09:30 NORSTAR<02339> - Announcement & Resumption of Trading (5) The Directors consider that the Subscription is in line with the corporate development of the Group and the future plans as stated in the prospectus of the Company, and therefore is in the best interests of the Group and the Shareholders as a whole. Use of Subscription Proceeds Profound Global currently intends to use the proceeds from the Subscription as follows: - approximately RMB50,000,000 for expanding and strengthening the distribution network in the PRC; - approximately RMB120,000,000 for upgrading production equipment for and increase the capacity of electroplating process; and - the remaining balance of approximately RMB22,560,000 as general working capital of the Profound Global Group. Listing Rules Requirements Mr. Liu was an independent non-executive Director of the Company within the preceding 12 months, therefore a connected person of the Company. Mr. Liu also owns the Profound Global Group and acts as the guarantor guaranteeing the obligations (including the obligations under the warranties relating to the assets, liabilities, business and operations of the Profound Global Group and the legality and validity of the WFOEs after the Subscription, as well as the profit guarantees) of Profound Global under the Subscription Agreement. In view of the size of the Subscription and the relationship between the Company and Mr. Liu, the transaction contemplated under the Agreement constitutes a discloseable and connected transaction of the Company under the Listing Rules. Completion of the Agreement is conditional upon the approval of the Shareholders. Century Founders, the controlling shareholder of the Company, holding approximately 61.54% in the issued share capital of the Company, has no personal interest in the Agreement (save and except through its equity interest in the Company), had given a written approval of the Agreement. An application has been made by the Company to the Stock Exchange for a waiver from strict compliance with the Listing Rules regarding the holding of a physical shareholders' meeting for the approval of the Agreement pursuant to rule 14A.43 of the Listing Rules, on the bases that: (1) none of the shareholders of the Company, including Century Founders, and their associates is interested in the Profound Global Group and the transaction contemplated under the Agreement or is otherwise connected with Mr. Liu (except that Mr. Liu is a former independent non-executive Director within the past 12 months), and the interests of Century Founders in the transaction contemplated under the Agreement are the same as those of other shareholders of the Company; and (2) no shareholder of the Company will be required to abstain from voting if the Company were to convene an extraordinary general meeting for the approval of the Agreement and the transaction thereunder. A circular containing, among other things, a letter from an independent financial adviser containing its views on the Subscription, the recommendation of the independent non-executive Directors and details of the Subscription will be despatched to the Shareholders as soon as practicable. General At the request of the Company, trading in the Shares on the Stock Exchange was suspended with effect from 9:30 a.m. on 26 November, 2004 pending the release of this announcement. Application has been made by the Company for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 1 December, 2004. As at the date of this announcement, the executive Directors are (i) Ms. Lilly Huang, (ii) Mr. Zhou Tian Bao, (iii) Ms. Zhang Zhen Juan, (iv) Mr. Lee Cheuk Yin, Dannis and (v) Mr. Yang Bin and the independent non-executive Directors are (i) Choi Tat Ying, Jacky, (ii) Mr. Wu Chao Ying and (iii) Ms. Zhang Xin, Cindy. Definitions `2004 Profits' the consolidated audited profits after taxation (in accordance with HKGAAP) of the Profound Global Group for the financial year ending 31 December, 2004 `2005 Profits' the consolidated audited profits after taxation (in accordance with HKGAAP) of the Profound Global Group for the financial year ending 31