09:37     COSMOS MACH<00118> - Announcement (1)                               

    The Stock Exchange of Hong Kong Limited takes no                          
    responsibility for the contents of this announcement,                     
    makes no representation as to its accuracy or                             
    completeness and expressly disclaims any liability                        
    whatsoever for any loss howsoever arising from or in                      
    reliance upon the whole or any part of the contents                       
    of this announcement.                                                     
                                                                              
    COSMOS MACHINERY ENTERPRISES LIMITED                                      
                                                                              
    (Incorporated in Hong Kong with limited liability)                        
    (Stock Code: 118)                                                         
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
    The Directors announce that, on 3rd May, 2005, GTPL                       
    has entered into the Agreement with WX Factory.                           
    Pursuant to the Agreement, GTPL has agreed to acquire                     
    from WX Factory its 24% equity interest in Grand                          
    Plastic Machine representing registered capital of                        
    Grand Plastic Machine in the amount of USD684,000                         
    (equivalent to approximately HKD5,321,520) at the                         
    consideration of RMB4,418,700 (equivalent to                              
    approximately HKD4,168,585).                                              
                                                                              
    As Grand Plastic Machine is a non-wholly owned                            
    subsidiary of the Company, WX Factory, being a                            
    substantial shareholder of Grand Plastic Machine, is                      
    a connected person of the Company within the meaning                      
    of the Listing Rules and the Acquisition constitutes                      
    connected transaction of the Company and is subject                       
    to reporting and announcement requirements under                          
    Chapter 14A of the Listing Rules.                                         
                                                                              
    1.      THE AGREEMENT                                                     
    Date:   3rd May, 2005                                                     
                                                                              
    Parties:        (1)     GTPL as purchaser                                 
                                                                              
    (2)     WX Factory as vendor                                              
                                                                              
    Particulars of the Agreement:                                             
    Pursuant to the Agreement, GTPL has agreed to acquire                     
    24% equity interest in Grand Plastic Machine,                             
    representing registered capital of Grand Plastic                          
    Machine in the amount of USD684,000 (equivalent to                        
    approximately HKD5,321,520) from WX Factory at the                        
    consideration of RMB4,418,700 (equivalent to                              
    approximately HKD4,168,585). Upon completion of the                       
    Agreement, Grand Plastic Machine will be owned as to                      
    51% by Grand Group and as to 49% by GTPL.                                 
                                                                              
    Shareholding structure of Grand Plastic Machine                           
    immediately                                                               
    before completion of the Acquisition                                      
                                                                              
                                                                              
                                                                              
    Shareholding structure of Grand Plastic Machine                           
    after completion of the Acquisition                                       
                                                                              
                                                                              
                                                                              
    2.      PARTICULARS OF ASSET TO BE ACQUIRED                               
    Grand Plastic Machine, located in Wuxi, the PRC, was                      
    incorporated in the PRC in 1997 as a Sino-foreign                         
    joint venture the principal businesses of which are                       
    manufacturing, assembling and sale of plastic                             
    injection moulding machines in the PRC. It is                             
    currently owned as to 51% by Grand Group, as to 25%                       
    by GTPL and as to 24% by WX Factory and is therefore                      
    an indirect non-wholly owned subsidiary of the                            
    Company. Grand Group acquired aggregate 51% equity                        
    interest in Grand Plastic Machine in 2002 from GTPL