09:59 COMPASS PACIFIC<01188>-Announcement&Resumption of Trading-9 the unaudited financial statements of Ningbo Phoenix as the holding companies of Ningbo Phoenix are mere holding companies and have no other operations. According to the unaudited consolidated accounts of Ningbo Phoenix for the two years ended 31 December 2004, it has (i) a consolidated net asset of RMB$129 million and RMB$141 million (equivalent to approximately HK$122 million and HK$133 million respectively); (ii) a consolidated profit before tax and before minority interests of RMB$1.3 million and RMB$33.2 million (equivalent to approximately HK$1.2 million and HK$31.1 million); and (iii) a consolidated profit/(loss) after tax and before minority interests of RMB$(1.7) million and RMB$22.5 million (equivalent to approximately HK$(1.6) million and HK$21.2 million) respectively. The audited accounts for two years ended 31 December 2004 of each member of the APG Group incorporated in the PRC were prepared in accordance with the PRC accounting standards and neither APG nor Ningbo Phoenix has prepared any audited consolidated financial statements for the past years. Below is the unaudited consolidated income statements of Ningbo Phoenix for the year ended 31 December, 2004 2003 RMB'000 RMB'000 Turnover 1,118,021 258,527 Cost of Sale 1,060,556 242,023 Gross Profit 57,465 16,504 Other Revenue 23,041 4,565 Selling Expenses 21,547 3,181 Administrative Expenses 24,113 16,451 Finance Expenses 1,662 162 Profit/(Loss) for the Year 33,184 1,275 (Before taxation and minority interests) Profit/(Loss) for the Year 22,482 (1,664 ) (After taxation but before minority interests) REASONS FOR THE 1ST ACQUISITION AND THE 2ND ACQUISITION The principal activities of the Group are the operation of indoor family entertainment game centers and manufacturing and selling automobile axles in the PRC. The performance of these businesses has not been satisfactory in recent years. The Directors consider that this is a substantial room for growth in the dealership of passenger cars in the PRC. With the reduction of car import duty under WTO commitments and more foreign manufacturers are setting up manufacturing facilities in China, the selection available to the Chinese consumers is expected to increase in the next few years. Coupled with the increase in income level, the demand for passenger cars and car ownership are expected to continue to rise. The Directors noted that a sizeable car dealership such as the APG Group (which operates in major cities and across provinces) is well positioned to become one of the market leaders in this field. The Group has been engaged in the business of manufacturing automotive parts for several years. The senior management, in particular, the Chairman, Mr. Yeung Yung has considerable experience and expertise in the automotive industry in the PRC. The Acquisitions would enable the Company to have a foothold in car dealership business in the PRC which the Board intends to further expand and to negotiate distributorship of other quality brands of automobiles. The Group hopes to achieve synergy and economies of scale to strengthen bargaining power with car manufacturers on better pricing and delivery timetable. With increase in business activities, as such could enhance the business activities in cars repair and maintenances. The Acquisitions will also help to diversify the existing businesses of the Group. BOARD OF DIRECTORS None of Vendors indicates that he/she/it has intention to nominate any representation on the Board. GENERAL