09:10 HERITAGE INT'L<00412>-Announcement&Resumption of Trading(5) Found Macau has not conducted any business or made any profits or incurred any losses from its date of incorporation on 1st October, 2004 to the date of this announcement, save that based on the management accounts of Found Macau for the period from incorporation to 31st December, 2004, it has incurred a net loss of approximately HK$81,900 being incorporation, set up and related expenses. As Found Macau incurred a net loss in that period, no taxes are payable. The Founders The Founders possess substantial experience in managing casino, hotel, entertainment and casino related business in Macau. Mr. Lao Hin Chun , aged 64 has over 40 years of experience in the property development, construction and building material and garment related businesses. Mr. Lao is the Administrador of Companhia De Betao Pronto Lda. Mr. Lao is also very active in participating and supporting charitable social activities in Macau and is currently the Presidente of Fundo De Beneficencia Dos Leitoresdo Jornal Ou Mun and a Membro Permanentes of Associacao Comercial De Macau. Moreover, Mr. Lao is also the Membro Do Comite Nacional Da Conferencia Consultiva Politica Da Republica Popular Da China. Mr. Filipe Lau , aged 61 has over 30 years of experience in providing advice and project management services to several enterprises engaged in property development, operation of casinos, hotels, restaurants and entertainment related businesses in Macau. Mr. Lourenco Cheong, aged 40 has over 15 years of experience in promoting business opportunities and prospects in Macau to international investors as well as helping businessmen in Macau to invest aboard and/or expand their products and businesses overseas. Mr. Cheong was the Executive Director of Macau Trade And Investment Promotion Institute and is the Managing Director of Belor Company Limited and was involved in providing consultancy services to (i) international investors investing in Macau; and (ii) Macau enterprises in seeking joint venture partners and/or expanding their businesses overseas. To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, save and except for Mr. Lao (stepfather of Mr. Ong), the Founders are not Connected Persons of the Company and are otherwise independent of the Company and Connected Persons of the Company. The Group is principally engaged in investment holding. The principal activities of the Group include investment in casino services and gaming business, property investment, investment in securities and money lending business. Rightmind is a wholly-owned subsidiary of the Company that was established specifically for the investment in Found Macau. REASONS FOR THE TRANSACTION The acquisition price of US$20 for the 20 FM Shares is based on the par value of US$1 per FM Share. Found Macau's intention is to raise HK$500 million in the form of shareholders loans. The provision of the Found Macau Loan of HK$100 million by Rightmind is based on Rightmind's shareholding interest of 20% in Found Macau upon approval of the FM Transactions. The Company is of the view that terms of the Found Macau Transactions are a good opportunity for the Company to invest in Found Macau, which now is close (subject to contract) to agreeing formally the acquisition of previously identified investment targets and new investment targets. The Company is of the view that the investment in Found Macau will be beneficial for the Group as the Group can leverage on the prominent social network of the Founders and the financial strength of the other Found Macau Shareholders to capture the growth opportunities in Macau. The Directors are of the view that the term of the FM Transactions are fair and reasonable and in the interests of shareholders as a whole. Mr. Ong abstained from voting at the board meeting on the FM Transactions. The independent non-executive directors will form a view on the FM Transactions once they have reviewed the opinion of the independent financial adviser. IMPLICATIONS UNDER THE LISTING RULES The Group will through its wholly-owned subsidiary, Rightmind, hold a 20% equity stake in Found Macau after completion of the FM Acquisition but Found Macau will not become a subsidiary of the Company as a result of the FM Acquisition. Found Macau has not commenced business yet and as at the date of this Announcement not involved in the operation of any casino and entertainment business. Found Macau will be accounted for as an investment of the Company. No licence is required in Hong Kong for the operation of the casino and entertainment business in Macau if the casino and entertainment operations are conducted exclusively offshore. The Company will use its best endeavours (insofar as it is able in its capacity as a shareholder in Found Macau to do so) to ensure that for as long as the Company has a direct or indirect interest in the Found Macau, the casino and entertainment business carried out by Found Macau will comply with the applicable laws in the areas where such activities operate and will not contravene the Gambling Ordinance (Cap 148 of