10:28 UPBEST GROUP<00335> - Announcement (3) According to the Agreement, completion of the transaction will be conditional upon several conditions which inter alia the following more important ones (included but not limited to): (i) the granting of an approval of the Scheme by a majority in number representing three-fourths in value of the Scheme creditors; (ii) the granting of an order by the Court sanctioning the Scheme pursuant to section 166(2) of the Companies Ordinance; (iii) the dismissal or withdrawal of all outstanding litigations and winding-up petitions against GFF; (iv) no material adverse change since the date of the Agreement up to completion; (v) GFF having satisfied all requirements of the Stock Exchange regarding the transactions as contemplated under the Agreement and the Scheme (if applicable); and (vi) In the event that any of these conditions is not fulfilled or waived by Upbest Finance (as the case may be) on or before 30th April 2005, the Agreement shall terminate with immediate effect. Court Meeting The Court approved a Court Meeting of GFF on 27 January 2005 for the purpose of considering and approving the Scheme proposed to be made between GFF and the Scheme creditors under s166 of the Companies Ordinance. In addition, it is ordered that at least 21 days before the day appointed for the meeting, a notice of the meeting be published once in English in the South China Morning Post and once in Chinese in the Hong Kong Economic Journal. Implication under the Listing Rules: The Acquisition constitutes a disclosable transaction for the Company under Chapter 14 of the Listing Rules. A circular in connection with the acquisition of the Acquisition will be dispatched to the shareholders of the Company as soon as practicable. REASONS FOR ENTERING INTO THE ACQUISITIONS The principal activity of the Company is investment holding. Its subsidiaries are principally engaged in securities broking, futures broking, securities margin financing, money lending, corporate finance advisory and asset management. The Scheme will, if implemented, result in the full discharge of the Scheme debts owed to the Scheme creditors and the Scheme creditors will be barred from taking any action against GFF in respect of the Scheme debts. This will prevent any future claim against GFF in respect of the Scheme debts. GFF has confirmed under the Agreement that other than the Scheme debts, GFF does not have any other creditors nor does it have any other indebtedness. As such, all the outstanding debt liabilities of GFF will be settled upon completion of the Scheme whilst the major net asset of GFF would comprise loans receivable with an aggregate book value of approximately HK$110 million according to the unaudited management accounts for the year ended 31 March 2004. The Company considers it of great investment value and commercial benefit to acquire GFF as such loans receivable would generate stable and long term (up to 25 years) interest income to the Group. In this connection, please also note that GFF has undertaken to give full effect to the Scheme and apply the subscription monies for distribution amongst the Scheme creditors under the Scheme upon completion. The Board believes that the Acquisition present an excellent opportunity for the Group to strengthen its financing business and loan portfolio. The Board considers that the Acquisition is on normal commercial terms and that such terms are fair and reasonable to the Company and Shareholders as a whole.