09:32 KAMBOAT<00318> - Announcement (2) INFORMATION ON KAMBOAT CHINESE CUISINE COMPANY LIMITED Kamboat Chinese Cuisine Company Limited is a company incorporated in BVI on 12th October, 2000. The authorised share capital of the Vendor is US$50,000 divided into 49,899 ordinary shares of US$1 each and 101 non-voting deferred shares of US$1 each and the issued share capital of the Vendor is US$102 divided into 1 ordinary share of US$1 each and 101 non-voting deferred shares of US$1 each. The nature of business of the Vendor is property holding and the operation of a chain of chinese restaurants. The Company currently indirectly holds 100% of the entire issued share capital of the Vendor. The Vendor is a wholly-owned subsidiary of the Company since incorporation. The Formal Agreement was entered into between the Vendor and the Purchaser pursuant to which the parties have agreed on the sale and purchase of the Property. REASONS FOR AND BENEFITS OF THE DISPOSAL OF THE PROPERTY The Property has been acquired on 4 January, 2003 which is for storage of the inventory and acts as an office solely for the Group, since its acquired. The Property is over 20 years old and the maintenance cost of the Property is high. The maintenance costs would be more than HK$300,000 based on building contractor estimation and the Company has not incurred any of the maintenance costs. The Board considers that the Disposal is in the interests of the Company and consideration of the Disposal is fair and reasonable. The Disposal will provide an opportunity to the Company in realising its non-core asset at reasonable market price. The Company will benefit from the Disposal for the Company's operation expenses will be reduced. The Property is not situated in any central business centre. The maintenance cost of the Property is high. The Board wishes to reallocate net proceeds generated from the Disposal to better opportunities with higher returns. The Board is constantly reviewing the Company's business strategy in maximising shareholders value. It will continue to explore and identify attractive business opportunities as it has done so in the past. The Company is in the process of locating a premise for the Company's office and warehouse. The Board believe alternative premises can be located at a reasonable price/rental based on existing market condition and location of the potential premises for use by the Group for storage and office purposes. As at the date of this announcement, the Company has not entered into any binding agreement to that effect. At present, the Company does not have any designated use for the net proceeds. If any appropriate investment opportunity arises, the Group will consider applying part or all of the net proceeds (about HK$5,850,000) (including but not limited to property investment) and working capital. Any present, the Company do not have any split between new investment and working capital. The Board is of the view that the disposal of the Property is in the interest of the Company and the terms of the Formal Agreement are on normal commercial terms, which are fair and reasonable and in the interest of the shareholders as a whole. The Board confirms that the consideration for the Property has been determined after arm's length negotiations between the parties by reference to the market value for the past 3 months of similar property at the same locality. The parties have determined the consideration by taking comparison with the published price and past transaction history in the public, e.g. the website, offered in the market for similar property in Tai Po for the past 3 months. Accordingly, no independent valuation of the Property has been obtained. The Property has a net book value of HK$3.9 million and there is a gain of HK$2.0 million attributable to disposal of the Property. The acquisition cost of the Property is HK$3.2 million in January 2003. The Board confirms that to the best of their knowledge, information and belief having made all reasonable enquiry, the Purchaser is Independent Third Party of the Company.