09:38     COSMOS MACH<00118> - Announcement (2)                               

    and WX Factory. GTPL reduced its equity interest in                       
    Grand Plastic Machine from 51% to 25% and WX Factory                      
    reduced its equity interest in Grand Plastic Machine                      
    from 49% to 24% in 2002 under the same transaction.                       
    Upon completion of the Agreement, Grand Plastic                           
    Machine will be owned as to 51% by Grand Group and                        
    as to 49% by GTPL and remains an indirect non                             
    wholly-owned subsidiary of the Company. The total                         
    registered capital of Grand Plastic Machine amounted                      
    to USD2,850,000 (equivalent to approximately                              
    HKD22,173,000) as at 31st December, 2004. The audited                     
    net profit before and after taxation (based on PRC                        
    accounting standard) of Grand Plastic Machine for the                     
    year ended 31st December, 2003 amounted to                                
    RMB2,823,094.63 (equivalent to approximately                              
    HKD2,663,297) and RMB2,442,433.79 (equivalent to                          
    approximately HKD2,304,183) respectively. The                             
    audited net profit before and after taxation (based                       
    on PRC accounting standard) of Grand Plastic Machine                      
    for the year ended 31st December, 2004 amounted to                        
    RMB3,522,329 (equivalent to approximately                                 
    HKD3,322,952) and RMB3,089,887 (equivalent to                             
    approximately HKD2,914,988) respectively. The                             
    audited net asset value (based on PRC accounting                          
    standard) of Grand Plastic Machine as at 31st December,                   
    2004 amounted to RMB41,839,229 (equivalent to                             
    approximately HKD39,470,971). The original purchase                       
    cost of the 24% equity interest in Grand Plastic                          
    Machine by WX Factory was USD684,000 (equivalent to                       
    approximately HKD5,321,520) and WX Factory owns such                      
    equity interest since the incorporation of Grand                          
    Plastic Machine in 1997.                                                  
                                                                              
    3.      BASIS AND PAYMENT TERM OF THE CONSIDERATION                       
    The consideration for the Acquisition under the                           
    Agreement is RMB4,418,700 (equivalent to                                  
    approximately HKD4,168,585). The consideration shall                      
    be payable in cash upon completion of the Acquisition                     
    and shall be funded by the internal resources of the                      
    Group. The consideration for Acquisition has been                         
    arrived at after arm's length negotiations between                        
    the parties and are on normal commercial terms after                      
    taking into account the financial performance and net                     
    asset value of Grand Plastic Machine. The                                 
    consideration of RMB4,418,700 (equivalent to                              
    approximately HKD4,168,585) approximately                                 
    represents the attributable 24% of the unaudited net                      
    asset value (based on PRC accounting standard) of                         
    Grand Plastic Machine in the approximate amount of                        
    RMB20,453,000 (equivalent to approximately                                
    HKD19,295,283) as at 31st July, 2004.                                     
                                                                              
    Upon completion of the Acquisition, Grand Plastic                         
    Machine will be owned as to 51% by Grand Group and                        
    as to 49% by GTPL.                                                        
                                                                              
    The Directors (including independent non-executive                        
    Directors) consider that the use of the unaudited net                     
    asset value as at 31st July 2004 of Grand Plastic                         
    Machine (based on PRC accounting standard) as a basis                     
    for determination of the consideration is fair and                        
    reasonable.                                                               
                                                                              
    4.      COMPLETION DATE                                                   
    Completion of the Acquisition shall take place within                     
    the 30 days after the conditions as set out in the                        
    Agreement have been satisfied. Such conditions                            
    include the following:-                                                   
                                                                              
    (i)     each of the parties under the Agreement having                    
    obtained valid board resolutions approving the                            
    transactions contemplated under the Agreement;