09:31     START TECH<00706> - Announcement (3)                                

    interests in Fuqing Plastics to another company not                       
    being wholly owned by the holding company of Chatex.                      
    Therefore, Chatex will not dispose of its entire                          
    65% interests in and will continue to keep 26%                            
    interests in, Fuqing Plastics under the Disposal.                         
                                                                              
    The Directors (including the independent                                  
    non-executive Directors) are of the view that the                         
    terms of the Equity Transfer Agreement are on normal                      
    commercial terms and are fair and reasonable and                          
    in the interests of the shareholders of the Company                       
    as a whole.                                                               
                                                                              
    Financial effect on the Transaction                                       
                                                                              
    The simplified group charts of the Group before and                       
    after the Transaction are as follows:                                     
                                                                              
    Diagram 1:  Before the Transaction                                        
                                                                              
    Diagram 2:  After the Transaction                                         
                                                                              
    Prior to the completion of the Transaction, the                           
    shareholding interest of the Company in Fuqing                            
    Plastics is 65% and Fuqing Plastics is considered                         
    as a subsidiary of the Company and its financial                          
    results are consolidated with those of the Company.                       
                                                                              
    After completion of the Transaction, the Company's                        
    interest in Fuqing Plastics, via its various                              
    subsidiaries as referred to in diagram 2 above, is                        
    60.24% and the Group is still in control of the board                     
    of Fuqing Plastics.                                                       
                                                                              
    As discussed with the auditors of the Company, the                        
    scope of consolidation is defined under HKSSAP32                          
    "Consolidated financial statements and accounting                         
    for investments in subsidiaries" issued by the Hong                       
    Kong Society of Accountants. Under HKSSAP32, a                            
    subsidiary is an enterprise that is controlled by                         
    another enterprise ("parent") and is consolidated                         
    into the consolidated financial statements unless                         
    it is acquired and held exclusively with a view to                        
    subsequent disposal in the near future or operates                        
    under severe long-term restrictions which                                 
    significantly impair its ability to transfer funds                        
    to the group ("limitation"). Based on the facts that                      
    the Company controls Fuqing Plastics through Chatex                       
    and Start-Tech (Fujian) and no such limitation                            
    event is expected to arise after the Transaction,                         
    the management of the Company considers that the                          
    financial results of Fuqing Plastics should be                            
    consolidated to the Company's consolidated                                
    financial statements after the completion of the                          
    Transaction.                                                              
                                                                              
    Before the completion of the Transaction, the board                       
    of directors of Fuqing Plastics consists of five                          
    directors of which three directors are appointed                          
    by Chatex and the remaining two directors are                             
    appointed by Batco.                                                       
                                                                              
    After the completion of the Transaction, the board                        
    of directors of Fuqing Plastics will consist of five                      
    directors of which two directors will be appointed                        
    by Start-Tech (Fujian), one director will be                              
    appointed by Chatex and the remaining two directors                       
    will be appointed by Batco.                                               
                                                                              
    The Group has, in substance, disposed of 4.76%                            
    equity interest in Fuqing Plastics under the                              
    Transaction.                                                              
                                                                              
    As a result of the Transaction, a book gain of                            
    approximately HK$27,000 is expected to accrue to