10:38     GEELY AUTO<00175>-Announcement & Resumption of Trading (8)          

    manufacture of automobiles.                                               
                                                                              
    Term                                                                      
                                                                              
    From the date of approval of the Supply Agreement by the Independent      
    Shareholders at the EGM to 31 December 2007, and if there is no           
    agreement on the extension period three months prior to the date of       
    expiry of the Supply Agreement, the Supply Agreement will automatically   
    be renewed for 1 year thereafter. The Company will comply with the        
    relevant provisions of Chapter 14A of the Listing Rules upon renewal of   
    the Supply Agreement.                                                     
                                                                              
    Pricing basis                                                             
                                                                              
    The consideration payable under the transactions pursuant to the Supply   
    Agreement will be determined at arm's length negotiations between the     
    relevant parties with reference to prevalent market price or on no more   
    favourable terms than those offered by Fulin Guorun to other independent  
    third parties.                                                            
                                                                              
    The terms of the Supply Agreement have been determined on an arm's        
    length basis and the transactions pursuant thereto will be conducted in   
    the ordinary course of business of the parties concerned and on normal    
    commercial terms. The executive Directors consider that the terms of the  
    Supply Agreement are fair and reasonable and in the interests of the      
    Shareholders as a whole.                                                  
                                                                              
    Condition precedent                                                       
                                                                              
    The Supply Agreement shall be conditional upon the resolution in respect  
    of the Supply Agreement having been passed by the Independent             
    Shareholders by poll at the EGM in accordance with the requirements of    
    the Listing Rules.                                                        
                                                                              
    Annual Cap                                                                
                                                                              
    The Directors expect that the annual aggregate amount of the              
    transactions contemplated under the Supply Agreement will not exceed      
    HK$60 million, HK$80 million and HK$95 million for each of the three      
    years ending 31 December 2005, 2006 and 2007 respectively. The Proposed   
    Cap has been determined by the executive Directors with reference to:     
                                                                              
    (i)        expected increase in Fulin Guoun's sales volume of automobile  
    parts and components to Zhejiang Geely JV in accordance with the          
    expected growth in the business volume of Zhejiang Geely JV for each of   
    the three years ending 31 December 2007;                                  
                                                                              
    (ii)        the increase in the variety of automobile parts and           
    components to be manufactured by Fulin Guorun and the expected increase   
    in the volume of products to be sold to Zhejiang Geely JV for each of     
    the three years ending 31 December 2007 based on the expected growth of   
    the business volume of Zhejiang Geely JV during the same period;          
                                                                              
    (iii)        the historical transaction amount of approximately HK$23.0   
    million of the Continuing Connected Transactions for the year ended 31    
    December 2004; and                                                        
                                                                              
    (iv)        the price trend of the automobile parts and components        
    manufactured by Fulin Guorun in the coming years.                         
                                                                              
    Reasons for entering into the Supply Agreement                            
                                                                              
    The Supply Agreement will provide the Group with an additional source of  
    revenue for of the Group's products. The Directors consider that the      
    Supply Agreement will enable the Group to generate steady revenue from    
    the trading of the automobile parts and components which is in the        
    interests of the Company and the Shareholders as a whole.                 
                                                                              
    Apart from the Continuing Connected Transactions, following closing of    
    the Offer, the Directors will take a further review of the business       
    opportunities and future collaboration between the Group and Zhejiang     
    Geely Holding Limited and its subsidiaries to see if there would be any   
    other possible continuing connected transactions to be effected between   
    the two group of companies. Further announcement in connection with       
    other any possible continuing connected transactions will be made by the  
    Company as and when appropriate in accordance with the Listing Rules.     
                                                                              
    General                                                                   
                                                                              
    A circular containing details of the terms of the Supply Agreement and    
    the Proposed Cap, the relevant advice from the independent board          
    committee of the Company and the advice from independent financial        
    adviser to the independent board committee will be despatched to the      
    Shareholders within 21 days from the publication of this announcement.    
    Proper Glory and its associates will abstain from voting at the