10:10     HK CONSTRUCTION<00190> - Ann. & Resumption of Trading (8)           

    Yangpu Development is a newly incorporated company                        
    and its first audited accounts for the year ended                         
    31st December, 2003 has not yet been prepared. Based                      
    on the unaudited management accounts of Yangpu Land                       
    for the year ended 31st December, 2002 prepared by                        
    the Yangpu Development, after making adjustments in                       
    accordance with Hong Kong's generally accepted                            
    accounting principles, the losses from operation                          
    after taxation for the two years ended 31st December,                     
    2002 were approximately HK$131.8 million and                              
    HK$68.5 million respectively. The unaudited net                           
    asset value of Yangpu Land, as adjusted by the                            
    valuation of the land and property of Yangpu Land                         
    dated 31st December, 2003 prepared by an independent                      
    valuer, was approximately HK$103.4 million as at                          
    31st December, 2003. It is estimated by the                               
    management of the Company that the carrying value                         
    of the Yangpu Sale Shares is approximately HK$61.79                       
    million. As the Disposal is a part of the debt                            
    restructuring proposal, the Company is currently                          
    discussing with the auditors in respect of the                            
    financial effect of the debt restructuring proposal,                      
    including gain or loss from the Disposal. Further                         
    details will be disclosed in the circular to be                           
    issued to the Shareholders.                                               
                                                                              
    5.      Consideration                                                     
                                                                              
    The total consideration payable by the Investor for                       
    the Yangpu Sale Shares is HK$300 million which was                        
    arrived at after arm's length negotiation between                         
    the Company and the Investor. The consideration will                      
    be satisfied by the Investor by setting off the same                      
    amount under the Indebtedness.                                            
                                                                              
    6.      Conditions                                                        
                                                                              
    Completion of the Yangpu Agreement is conditional                         
    upon:                                                                     
                                                                              
    (i)     the passing by Shareholders (other than                           
    those who are required to abstain from voting                             
    under the Listing Rules) of an ordinary                                   
    resolution at the EGM approving the Disposal                              
    contemplated under the Yangpu Agreement;                                  
                                                                              
    (ii)    the completion of the Acquisition Agreements                      
    so that the Company shall be the sole                                     
    beneficial owner of the Yangpu Sale Shares;                               
                                                                              
    (iii)   the Debt Conversion Agreement becoming                            
    unconditional except for the condition                                    
    requiring the Yangpu Agreement to become                                  
    unconditional; and                                                        
                                                                              
    (iv)    all necessary approvals, consents or waiver                       
    from the relevant governmental or regulatory                              
    authorities or agencies in Hong Kong                                      
    (including the Stock Exchange and the SFC)                                
    or any other third parties as may be required                             
    for the Company's entering into the Yangpu                                
    Agreement and the consummation of the                                     
    transactions contemplated therein having                                  
    been obtained.                                                            
                                                                              
    In the event that all of the conditions are not                           
    fulfilled on or before 31st March, 2004 (or such                          
    later date as may be agreed between the parties in                        
    writing), the Yangpu Agreement and all rights and                         
    obligations thereunder shall cease and terminate.                         
                                                                              
    7.      Completion                                                        
                                                                              
    Completion shall take place on the fourth business                        
    day from the date of notice from the Company to the                       
    Investor confirming the fulfillment of the                                
    conditions set out in the above, or such other date                       
    as may be agreed between the parties in writing.