10:42     CHEUNG TAI HONG<00199> - Announcement & Resumption (9)              

    the Company as enlarged by the issue of such                              
    Conversion Shares at the Initial Conversion Price.                        
                                                                              
    Assuming all the HK$44 million Placing Convertible                        
    Notes are successfully placed by the Placing Agent,                       
    upon full conversion of the Placing Convertible Notes                     
    at the Initial Conversion Price, a total of                               
    100,000,000 new Conversion Shares will be issued,                         
    representing approximately 27.7% of the existing                          
    issued share capital of the Company and approximately                     
    21.7% of the issued share capital of the Company as                       
    enlarged by the issue of such Conversion Shares at                        
    the Initial Conversion Price; and upon full                               
    conversion of the Subscription Convertible Notes and                      
    Placing Convertible Notes at the Initial Conversion                       
    Price, a total of 2,272,727,272 new Conversion Shares                     
    will be issued, representing approximately 630% of                        
    the existing issued share capital of the Company and                      
    approximately 86.3% of the issued share capital of                        
    the Company as enlarged by the issue of such                              
    Conversion Shares at the Initial Conversion Price.                        
                                                                              
    As stated in the announcement of Hanny dated 20 April                     
    2005, as at the date of this announcement, no decision                    
    has been made by Loyal Concept on whether or when or                      
    the extent to which the conversion rights attached                        
    to the Subscription Convertible Notes are to be                           
    exercised. To the best knowledge of the Company, the                      
    Company has not received any indication from any of                       
    the Fund Subscribers or Kopola as to whether or when                      
    or the extent to which they would exercise the                            
    conversion rights attached to the Subscription                            
    Convertible Notes. In the event of conversion of the                      
    Subscription Convertible Notes and Placing                                
    Convertible Notes taken place, the Company will make                      
    appropriate announcements from time to time in the                        
    manner as described in the paragraph headed "Dilution                     
    effect on Shareholders" below.                                            
                                                                              
    Conversion price                                                          
    The initial conversion price of HK$0.44 per Share was                     
    arrived at after arm's length negotiation between the                     
    Subscribers, the Placing Agent and the Company and                        
    represents:                                                               
                                                                              
    .      a premium of approximately 8.6% over the closing                   
    price of HK$0.405 per Share as quoted on the Stock                        
    Exchange on 24 March 2005, being the last trading day                     
    immediately before trading in the Shares was                              
    suspended pending the release of this announcement;                       
                                                                              
    .      a premium of approximately 3.8% over the average                   
    closing price of HK$0.424 per Share as quoted on the                      
    Stock Exchange for the last 10 trading days up to and                     
    including 24 March 2005; and                                              
                                                                              
    .      a premium of approximately 22.2% over the unaudited                
    net asset value per Share of approximately HK$0.36                        
    based on the unaudited consolidated net asset value                       
    of the Company as at 30 September 2004 and the issued                     
    share capital of the Company as at the date of this                       
    announcement.                                                             
                                                                              
    Based on the above analysis, the Directors consider                       
    the terms of the Convertible Notes, including the                         
    Initial Conversion Price, are fair and reasonable and                     
    in the interests of the Shareholders as a whole.                          
                                                                              
    SHAREHOLDING STRUCTURE                                                    
    Set out below is a table showing (i) the shareholding                     
    structure of the Company as at the date of this                           
    announcement; (ii) the Company's shareholding                             
    structure upon completion of the Subscription and                         
    full conversion of the Subscription Convertible