11:22     HK CONSTRUCTION<00190> - Announcement (4)                           

    be responsible for the capital contribution to that                       
    extent).                                                                  
                                                                              
    With regard to the difference between the total                           
    investment of RMB300 million and the registered                           
    capital of HK$100 million for the respective Project                      
    Companies, such amounts will be financed by the                           
    respective Project Companies. In the event that the                       
    shareholders of the Project Companies are called upon                     
    to finance any of them, such financing will be made                       
    in accordance with the articles of the relevant                           
    Project Companies on a pro rata basis in accordance                       
    with their respective equity holdings.                                    
                                                                              
    The registered capital of both Project Companies                          
    shall be contributed by their respective shareholders                     
    after (i) the relevant examination and approval                           
    government authorities have granted their approval                        
    to the transfers of the registered capital of the                         
    Project Companies under the relevant Equity Transfer                      
    Agreements, (ii) the approval certificates and the                        
    new business licences of the relevant Project                             
    Companies have been issued; and (iii) the approval                        
    from the competent development and reform                                 
    commission(s) of the PRC Government in respect of the                     
    Projects have been obtained. The Transferor has                           
    undertaken to obtain such approvals by the end of                         
    April 2005 (in the case of the Equity Transfer                            
    Agreement I) and early May 2005 (in the case of the                       
    Equity Transfer Agreement II). In case of any default                     
    by the Transferor in that respect, the Group will                         
    consider its position and, where appropriate, enter                       
    into consultations with the other parties to resolve                      
    any disputes arising from it, while reserving its                         
    rights available under the Equity Transfer Agreements                     
    and the PRC laws.                                                         
                                                                              
    Completion:     Completion of both Equity Transfer                        
    Agreements is conditional on the representatives and                      
    warranties given by the relevant parties remaining                        
    true and accurate.                                                        
                                                                              
    The formal transfers of the 29% and 75% equity                            
    holdings in Project Company I and Project Company II                      
    respectively will take place upon the approvals from                      
    the relevant examination and approval government                          
    authorities having been obtained. The Transferor has                      
    undertaken to procure such approvals by the end of                        
    April 2005. In case of any default by the Transferor                      
    in that respect, the Group will consider its position                     
    and, where appropriate, enter into consultations with                     
    the other parties to resolve any disputes arising from                    
    it, while reserving its rights available under the                        
    Equity Transfer Agreements and the PRC laws.                              
                                                                              
    Other material  Upon completion of the transfer, the                      
    board of directors of Project Company I will                              
      terms:        consist of 5 directors, of which APC will have            
    the right to appoint 3 directors, and each of the                         
    Transferor and Sinoriver will have the right to                           
    appoint one director. In relation to Project Company                      
    II, Sinoriver, the Transferor and APC, if the Option                      
    is exercised by APC, will have the right to appoint                       
    4, 2 and 1 directors respectively to its board of                         
    directors. If the Option is not exercised, Sinoriver                      
    shall be entitled to appoint one more director (i.e.                      
    a total of 5 directors) to Project Company II.                            
                                                                              
    3.      BASIS OF NEGOTIATION OF THE TERMS AND CONDITIONS                  
    OF THE EQUITY TRANSFER AGREEMENTS, REASONS FOR AND                        
    BENEFITS OF THE EQUITY TRANSFER AGREEMENTS AND                            
    FUNDING ARRANGEMENT                                                       
    3.1     The Project Companies and the basis of