10:34 PEARL ORIENTAL<00600>-Announcement&Resumption of Trading (5) 40% by Mr. Chan and his associates, pursuant to which Sunny Tourist is responsible for marketing and promotion of the gaming casino but not the operations of the gaming casino. In consideration of services provided by it, Sunny Tourist is entitled to 40% of the gross profit of the gaming casino payable by SJM to Golden Dragon as stipulated in the agreement between SJM and Golden Dragon. Under the marketing agreement, Sunny Tourist will pay the Hotel an annual rental fee, however the amount of such rental fee is still under negotiation as at the date of this announcement. Sunny Tourist was incorporated in July 2004 and has no operations other than the abovementioned marketing agreement. Any dividends payable by Sunny Tourist will be distributed to its shareholders in proportion of their respective shareholdings. Given that Sunny Tourist is beneficially owned as to 60% by Golden Dragon and 40% by Mr. Chan, 40% of the rental fee payable by Sunny Tourist to the Hotel will be borne by Mr. Chan. The Directors consider the abovementioned marketing agreement will provide the Hotel with a stable rental income irrespective of the gross profits contribution from the gaming casino. It is also in the benefit of Golden Dragon as the Hotel is wholly-owned by Golden Dragon. In addition to the gaming industry, Mr. Chan has extensive experience in property investment, tourism and retailing businesses. The Directors believe Mr. Chan and his associates' established network and extensive experience in casino VIP room operations in Macau for many years will be of great benefit to the operation of the gaming casino in the Hotel. SHAREHOLDING STRUCTURE OF GOLDEN DRAGON IMMEDIATELY AFTER COMPLETION Company 100% Trustmove U Wa Hang Fok Pearl Oriental Macau Limited 19.2% 34.8% 6.0% 40.0% Golden Dragon Company REASONS FOR THE ACQUISITION The Company is an investment holding company and its subsidiaries are principally engaged in (i) manufacturing and distribution of leather products; and (ii) healthcare and medical-related business. As mentioned in the press announcements of the Company dated 8 November 2004 and 12 November 2004, respectively, the Group was in preliminary discussions with certain independent third parties relating to possible participations in certain hotel-related projects in Macau and Hong Kong. For that reason, the Company established the Purchaser to pursue those opportunities in Macau. The Purchaser is an investment holding company for investment projects in Macau. As stated in the announcement of the Company dated 22 December 2004, the Company carried out the Placing raising net proceeds of approximately HK$62.7 million mainly in preparation for future investment purposes in hotel and casino-related gaming businesses in Macau. HK$50 million of the proceeds from the Placing will be used for the Acquisition and the remaining HK$12.7 million will be used as general working capital. Given that Macau has recorded a gross domestic products growth of over 40% recently, the Directors believe that the tourist and gaming industry in Macau will continue to grow rapidly in the coming years. Since the Hotel has come into operations on 5 January 2005, subject to Completion, the Directors believe that the Acquisition will begin to generate income for the Group immediately from the date of the Agreement. At the date of this announcement, the Vendors are unable to provide the Purchaser with any financial information of Golden Dragon prior to 5 March 2004, the date on which the Vendors acquired Golden Dragon. Accordingly, as a condition precedent to the Agreement, the Purchaser will conduct financial due diligence on Golden Dragon including those prior to 5 March 2004. A summary of the unaudited consolidated results of Golden Dragon for period from 6 March 2004 to 31 November 2004 and its net asset value as at 31 November 2004 are set out below: For the period from 5 March 2004 to 30 November 2004 unaudited MOP'million Turnover 0.00 Loss before taxation and minority interest (13.15 ) Loss after taxation and minority interest (13.14 ) As at 30 November 2004