09:41     KINGBOARD CHEM<00148> - Announcement (6)                            

    year ended 30 June 2004, a decrease of 3.6%.                              
                                                                              
    Employees of the E&E Group                                                
                                                                              
    At 30 June 2004, the E&E Group had approximately                          
    14,600 employees (30 June 2003: 10,400). The E&E Group                    
    continued to offer competitive remuneration packages                      
    in line with the industry practice. Employee benefits                     
    such as insurance, medical scheme, year-end bonus,                        
    discretionary bonus, share option scheme were also                        
    granted to certain eligible staff. The E&E Group has                      
    strengthened internal staff communication and                             
    upgraded of management skill by organising regular                        
    communication meetings, training, top management                          
    forum and by publishing of corporate newsletter.                          
                                                                              
    The E&E Group's asset                                                     
                                                                              
    The ongoing replacement of machinery and the                              
    increased capacity to cope with increase in turnover                      
    has given rise to the increase in investment in                           
    machinery.                                                                
                                                                              
    The E&E Group had an addition of fixed assets of                          
    approximately HK$731.1 million during the year ended                      
    30 June 2004 (2003: HK$195.5 million). The E&E Group                      
    will continue to expand its production capacity and                       
    look for new investment opportunities. These will be                      
    financed by internally generated cash flows and                           
    banking facilities.                                                       
                                                                              
    The E&E Group's assets are free from charge.                              
                                                                              
    Gearing ratio of the E&E Group                                            
                                                                              
    At 30 June 2004, the E&E Group's gearing ratio                            
    calculated as the net bank borrowings (total bank                         
    borrowings net of cash) over shareholders equity and                      
    minority interest was approximately 44.4% (2003:                          
    36.3%).                                                                   
                                                                              
    The E&E Group's Foreign exchange fluctuation                              
    exposures and hedges                                                      
                                                                              
    The revenue of the E&E Group were mainly denominated                      
    in US dollars. The trade payables were mainly                             
    denominated in US dollars, Hong Kong dollars and                          
    Renminbi. The trade payables denominated in Japanese                      
    Yen ("JPY") were hedged by entering forward exchange                      
    contracts. At 30 June 2004, total Japanese forward                        
    exchange contract outstanding were approximately                          
    JPY228.1 million (30 June 2003: JPY94.8 million).                         
                                                                              
    Contingent liabilities of the E&E Group                                   
                                                                              
    The E&E Group had no material contingent liabilities                      
    as at 30 June 2004.                                                       
                                                                              
    E&E had contingent liabilities of unlimited                               
    guarantees given to banks in connection with                              
    facilities granted to subsidiaries. As at 30 June 2004,                   
    the banking facilities were utilised by the                               
    subsidiaries to the extent of approximately                               
    HK$396,545,000 (2003: HK$411,000,000).                                    
                                                                              
    5.      THE STATEMENT AS TO THE FINANCIAL AND TRADING                     
    PROSPECTS OF THE E&E GROUP FOR THE CURRENT FINANCIAL                      
    YEAR PURSUANT TO APPENDIX 1B(29)(1)(b) OF THE LISTING                     
    RULES                                                                     
                                                                              
    PCBs                                                                      
                                                                              
    With positive growth in the global PCB demand,