09:36     WO KEE HONG<00720> - Announcement (4)                               

    Completion                                                                
                                                                              
    Upon payment of the Settlement Amount in full on each of the              
    Settlement Dates and the satisfaction of the Conditions                   
    Precedent, MHI shall release the Company and WKHL from their              
    respective obligations under the Loan Agreement.                          
                                                                              
    In the event (i) the Company and/or WKHL fails to pay the                 
    Settlement Amount on any of the Settlement Date; or (ii) any              
    of the Conditions Precedent is not fulfilled on the dates set             
    out in the paragraph headed "The Settlement - The Conditions              
    Precedent" above; or (iii) the payment of the Settlement Amount           
    is set aside or avoided as a result of any act or omission on             
    the part of the Company and/or WKHL or by operation of the law            
    or regulation, then the liabilities of the Company and WKHL under         
    the Loan Agreement shall continue as if the Deed of Settlement            
    has never been entered into by the parties.                               
                                                                              
    The Deeds of Amendment                                                    
                                                                              
    On 24 February 2005                                                       
                                                                              
    (a)     MHI, Stoneycroft, WKHL and the Company entered into the Deed      
    of Amendment A in relation to the Deed of Charge A in respect             
    of Property A; and                                                        
                                                                              
    (b)     MHI, Ever Rising, WKHL and the Company entered into the Deed      
    of Amendment B in relation to the Deed of Charge B in respect             
    of Property B.                                                            
                                                                              
    The purpose of the Deeds of Amendment is to amend the Deeds of            
    Charge to extend the security over the Properties created by              
    the Deeds of Charge for the performance of the Deed of the                
    Settlement and for a period of not less than six months after             
    the payment of the Settlement Amount and fulfilling of the                
    Conditions Precedent in accordance with the Deed of Settlement            
    by the Company and WKHL and the observance of the warranties              
    and undertaking contained in the Deed of Settlement by the                
    Company and WKHL. The period was agreed upon after negotiation            
    between the Company and MHI. Based on the experience of the               
    Directors, the Directors are of the view that it is not uncommon          
    for a lender to hold onto the securities for securing the loan            
    for a period of time after full payment of the indebtedness due           
    to the lender. Accordingly, the Directors consider the period             
    provided for in the Deeds of Amendment as acceptable.                     
                                                                              
    Upon full performance of the Deed of Settlement by the Company            
    and WKHL, MHI shall upon the request of Stoneycroft and Ever              
    Rising discharge the charge over the Properties created by the            
    Deeds of Charge in accordance with the terms thereof.                     
                                                                              
    EFFECT OF THE SETTLEMENT                                                  
                                                                              
    The principal businesses of the Group are importing, marketing            
    and distribution of air-conditioning and refrigeration products;          
    audio-visual equipment; car audio and electronic products; motor          
    vehicles and car accessories; and other electronic and                    
    electrical products.                                                      
                                                                              
    The audited consolidated net asset value of the Group as at 31            
    December 2002 and 2003 and the audited consolidated profit/(loss)         
    of the Group before and after taxation for the two years ended            
    31 December 2003 are:                                                     
                                                                              
            As at 31 December 2002/         As at 31 December 2003/           
            For the year ended              For the year ended                
            31 December 2002                 31 December 2003                 
            (HK$)                            (HK$)