09:52     MAINLAND HOLD<01100> - Announcement (3)                             

                                                                              
    The transfer of interest in Futureview by one joint venture party         
    is subject to the other party's consent and pre-emptive right.            
                                                                              
    Board composition                                                         
                                                                              
    The board of Futureview will consist of five directors, three             
    of whom will be representatives of the Company and two of whom            
    will be representatives of PPW. The chairman of the board will            
    be nominated by the Company.                                              
                                                                              
    INFORMATION ON PPW AND THE LICENSE                                        
                                                                              
    PPW, through its subsidiaries, engages in promotional marketing           
    business and the manufacturing of toys and promotional items.             
    It has through its wholly-owned subsidiary, PPGL, obtained the            
    Licence from Sanrio to act as an exclusive authority agent of             
    shops in the PRC which emphasizes the brand image of Sanrio.              
    These shops sell products including items planned and sold by             
    Sanrio itself, other Sanrio design products, and locally                  
    developed products under other licences to be granted by Sanrio.          
    Under the Licence, Futureview has the right to open new retail            
    shops in the PRC which sells Sanrio design products or it may             
    sell Sanrio design products as a wholesaler.                              
                                                                              
    The Licence is for a term up to 31st March 2011. Under the Licence,       
    PPGL has the right to use certain licensed materials on                   
    storefronts or advertising and promotion that are directly                
    related to the support of stores subject to Sanrio's prior                
    written approval. These licensed materials include all designs,           
    trade names, trademarks, service marks, logos and emblem used             
    to identify the stores and include translations of "Sanrio Store",        
    "Sanrio Present", "Sanrio Gift Gate", "Hello Kitty Store" and             
    "Hello Kitty Present". Royalty payments are also payable to               
    Sanrio annually in accordance with the terms of the Licence.              
                                                                              
    Before the completion of the Subscription Agreement, PPGL has             
    agreed to assign to Futureview or its subsidiaries, its rights            
    and obligations under the Licence and transfer to Futureview              
    or its subsidiaries the net assets acquired for the purpose of            
    performing its obligations under the Licence up to the Completion.        
    The consideration for Assignment and the net assets transferred           
    is HK$2,700,000 subject to adjustments in order to reflect the            
    cost of the Licence up to Completion, which will be sourced from          
    the amount of the Subscription. Sanrio has given its consent              
    in respect of the Assignment. In consideration of such consent,           
    PPGL and the Company has agreed to provide several guarantee              
    in the proportion of 49% and 51% in favour of Sanrio in respect           
    of any moneys due by PPGL to Sanrio under the Licence.                    
                                                                              
    INFORMATION ON THE GROUP AND REASONS FOR THE SUBSCRIPTION                 
                                                                              
    The Company, through its subsidiaries, engages in the                     
    manufacture and sale of headwear products. In February 2004,              
    the Group signed a license agreement with HatWorld Inc., a                
    leading retailer of headwear in the U.S., to operate headwear             
    outlets in Hong Kong and the PRC under the LIDS store brand,              
    marking the Group's first stride of diversification into retail           
    business. Riding on the retail platform built for the LIDS                
    operations, the Subscription will enable the Group to further             
    expand its retail business from retailing of headwear to other            
    licensed products, which will provide new income streams for              
    the Group.                                                                
                                                                              
    The board of directors (including the independent non-executive           
    directors) are of the view that the terms of the Subscription             
    Agreement and the Shareholders'