10:42 <00275> & <00235>-Joint Ann. & <00235> Resumed (19) commercial residential buildings and complex in Beijing, the PRC), investment in high technology (including hydro-electric technology) and industrial enterprises (including investment in a joint venture with a renowned Korean car manufacturer) as well as investment management in the PRC. Hanny confirms that to the best of the knowledge, information and belief of the Hanny Directors and having made all reasonable enquiries, the Offeror and its ultimate beneficial owner are third parties independent of Hanny and its connected persons (as defined in the Listing Rules). Paul Y and Hanny are presumed to be parties acting in concert with the Offeror for the purpose of the Takeovers Code. The Offeror intends that China Strategic will continue with the Remaining Business. The Offeror will review the financial position and business operations of China Strategic with a view to strengthening the operations and future development of China Strategic. The Offeror will also adopt the business strategy of making investments with good earnings potential that can complement the business of China Strategic. The Offeror will also explore other business opportunities and consider whether any asset disposals, asset acquisitions, business diversification will be appropriate in order to enhance the long term growth of China Strategic. In the event that any of disposal and/or acquisition materialises, further announcement will be made as and when required by the Listing Rules. Proposed new directors of China Strategic The China Strategic Board is currently made up of ten directors, comprising five executive directors, two alternate directors and three independent non-executive directors. All the existing directors of China Strategic will resign on the earliest date permitted under the Takeovers Code. As at the date of this announcement, the number of new directors to be nominated has not been determined. Further announcement will be made as and when there is a change in the composition of the China Strategic Board. Maintenance of the listing status of China Strategic The Stock Exchange has stated that if, at the close of the China Strategic Offer, less than the minimum prescribed percentage applicable to China Strategic, being 25% of the Consolidated China Strategic Shares are held by the public, or if the Stock Exchange believes that: - a false market exists or may exist in the trading of the Consolidated China Strategic Shares; or - there are insufficient Consolidated China Strategic Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend dealings in the Consolidated China Strategic Shares. The Offeror intends China Strategic to remain listed on the Stock Exchange. The director of the Offeror and the new directors to be appointed to the China Strategic Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in China Strategic's shares. COMPARISON OF THE COMBINED OFFER PRICE UNDER THE GDI OFFER AND the CHINA STRATEGIC OFFER WITH MARKET PERFORMANCE Option 1 of GDI Offer and the China Strategic Offer: On the basis of the closing price of HK$3.7 per Hanny Share as quoted on the Stock Exchange on the Last Trading Day, the combined consideration under Option 1 of the GDI Offer and the China Strategic Offer, adjusted for the Capital Reorganisation, is equivalent to HK$0.743 per existing China Strategic Share and represents: - a discount of approximately 54.4% to the unaudited consolidated net asset value of China Strategic of approximately HK$1.63 per China Strategic Share as at 30th June, 2004; - a premium of approximately 37.6% over the closing price of HK$0.54 per China Strategic Share as quoted on the Stock Exchange on the Last Trading Day; - a premium of approximately 29.9% over the average closing price of approximately HK$0.572 per China Strategic Share for the ten consecutive trading days up to and including the Last Trading Day;