09:31     START TECH<00706> - Announcement (2)                                

    authority. Fuqing Plastics will be converted to a                         
    sino-foreign equity joint venture upon completion                         
    of the Equity Transfer Agreement and obtaining the                        
    necessary governmental approvals.                                         
                                                                              
    Consideration                                                             
                                                                              
    The consideration of RMB16,300,000 (equivalent to                         
    approximately HK$15,377,000) was agreed after                             
    arm's length negotiation between Chatex and                               
    Start-Tech (Fujian) and on normal commercial terms.                       
    The consideration was determined with reference to                        
    net asset value of Fuqing Plastics as at 31 December                      
    2003. The consideration represents 0.07% premium                          
    as compared with the net asset value of Fuqing                            
    Plastics as at 31 December 2003. As stated in the                         
    Equity Transfer Agreement, the consideration shall                        
    be paid in cash by Start-Tech (Fujian) within five                        
    business days from the date of approval of the                            
    Equity Transfer Agreement by the relevant PRC                             
    governmental authority, which is expected to be                           
    obtained in August 2004.                                                  
                                                                              
    Information of Fuqing Plastics                                            
                                                                              
    Fuqing Plastics is a wholly foreign-owned                                 
    enterprise established in the PRC on 4 July 1997                          
    with a registered capital of HK$29,700,000. Fuqing                        
    Plastics is principally engaged in the manufacture                        
    of computer related products. Prior to the                                
    completion of the Equity Transfer Agreement, Fuqing                       
    Plastics is owned as to 65% by Chatex and as to 35%                       
    by Batco.                                                                 
                                                                              
    The unaudited net profit of Fuqing Plastics                               
    (prepared in accordance with Hong Kong GAAP) for                          
    two years ended 31 December 2003 are as follows:                          
                                                                              
    For the year ended                                                        
    31 December                                                               
    2002            2003                                                      
                                                                              
    Net profit (before taxation and  extraordinary                            
    items)  HK$10,825,000           HK$19,151,000                             
                                                                              
    Net profit (after taxation and extraordinary items)                       
            HK$9,236,000            HK$17,436,000                             
                                                                              
    The unaudited net asset value of Fuqing Plastics                          
    (prepared in accordance with Hong Kong GAAP) as at                        
    31 December 2003 is approximately HK$38,839,000.                          
                                                                              
    Reasons for the Transaction                                               
                                                                              
    The Group is principally engaged in the provision                         
    of software development and system integration                            
    services and manufacture of computer related                              
    products.                                                                 
                                                                              
    With a view to streamlining the corporate structure                       
    of the Group so that all the major operating                              
    subsidiaries of the Company will be grouped under                         
    the control of Start-Tech (Fujian) so that                                
    Start-Tech (Fujian), together with its                                    
    subsidiaries, will be the principal operating arm                         
    of the Group in a long run, it is proposed that the                       
    Group shall implement the Transaction.                                    
                                                                              
    Based on the PRC legal opinion sought by the Company,                     
    under the relevant PRC laws and regulations, the                          
    tax benefit enjoyed by Chatex on re-investment in                         
    Fuqing Plastics will be withdrawn by the PRC tax                          
    authority and Chatex will then be required to pay                         
    back its tax savings enjoyed as a result of such                          
    re-investment if Chatex disposes of its entire