09:39     BALTRANS HOLD<00562> - Announcement (2)                             

    Information on the Fond Group:                                            
                                                                              
    Fond and Fondair are companies incorporated in Hong Kong on 14th          
    February, 2001 and 9th May, 1996 respectively. The Fond Group is          
    principally engaged in the provision of freight forwarding services       
    between the west coast of the United States of America and Hong Kong.     
                                                                              
    Set out below are the audited consolidated net profits before/after       
    taxation and extraordinary items of the Fond Group for the year ended     
    31st July, 2003 and the unaudited consolidated profits before/after       
    taxation and extraordinary items of the Fond Group for the year ended     
    31st March, 2004:                                                         
                                                                              
    Net profit before                                                         
    taxation and        Year ended                 Year ended                 
    extraordinary items        31st July, 2003                 31st July,     
    2004                                                                      
            HK$                HK$                                            
            (Audited)                (Unaudited)                              
                                                                              
    Fond        8,402,758                11,660,069                           
    Fondair        314,528                457,970                             
                                                                              
                                                                              
    Total        8,717,286                12,118,039                          
                                                                              
                                                                              
    Net profit after                                                          
    taxation and        Year ended                Year ended                  
    extraordinary items         31st July, 2003                31st July,     
    2004                                                                      
            HK$                HK$                                            
            (Audited)                (Unaudited)                              
                                                                              
    Fond        7,583,826                10,805,404                           
    Fondair        1,740,032                451,730                           
                                                                              
                                                                              
    Total        9,323,858                11,257,134                          
                                                                              
                                                                              
    The 90% interests in the Fond Group to be sold by the Vendors had an      
    unaudited net asset value of about HK$10,844,000 as at 31st December,     
    2004.                                                                     
                                                                              
    Based on the HKFRS3, HKAS36 and HKAS38 adopted by the Company and the     
    attributable net book value of the Fond Group at HK$11,814,209 (being     
    88.65%, the Company's attributable interests in the Fond Group, of the    
    total net asset value of the Fond Group) as at 31st January, 2005, the    
    gain on disposal would amount to approximately HK$11,388,337.             
                                                                              
    Consideration:                                                            
                                                                              
    HK$32,444,000 in cash.                                                    
                                                                              
    Basis of the consideration:                                               
                                                                              
    The consideration was arrived at after arm's length negotiations with     
    reference to HK$10,844,000, being 90% of the unaudited net asset value    
    of the Fond Group as at 31st December, 2004, and an agreed goodwill of    
    HK$21,600,000 (which includes an outstanding shortfall payment of         
    HK$8,754,794 due from the Purchasers arising from the Guaranteed Return   
    (the "Shortfall Payment") which will be settled as part of the            
    consideration under the disposal without recourse or any further          
    claims).                                                                  
                                                                              
    The cash consideration after deducting the Shortfall Payment amounts to   
    HK$23,689,206, which represents an implied price earnings ratio of        
    approximately 2.6 times based on HK$9,261,446, being 90% of the average   
    net profit of the Fond Group over the last two financial years, and       
    approximately 118% premium to HK$10,844,000, being 90% of the unaudited   
    net asset value of the Fond Group as at 31st December, 2004.              
                                                                              
    As the Fond Group is a financial investment and not actively managed by   
    the Company's management team, the Company had focused on cash returns    
    from this investment. As a result of the disposal, the Company will       
    achieve a cash-based Internal Rate of Return (IRR) of approximately 17%,  
    taking into account all the cash investment and cash returns (including   
    dividends, the Shortfall Payment and the cash consideration under the     
    subject disposal) effected throughout the investment period.              
                                                                              
    The directors of the Company (including the independent non-executive     
    directors) consider that the terms of disposal are fair and reasonable    
    and in the interest of the shareholders as a whole.