not to participate in these investments. As stated in the aforementioned announcement and circular, in such circumstances, alternative partners in the place of Far East Cement will be sought. The Company is currently in talks with other independent international construction materials groups which have expressed interest in these investments. It is intended that, with the consent of Nanjing Changjiang Cement (Group) Corporation, the Company, together with these potential investors, will take up a 60% interest in the cement plants. The Company's contributions to these investments will be financed with funds raised from the placement and new issue of shares in January 1997.

The Company will issue a further announcement as soon as there is any material development relating to these investments.

By Order of the Board
Wong Yuet Leung, Frankie
Vice-chairman

Hong Kong, 19 November 1997