09:35     WO KEE HONG<00720> - Announcement (2)                               

    amount bearing interest at the rate of 2.5% per annum payable             
    on 31 December each year with 31 December 2002 as the first               
    interest payment date and repayable in ten equal half yearly              
    instalments commencing from 30 June 2012. The Loan is secured             
    by the Deeds of Charge in respect of the Properties. The loan             
    under the Loan Agreement was for the purpose of settling the              
    remaining balance of the amount of US$26,247,346.27 (equivalent           
    to approximately HK$204.8 million) due from WKHL to MHI in                
    respect of goods and services provided by MHI to WKHL (including          
    interest thereon up to and including 30 June 2002) (part of the           
    amount due was settled by way of a transfer of 24.5% equity               
    interest in MHI-Jinling Air Conditioners Company Limited,                 
    details of which are set out in the announcement made by the              
    Company dated 2 July 2002 and the circular dated 18 July 2002             
    issued by the Company).                                                   
                                                                              
    On 24 February 2005, MHI, WKHL and the Company entered into the           
    Deed of Settlement in relation to the settlement of the Debt              
    due from WKHL to MHI under the Loan Agreement. On the same date,          
    MHI, Stoneycroft, Ever Rising, WKHL and the Company entered into          
    the Deeds of Amendment in relation to the Deeds of Charge in              
    respect of the Properties. The purpose of the Deed of Settlement          
    is to settle the Debt owed under the Loan Agreement in the terms          
    set out therein.                                                          
                                                                              
    The terms of the Settlement, including the terms of the Deed              
    of Settlement and the Deeds of Amendment, are set out in the              
    paragraph headed "The Settlement" below and are arrived at after          
    arm's length negotiation between the Company and MHI.                     
                                                                              
    THE SETTLEMENT                                                            
                                                                              
    The Deed of Settlement                                                    
                                                                              
    Date    :       24 February 2005                                          
                                                                              
    Parties :       (1)     MHI, a company incorporated in Japan principally  
    engaged in the business of shipbuilding, power systems,                   
    aerospace and machinery for industrial and commercial use. To             
    the best of the Directors' knowledge, information and belief,             
    having made all reasonable enquiry, MHI and its ultimate                  
    beneficial owners are Independent Third Parties;                          
    (2) WKHL, a wholly owned subsidiary of the Company;                       
    (3) Stoneycroft, a wholly owned subsidiary of the Company;                
    (4) Ever Rising, a wholly owned subsidiary of the Company; and            
    (5) the Company                                                           
                                                                              
    Terms of Settlement     :       The Debt due from WKHL to MHI under the   
    Loan Agreement is to be settled by payment of an amount of US$6           
    million (equivalent to approximately HK$46.8 million) in two              
    equal instalments of US$3 million (equivalent to approximately            
    HK$23.4 million) each payable on or before 15 and 18 March 2005           
    respectively.                                                             
                    The Company and WKHL shall be jointly and severally liable
    for the Settlement Amount under the Deed of Settlement. The               
    Settlement Amount is determined by MHI and the Company after              
    arm's length negotiation. In agreeing to the Settlement Amount,           
    the Company has taken into account the effect of the payment              
    of the Settlement Amount on its working capital position and              
    the improvement on its gearing ratio as a result of the settlement        
    of the Debt.                                                              
                                                                              
                    The Settlement Amount is to be financed by internal       
    resources of the Group and bank borrowings in the amount of               
    HK$38.4 million, comprising short term facilities in the amount           
    of HK$15 million and long term banking facilities in the amount           
    of HK$23.4 million. The short term facilities bear interest at            
    the rate of 6.25% to 7% per annum. The long term banking                  
    facilities bear interest