11:19 TIANJIN DEV<00882> - Announcement (5) Team Resources was incorporated in the British Virgin Islands under the International Business Companies Act with limited liability on 12 August 1998 by the Company and was 100% owned by the Company. The asset of Team Resources mainly comprises an approximate 6.62% interest in Phase I of the Tang Jin Expressway through 14 Sino-foreign cooperative joint ventures, the Tang Jin Group (Note 3). Golden Horse was incorporated in the British Virgin Islands with limited liability under the International Business Companies Act on 12 February 2002 by Starwell. Starwell and its subsidiaries are beneficially owned as to 95% by the Wu Family 2003 Trust for the benefit of the eligible beneficiaries, namely Wu Xiao Hua, Ng Hiu Kwong, Ng Mau Mau and such persons as shall be appointed as an additional member(s) of the class of eligible capital beneficiaries, and as to the remaining 5% by Almighty Assets Limited which is beneficially owned by Chu Tin Chi, Chan Tai Keung, Frederick and Tong Yee Ming, who are all employees of Starwell. Starwell and its ultimate beneficial owners are independent of and not connected with any of the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or their respective associates. As at the date of this announcement, Starwell held the entire issued ordinary share capital of Golden Horse and the Company held 4,000 Preference Shares in Golden Horse. Golden Horse is an investment holding company of CMD, its wholly-owned subsidiary. CMD, a wholly-owned subsidiary of Golden Horse, was incorporated in the British Virgin Islands with limited liability under the International Business Companies Act on 2 December 1996 and is an investment holding company whose asset mainly comprises a 60% interest in Jinbin Expressway, which commenced operations in May 2001, through 5 Sino-foreign equity joint ventures, together forming the MTD Group (Note 4). Notes: 1. Pursuant to the State-owned Land Use Rights contract dated 14 January 2002 entered into between The Planning and Land Resources Bureau of Tianjin Municipality* () and Tianjin Jinzheng Transportation Company, Tianjin Jinzheng Transportation Company was granted the land use rights of 4.2 hectares of land situated east of Youyi Road, south of Binshui Road, Hexi district and west of Yuexiu Road (the ``Segregated Land'') for commercial use granted under land use rights for a consideration of RMB368,890,000. Tianjin Jinzheng Transportation Company has the right to transfer, lease, mortgage or use the Segregated Land for other economic activities within the specified land use rights period, which is fifty (50) years from the date of issuance of the State-owned Land Use Right Certificate. Tianjin Jinzheng Transportation Company obtained the relevant State-owned Land Use Rights Certificate on 13 May 2002. 2. Pursuant to an agreement dated 22 March 2002, the Company acquired from Starwell 4,000 non-voting convertible redeemable preference shares in Golden Horse (the ``Preference Shares'') at a consideration of US$20,000,000 (equivalent to approximately HK$156,000,000). Other than the Preference Shares, Golden Horse has no outstanding options or securities convertible into shares of Golden Horse as at the date of this announcement. Although Golden Horse and its subsidiaries incurred losses for the three years ended 31 December 2002 and six months ended 30 June 2003, the Tianjin Government put great emphasis on the future development of the Tianjin Port and the New Coastal Area. The Directors believe that the anticipated expansion of the New Coastal Area and future economic growth of Tianjin will result in an increased demand for road infrastructure within the Tianjin City as well as between the Tianjin City and the New Coastal Area. The Directors accordingly believe that this development will add to the future potential of the Jinbin Expressway and therefore the acquisition of Golden Horse and its subsidiaries will allow the Tianjin Development Group to capitalise on such growth. 3. Tang Jin Group was formed by 14 Sino-foreign co-operative joint ventures under the laws of the PRC and is owned as to approximately 6.62% by Team Resources, as to approximately 33.38% by Tianjin Highway Construction Development Corporation, a State-owned enterprise established under the laws of the PRC, and as to approximately 60% by a wholly-owned subsidiary of New World Infrastructure Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange. New World Infrastructure Limited is an independent third party not connected with the Directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates. Tang Jin Group collectively has the right to construct, operate and manage Phase I of the Tang Jin Expressway.