09:32     BEIJING ENT<0392>BEIJING DEV<0154>-Ann& BEIJING DEV Resume9         

    believe the investments by the Corporate Investors in the                 
    Company could help the future business development of the                 
    Company after the Subscription Completion.                                
                                                                              
    The Directors intend that the Company will continue its existing          
    business except for the trading and manufacturing business of             
    woollen and worsted products which will be disposed of pursuant           
    to the Disposals and also actively study various business                 
    opportunities of further diversifying into other businesses,              
    including exploring business opportunities in the information             
    technology and telecommunications sectors, including network              
    infrastructure facilities, network construction, network                  
    system integration, Internet support related services as well             
    as smart card development.                                                
                                                                              
    6.      THE DISPOSAL AGREEMENTS                                           
                                                                              
    In respect of the HK Disposal Agreement                                   
                                                                              
    Date:                                                                     
                                                                              
    18th January, 2001                                                        
                                                                              
    Parties:                                                                  
                                                                              
    Vendor: The Company                                                       
    Purchaser:      GMG                                                       
    Guarantor:      IHL                                                       
                                                                              
    Particulars of the HK Disposal Agreement:                                 
                                                                              
    The HK Disposal Agreement provides for the sale by the Company            
    to GMG of (a) the interest of the Company of 70% of the issued            
    share capital of Sino Textile for a cash consideration of HK$1.00         
    per share, amounting to a cash consideration of HK$70; (b) all            
    the benefits and interest of and in the Shareholder's Loan at             
    a dollar-for-dollar cash consideration of HK$1,518,208; and (c)           
    the Worsted Products at a cash consideration of HK$4,502,949.             
    IHL will guarantee the performance of the obligations on the part         
    of GMG and indemnify the Company against all losses or expenses           
    which the Company may suffer through or arising from any breach           
    by GMG of such obligations. The Directors consider that the terms         
    of the HK Disposal Agreement, which have been agreed on                   
    commercial terms, are fair and reasonable so far as the                   
    Independent Shareholders are concerned. As a result of the HK             
    Disposal, the Group will recognise a profit of approximately              
    HK$777,000 (which is estimated based on the consideration less            
    current book value).                                                      
                                                                              
    Consideration:                                                            
                                                                              
    The aggregate cash consideration for the HK Disposal is                   
    HK$6,021,227, which was determined by reference to the aggregate          
    of (i) the aggregate par value of the 70 shares of Sino Textile           
    of HK$70; (ii) the amount of HK$1,518,208 of the Shareholder's            
    Loan; and (iii) the book value of Worsted Products of                     
    HK$4,502,949 as at 31st October, 2000. The Directors consider             
    that taking into account (i) the net liabilities of                       
    approximately HK$1,110,000 of Sino Textile as at 31st October,            
    2000; (ii) the track record and financial position of Sino                
    Textile as set out in the section headed "Information on Sino             
    Textile" below; (iii) the market environment of Sino Textile;             
    (iv) the cash consideration of the Shareholder's Loan on a                
    dollar-for-dollar basis; and (v) the aggregate cash                       
    consideration of the HK Disposal which is equivalent to a premium         
    of approximately HK$777,000 to the aggregate value of the                 
    Company's attributable interest to the net liabilities of Sino            
    Textile as at 31st October, 2000, the amount of the Shareholder's         
    Loan and the book value of the Worsted Products as at 31st October,       
    2000, the aggregate consideration for the HK Disposal is fair             
    and reasonable so far as the Shareholders, including the                  
    Independent Shareholders, are concerned.                                  
                                                                              
    Conditions of the HK Disposal:                                            
                                                                              
    Completion of the HK Disposal Agreement is conditional upon the           
    following conditions being fulfilled or, in the case of                   
    condition (a), being waived by GMG:                                       
                                                                              
    (a)     the warranties under the HK Disposal Agreement remaining