09:16 MAN YUE INT'L<00894> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. MAN YUE INTERNATIONAL HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 0894) CONNECTED TRANSACTION Financial Adviser to Man Yue International Holdings Limited ASIAN CAPITAL (CORPORATE FINANCE) LIMITED On 30 December 2004, Johnstone International and the JV Partner entered into a Sale and Purchase Agreement pursuant to which Johnstone International agreed to purchase and the JV Partner agreed to sell 18.33% interest in Wuxi Heli for a consideration of RMB8,959,700 (approximately HK$8,452,547). The Acquisition has been completed on 31 December 2004. At the time of the transaction, Wuxi Heli was an 81.67%-owned subsidiary of the Company and the JV Partner was a substantial shareholder of Wuxi Heli, which was a connected person as defined under the Listing Rules. Accordingly, the Acquisition constituted a connected transaction of the Company under the Listing Rules. The connected transaction falls within 14A.32 of the Listing Rules and the Company is exempt from independent shareholder's approval requirement. Details of the transaction will be included in the next published annual report and accounts of the Company pursuant to Rule 14A.45 of the Listing Rules. The Directors (including the independent non-executive Directors) are of the view that as far as the shareholders of the Company are concerned, the connected transaction is fair and reasonable and in the best interests of the Company and its shareholders as a whole. THE SALE AND PURCHASE AGREEMENT Date of the Sale: 30 December 2004 and Purchase Agreement The Purchaser: Johnstone International The Vendor: The JV Partner Pursuant to the Sale and Purchase Agreement, Johnstone International, a wholly-owned subsidiary of the Company has agreed to acquire from the JV Partner its 18.33% interest in Wuxi Heli. Upon completion of the Acquisition which has taken place on 31 December 2004, Wuxi Heli has become a wholly-owned subsidiary of the Company. The Consideration paid by Johnstone International pursuant to the Sale and Purchase Agreement was RMB8,959,700 (approximately HK$8,452,547). The JV Partner is a state-owned enterprise and accordingly its 18.33% interest in Wuxi Heli was a state-owned asset. Johnstone International understood from the JV Partner that an auction process was necessary pursuant to the PRC regulations. Following the listing of the intended sale of this parcel of shares by # , an auction platform set up by the state-owned assets administration commission of the Jiang Su province, there were no other bidding offers for the auction period from 6 December 2004 to 30 December 2004 and Johnstone International, pursuant to its right of first refusal, acquired the 18.33% interest in Wuxi Hei at the reference price of RMB8,959,700 provided by#. The reference price was made by the JV Partner based on the net assets value of Wuxi Heli of approximately RMB48,880,100 as at 31 March 2004, based on the valuation report prepared by its auditor. The Consideration has been funded by internal resources of the Group in cash.