09:19 ANHUIEXPRESSWAY<00995> - Announcement (2) operation of the JV. As the Company will own 100% of the registered capital of the JV, upon the Acquisition Agreement becomes effective, the JV is required to be dissolved and the concession right of Gaojie Expressway and other relevant assets of the JV will be transferred to the Company. Consideration RMB1,350 million (approximately HK$1,274 million) was determined on arm's length negotiation between the Company and AEHC with reference to, inter alia, the net asset value of the JV and the outstanding shareholders' loan of the JV owed to AEHC as at 31st December, 2004. Such consideration will be satisfied in cash by internal resources (about 40%) and bank borrowings (about 60%) of the Company within 10 working days after the Completion, which expects to take place in October 2005. After taking into account, inter alia, the reasons and benefits as set out in the paragraphs under the section `Reasons of the Acquisition', the directors of the Company consider that the Acquisition is in the interests of the Company and its shareholders and the terms of the Acquisition Agreement are fair and reasonable as far as the Independent Shareholders are concerned and determined on normal commercial terms. Conditions The Acquisition Agreement shall become effective upon fulfillment of all of the following conditions: (1) the passing of an ordinary resolution to approve the Acquisition at the general meeting of the Company by the Independent Shareholders and the passing of an ordinary resolution to approve the Acquisition at the Board meeting; (2) all approvals and authorisations of the Acquisition have been obtained in accordance with the laws of the PRC; and (3) the passing of a resolution to approve the transfer of the Acquired Interest and the dissolve of the JV by the shareholders of the JV at the shareholders' meeting of the JV. In the event that the above conditions of the Acquisition Agreement are not fulfilled by the Company on or before 31st December, 2005, the Acquisition Agreement will lapse and no party shall have any claim against the other party. INFORMATION ON THE JV The JV was established on 23rd July, 1997 by AEHC and the Company with a term of 32 years. The registered capital of the JV is RMB300 million (approximately HK$283 million) and the total investment of the JV is RMB1,844 million (approximately HK$1,740 million). The registered capital of theJV is currently owned as to 49% by AEHC and 51% by the Company. The JV is principally engaged in the development and operation of Gaojie Expressway. Gaojie Expressway is a dual carriageway four-lane toll expressway with a length of approximately 109.7 kilometres. It forms part of the priority national trunk highway system extending from Shanghai to Chengdu. Gaojie Expressway is an important part of the highway network linking the central and western regions with the southeast coastal regions of the PRC. Gaojie Expressway opened to traffic on 1st May, 1999. The table below sets out the selected financial information on the JV based on the audited accounts (prepared in accordance with the PRC accounting standards) for the three years ended 31st December, 2003 and the unaudited accounts for the years ended 31st December, 2004: For the 12 months ended 31st December, 2004 2003 2002 2001 RMB'mil RMB'mil RMB'mil RMB'mil (Unaudited) (Audited) (Audited) (Audited) Revenue 267.9 199.8 177.3 134.1 Net profit 119.6 87.4 66.5 39.3 before taxation Taxation (39.4) (29.6) (15.8) (9.1) Net profit 80.2 57.8 50.7 30.2 after taxation As at 31st December, 2003, the audited total assets of the JV was about RMB1,634.5 million (approximately HK$1,542.0 million) and the audited net assets of the JV was about RMB351.5 million (approximately HK$331.6 million). As at 31st December, 2004, the