10:16     CHI MER DICHAIN<00632> - Announcement (3)                           

    The directors of the Company (including the independent non-executive     
    directors) ("Directors") believe that the terms of the Settlement         
    Agreement are in normal commercial terms, are fair and reasonable and     
    in the interests of the Company and the shareholders of the Company as    
    a whole.                                                                  
                                                                              
    FINANCIAL INFORMATION ON CTG                                              
                                                                              
    Details of the audited consolidated net assets value as at 31st March     
    2004 and 31st March 2003 and the audited loss before and after tax of     
    CTG for the 2 financial years ended 31st March 2004 are set out in the    
    table below:                                                              
                                                                              
      For the year ended  For the year ended                                  
    Items  31st March 2004  31st March 2003                                   
      (US$)  (US$)                                                            
      (Audited)  (Audited)                                                    
                                                                              
    Profit (Loss) before tax   (4,467,000)  (13,035,000)                      
    Profit (Loss) after tax   (4,467,000)  (13,035,000)                       
                                                                              
      As at  As at                                                            
      31st March 2004  31st March 2003                                        
      (US$)  (US$)                                                            
      (Audited)  (Audited)                                                    
                                                                              
    Net assets value   3,828,000  2,547,000                                   
                                                                              
    LISTING RULES IMPLICATION FOR THE COMPANY                                 
                                                                              
    59.19% of the entire issued share capital of CTG is held by Dichain       
    Holdings which is the holding company of the Company holding              
    3,096,553,083 shares of the Company as at the date of this                
    announcement, representing approximately 56.94% of the existing issued    
    share capital of the Company. CTG is a connected person of the Company.   
    The Settlement constitutes a connected transaction for the Company        
    under the Listing Rules. The Directors believe that the terms of the      
    Settlement Agreement are in normal commercial terms. Each of the          
    percentage ratios pursuant to Rule 14.07 of the Listing Rules is less     
    than 25% and the total consideration is less than HK$10 million. The      
    Settlement is therefore subject to the reporting and announcement         
    requirements pursuant to Rule 14A.32(2) of the Listing Rules. The         
    Settlement also constitutes a discloseable transaction of the Company     
    under the Listing Rules. A circular containing details of the             
    Settlement will be dispatched to the Shareholders as soon as              
    practicable. The sharing of cost of Administrative Services between the   
    Company and CTG will continue and CTG has agreed with the Company to      
    settle the costs quarterly commencing from the current financial year.    
    The Directors of the Company (including the independent non-executive     
    Directors) believe that the arrangement of quarterly settlement of the    
    Administrative Costs are in normal commercial terms and are fair and      
    reasonable.                                                               
                                                                              
    GENERAL INFORMATION                                                       
                                                                              
    Shareholders should note that completion of the Settlement is             
    conditional. Shareholders and the investing public should exercise        
    caution when dealing in the Shares.                                       
                                                                              
    As at the date of this announcement, the board of Directors comprises     
    five executive directors, namely Messrs. Fan Di, Li Xinggui, Wu Shiyue,   
    Zheng Yingsheng and Zhou Li Yang, two non-executive directors, namely     
    Messrs. Robert Fung Hing Piu and Wang Shizhen, and three independent      
    non-executive directors, namely Messrs. Barry J. Buttifant, Iain F.       
    Bruce and Victor Yang.                                                    
                                                                              
    By order of the board of                                                  
    China Merchants DiChain (Asia) Limited                                    
    Fan Di                                                                    
    Chairman                                                                  
                                                                              
    Hong Kong, 7th April 2005