10:13     K. WAH INT'L<00173> - Announcement (4)                              

    Joint Venture Company after    to approximately                           
    increasing the registered      HK$683,499,807)                            
    capital of the PRC Company                                                
    and transforming the same                                                 
    into the Joint Venture                                                    
    Company:                                                                  
    Contributions in the           Shanghai Baosteel Group                    
    registered capital of the      Corporation is treated as                  
    Joint Venture Company:         having contributed to 41.5%                
                                   (equivalent to RMB297,835,041              
                                   or approximately                           
                                   HK$283,652,420) of the                     
                                   registered capital of the                  
                                   Joint Venture Company by                   
                                   virtue of the original and                 
                                   entire equity interests in                 
                                   the PRC Company owned by it                
                                   on the date of the Joint                   
                                   Venture Contract.                          
                                   The remaining registered                   
                                   capital of the Joint Venture               
                                   Company will be funded in                  
                                   cash as to 41.5% (equivalent               
                                   to RMB297,835,041 or                       
                                   approximately HK$283,652,420)              
                                   by the Company, as to 15%                  
                                   (equivalent to RMB107,651,219              
                                   or approximately                           
                                   HK$102,524,970) by Mitsubishi              
                                   and as to 2% (equivalent to                
                                   RMB14,353,496 or                           
                                   approximately HK$13,669,996)               
                                   by                                         
                                   Tokyu.                                     
                                                                              
                                                                              
                                                                              
    4.                                                                        
    SOURCE OF FUNDING                                                         
    The investment of the Company in the Joint Venture Company will be        
    funded by the Company's internal resources. Having considered the         
    present working capital requirements of the Company including the         
    investment in the Joint Venture Company, the Directors confirm that       
    there will be no material adverse impact on the cash flow and gearing     
    ratio of the Company. The Joint Venture Company is expected to be         
    classified as a jointly controlled entity in the consolidated             
    accounts of the Company.                                                  
                                                                              
    5.                                                                        
    INFORMATION OF SHANGHAI BAOSTEEL GROUP CORPORATION, THE COMPANY,          
    MITSUBISHI AND TOKYU                                                      
                                                                              
    Shanghai Baosteel Group Corporation is a state-owned corporation.         
    The principal businesses of Shanghai Baosteel Group Corporation           
    include steel manufacturing and land development in PRC.                  
                                                                              
    The Company is an investment holding company and the principal            
    activities of the principal subsidiaries and jointly controlled           
    entities of the Company are property investment and development in        
    Hong Kong and Mainland China as well as investment holding in KWCM.       
    The principal activities of the principal associated companies of the     
    Company are also property investment and development in Hong Kong and     
    Mainland China. KWCM is an investment holding company and the             
    principal activities of the principal subsidiaries and jointly            
    controlled entities of KWCM are the manufacture, sale and                 
    distribution of construction materials in Hong Kong and Mainland          
    China. The principal activities of the principal associated companies     
    of KWCM are also the manufacture, sale and distribution of                
    construction materials in Hong Kong and Mainland China. The jointly       
    controlled entities and the associated companies of the Company and       
    KWCM are accounted for under the equity method where the Group's          
    share of results will be included in consolidated profit and loss         
    statement and the Group's share of net assets will be included in the     
    consolidated balance sheet.                                               
                                                                              
    Mitsubishi is a company listed on Tokyo Stock Exchange. The               
    principal businesses of Mitsubishi include business in energy, metal,     
    machinery, chemical, living essential and investment in land              
    development.                                                              
                                                                              
    Tokyu is a company listed on Tokyo Stock Exchange. The principal          
    business of Tokyu is investment in land development.                      
                                                                              
    6.                                                                        
    INFORMATION OF THE PRC COMPANY AND THE JOINT VENTURE COMPANY              
    The PRC Company is a state-owned limited company and wholly-owned by      
    Shanghai Baosteel Group Corporation immediately prior to the entering     
    of the Joint Venture Contract, Capital Increase Agreement and the         
    Articles of Association. It was incorporated on 17th February 1993 in     
    Shanghai, the PRC under the name of Shanghai Baosteel Real Estate         
    Operation and Development Company  and the name of which was changed      
    to Shanghai Baosteelland Co., Ltd.  on 1st July 2002. As far as the       
    Directors are aware, the capital originally contributed by Shanghai       
    Baosteel Group Corporation in the PRC Company were in cash and in