09:56     ANHUI CONCH<00914> - Announcement (2)                               

    Parties                                                                   
                                                                              
    (i)     Xingye Company, as vendor; and                                    
                                                                              
    (ii)    Kuiyang Conch, as purchaser.                                      
                                                                              
    Assets disposal and acquisition                                           
                                                                              
    Under the Xingye Assets Disposal and Acquisition Agreement, it was agreed 
    by both parties that:                                                     
                                                                              
    Kuiyang Conch would acquire from Xingye Company all its cement and clinker
    production related assets, including machinery and equipment, construction
    materials, construction-in-progress, non-production ancillary facilities, 
    land use right, buildings and intangible assets such as limestone mining  
    right, and would assume Xingye Company's liabilities including bank loans 
    and certain payables.                                                     
                                                                              
    Consideration and pricing basis                                           
                                                                              
    According to the terms of the Xingye Assets Disposal and Acquisition      
    Agreement, the Xingye Project was completed on 25 May 2005 ("Xingye       
    Completion Date"). There is no condition precedent for the completion of  
    the Xingye Project.                                                       
                                                                              
    The consideration of the Xingye Project was determined by reference to    
    the difference between the appraised value of the assets to be acquired   
    and the face value of liabilities to be assumed by Kuiyang Conch as at    
    31 March 2005 ("Xingye Valuation Date") and the difference between the    
    estimated face value of newly added assets and newly incurred liabilities 
    during the period from the Xingye Valuation Date to the Xingye Completion 
    Date.                                                                     
                                                                              
    Based on the Assets Valuation Report, the value of all the cement and     
    clinker production related assets to be acquired by Kuiyang Conch from    
    Xingye Company as at the Xingye Valuation Date are as follows:            
                                                                              
    Unit: RMB                                                                 
    Item                                                                      
    Face value                                                                
    Appraised value                                                           
    Remarks                                                                   
    Equipment                                                                 
    239,165,333                                                               
    248,574,000                                                               
    Equipment includes machinery and equipment, non-production ancillary      
    facilities and construction-in-progress                                   
                                                                              
    Fixed assets                                                              
    182,666,530                                                               
    199,662,000                                                               
    Fixed assets include buildings and land use rights for 50 years over a    
    land located in Xingye County, Yulin City, Guangxi Province of            
    313,957.76 sq.m.                                                          
                                                                              
    Intangible assets                                                         
    54,677,200                                                                
    52,242,000                                                                
    Intangible assets include limestone mining rights for 20 years            
                                                                              
    Total assets                                                              
    476,509,063                                                               
    500,478,000                                                               
                                                                              
    The face value of liabilities of Xingye Company to be assumed by Kuiyang  
    Conch as at the Xingye Valuation Date amounted to RMB248,593,158          
    (equivalent to approximately HK$234,521,847), which was mainly comprised  
    of bank loans and certain payables.                                       
                                                                              
    Accordingly, as at the Xingye Valuation Date, the difference between the  
    appraised value of the assets to be acquired and the face value of        
    liabilities to be assumed by Kuiyang Conch was RMB251,884,842 (equivalent 
    to approximately HK$237,627,209), which is the appraised value of the     
    assets to be acquired less the face value of liabilities to be assumed.