10:00 POLYTEC ASSET<00208> - Announcement (3) The Group is principally engaged in securities investment and trading, garment trading and property investment, development and trading. It has always been the corporate strategy of the Group to explore new potential markets and other business opportunities from time to time so as to further broaden its income base. Throughout 2004, the Group has been implementing its stated business objective in expanding its property investment, development and trading business by acquiring certain Macao property interests at Han Van San Commercial Building for leasing purposes as well as China Plaza, Yuet Lai and Luk Ieong for investment and trading purposes. Save for the car parks, the Group's property interests at Han Van San Commercial Building are currently under renovations. The Group is currently in the course of negotiations with certain potential tenants for the leasing of office premises of Han Van San Commercial Building, but no tenancy agreements have been made yet. The Group has recently entered into sale and purchase agreements with certain independent third parties respectively for the disposals of 3 office units in aggregate of China Plaza. To maximise the return to the Group, and depending on the then market conditions, the Directors intend to dispose all or some of the remaining property interests of China Plaza for capital gain when appropriate opportunities arise, but no sale and purchase agreements have been made in this regard. Furthermore, both Luk Ieong and Yuen Lai had already been disposed of by the Group to independent third parties. In view of the current positive economic conditions in Macao, the promising prospect of the Macao property market and the Group's experience in property market, the Group further expanded its property development, investment and trading business to strengthen its earning potential by acquiring 58% interest in the Site for development and trading purposes through the Acquisition. In light of the strong Macao economy as a result of the relaxation of the free travellers from Mainland China to Hong Kong and Macao and the effect of the Closer Economic Partnership Arrangement, the Directors believe that the Site represents a good investment opportunity and will have a potential for appreciation in value. The Directors consider that the Acquisition represents a further step in achieving the Company's stated business plan and objectives. The Site is currently vacant and the concrete plan for it has yet to be determined among the Purchasers. To maximise the return to the Group, and depending on the then market conditions, the Directors intend that the Site could be developed as residential properties for sales or disposed of for trading gain when appropriate opportunities arise. With the growth potential in the Macao property market and potential appreciation in the value of the Site, the Directors intend to continue maintaining a strong presence in the Macao property market and expect that the Site will have a positive impact on the income base of the Group. General Under the Listing Rules, the Acquisition constitutes a discloseable transaction for the Company. A circular containing, inter alia, further information regarding the details of the Acquisition, will be despatched to the Shareholders as soon as practicable. Other In compliance of Rule 13.09(1) of the Listing Rules, the Directors would like to clarify the information reported in certain articles appeared in Hong Kong Daily News on 21, 24 and 29 December 2004 regarding the disposal of China Plaza and the property interests at Han Van San Commercial Building held by the Group and its 50% owned associated company, respectively and the proposed acquisition by the Company from its ultimate controlling Shareholder, Mr. Or Wai Sheun, interests in an electricity company in Macao and interests in La Baie Du Noble, residential properties in Macao, held by Mr. Or Wai Sheun. The Directors wish to clarify that they are not aware of the source of information on which those articles are based. At present, the Group does not engage in any negotiation with any gaming business group for the acquisition of such property interests or the leasing of such property interest for the conversion of such property interests into hotels with gaming or gaming related activities or the participation in any profit sharing scheme of casino operations in such property interests. Furthermore, the Directors also confirmed that the Group does not currently engage in any negotiation with Mr. Or Wai Sheun to acquire from him interests in such electricity company and residential properties nor does the Company has any present intention to acquire from Mr. Or Wai Sheun such business interests. Definitions In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: