09:28     BAOYE GROUP<02355> - Announcement (5)                               

    Parties :       (1)     The Company as purchaser                          
                                                                              
    (2)     Mr Pang as vendor                                                 
                                                                              
    Particulars                                                               
    Pursuant to the Acquisition Agreement, the Company                        
    has conditionally agreed to acquire and Mr Pang has                       
    conditionally agreed to dispose of his 19% of equity                      
    interests in Building Materials Industrialisation                         
    Company.                                                                  
                                                                              
    Building Materials Industrialisation Company is a                         
    joint stock limited company established in the PRC                        
    on 8 July 1999. Prior to the Acquisition, it was owned                    
    by Baoye Construction, Mr Pang, # (Zhejiang Construction Science and      
    Design Research                                                           
    Institute), # (Zhejiang                                                   
    Baoye Construction and Design Research Co., Ltd.)                         
    (formerly known as #                                                      
    (Zhejiang Building Materials Industrialisation and                        
    Design Research Institute Co., Ltd.)) and Mr Hu                           
    Shaozeng, a non-executive Director, as to 60%, 19%,                       
    15%, 5% and 1% respectively. Immediately prior to the                     
    Acquisition, Building Materials Industrialisation                         
    Company was a 60% subsidiary of the Company.                              
                                                                              
    Upon completion of the Acquisition, Building                              
    Materials Industrialisation Company will be owned as                      
    to 60%, 19%, 15%, 5% and 1% by Baoye Construction,                        
    the Company, # (Zhejiang                                                  
    Construction Science and Design Research Institute),                      
    # (Zhejiang Baoye                                                         
    Construction and Design Research Co., Ltd.) (formerly                     
    known as # (Zhejiang                                                      
    Building Materials Industrialisation and Design                           
    Research Institute Co., Ltd.)) and Mr Hu Shaozeng                         
    respectively. Immediately after the Acquisition,                          
    Building Materials Industrialisation Company will                         
    become a 79% subsidiary of the Company.                                   
                                                                              
    Building Materials Industrialisation Company is                           
    principally engaged in the production and sales of                        
    construction materials.                                                   
                                                                              
    The audited net profit both before and after taxation                     
    of Building Materials Industrialisation Company for                       
    the year ended 31 December 2002 were approximately                        
    RMB17,660,287 (equivalent to approximately                                
    HK$16,660,648) and RMB12,472,914 (equivalent to                           
    approximately HK$11,766,900) respectively prepared                        
    in accordance with the PRC generally accepted                             
    accounting principles. The audited net profit both                        
    before and after taxation of Building Materials                           
    Industrialisation Company for the year ended 31                           
    December 2003 were approximately RMB20,225,488                            
    (equivalent to approximately HK$19,080,649) and                           
    RMB13,551,077 (equivalent to approximately                                
    HK$12,784,035) respectively prepared in accordance                        
    with the PRC generally accepted accounting principles.                    
    The audited net asset value of Building Materials                         
    Industrialisation Company for the two years ended 31                      
    December 2003 were approximately RMB80,084,742                            
    (equivalent to approximately HK$75,551,643) and                           
    RMB93,680,808 (equivalent to approximately                                
    HK$88,378,121) respectively prepared in accordance                        
    with the PRC generally accepted accounting principles.                    
    Based on the management accounts of Building                              
    Materials Industrialisation Company for the 6 months                      
    ended 30 June 2004, the unaudited net profit and                          
    unaudited net asset value of Building Materials                           
    Industrialisation Company were approximately                              
    RMB4,111,037 (equivalent to