10:24     PACIFIC ANDES<01174> - Announcement & Resumption (8)                

    The subscription of the Subscription Shares per se                        
    does not constitute a connected transaction or a                          
    notifiable transaction under the Listing Rules.                           
                                                                              
    REASONS FOR THE ENTERING INTO OF THE AGREEMENTS                           
    Although Kyoshoku was loss-making as at 31 March 2004,                    
    the Directors believe that the investment of a                            
    controlling interest in Kyoshoku will complement the                      
    existing businesses and development plans of the                          
    Group as discussed below:                                                 
                                                                              
    1.      Total sales of the Group for the year ended 31 March              
    2004 was HK$4.4 billion, of which sales to the                            
    Japanese market was HK$146 million, constituting 3.3%                     
    of the Group's total sales for that period. Prior to                      
    this investment, the Group sold to the Japanese market                    
    through Japanese importers. After this investment,                        
    the Group can sell its products through Kyoshoku to                       
    consumers in Japan directly. The Directors believe                        
    that this investment will provide the Group with an                       
    opportunity to increase its sales to the Japanese                         
    market.                                                                   
                                                                              
    2.      Kyoshoku owns three processing plants in Japan,                   
    processing seasoned, pickled, smoked and salted fish                      
    fillets and seafood product and it supplies these to                      
    the domestic Japanese market. The Directors believe                       
    that Kyoshoku can produce certain less time-sensitive                     
    branded retail products from the production                               
    facilities of the Group in the PRC at competitive                         
    costs.                                                                    
                                                                              
    3.      Kyoshoku has an established direct sourcing                       
    network for frozen seafood products produced in Japan                     
    Sea. This investment will therefore enable the Group                      
    to source raw materials directly from source without                      
    buying through the exporters in Japan.                                    
                                                                              
    Whilst Kyoshoku recorded audited net liabilities as                       
    at 31 March 2004, it is expected that the financial                       
    position of Kyoshoku will improve on Completion                           
    following the issue and allotment of the Subscription                     
    Shares, the Kyoshoku Common Shares and the Kyoshoku                       
    Preferred Shares.                                                         
                                                                              
    In light of the above, the Board believes that the                        
    terms of the Agreements are fair and reasonable and                       
    in the interest of the Company and its Shareholders                       
    as a whole.                                                               
                                                                              
    Set out below are Kyoshoku's existing common                              
    shareholding structure and its common shareholding                        
    structure immediately after Completion.                                   
                                                                              
    Before: After:                                                            
                                                                              
                                                                              
    Note*:  KILLP is an investment limited partnership                        
    incorporated in Japan. SPIA is the sole unlimited                         
    partner of KILLP and is a subsidiary of Sanyo Electric                    
    Co., Ltd., a company whose shares are listed on the                       
    Tokyo Stock Exchange of Japan. SPIA is principally                        
    engaged in providing investment advisory services,                        
    including the management of KILLP. KILLP is owned by                      
    an investment fund established in Japan, which is in                      
    turn owned by private investors.                                          
                                                                              
    Set out below are Kyoshoku's capital structure                            
    immediately after Completion:                                             
                                                                              
    PAIH (BVI)      KILLP