09:47 SINO GOLF HOLD<00361> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. SINO GOLF HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 361) CONNECTED AND DISCLOSABLE TRANSACTION SUMMARY Reference is made to the announcement of the Company dated 28 February 2005 regarding the connected and notifiable transaction of the Company whereby SGMCL entered into the Agreement with the Purchaser for the disposal of the 62.5% of the equity capital of SHL. The board of Directors announces that the parties to the Agreement have entered into a Supplemental Agreement whereby the parties have agreed amongst other things, that, with reference to the Audited Net Asset Value of SHL as at 31 December 2004, the Consideration for the Disposal shall be HK$14,900,000. Reference is made to the announcement of the Company dated 28 February 2005 regarding the connected and notifiable transaction of the Company whereby SGMCL has entered into the Agreement with the Purchaser for the disposal of the 62.5% of the equity capital of SHL. BACKGROUND The Group is principally engaged in the manufacture and trading of golf equipment and accessories and golf bags. SHL, an indirect subsidiary of the Company, is owned as to 62.5% and 37.5% by SGMCL and MI respectively. Pursuant to the Agreement, SGMCL has agreed to sell 62.5% of the equity capital of SHL to the Purchaser. The board of Directors announces that the parties to the Agreement have entered into a Supplemental Agreement whereby the parties have agreed amongst other things, that, with reference to the Audited Net Asset Value of SHL as at 31 December 2004, the Consideration for the Disposal shall be HK$14,900,000. The Audited Net Asset Value of SHL as at 31 December 2004 was HK$19,710,256 and in relation to the 62.5% interest for the Disposal, the attributable Audited Net Asset Value of SHL as at 31 December 2004 was HK$12,318,910, representing a gain of HK$2,581,090. Based on this Consideration and that under Chapter 14 of the Listing Rules, the asset and profit ratios exceed 5% and are below 25% and each of the other applicable ratios is below 5%, the Disposal constitutes a disclosable transaction under the requirements of Chapter 14 of the Listing Rules. As Su Parties are the directors and beneficial owners of the Purchaser and Associates of Su Founder who indirectly holds 37.5% of equity capital of SHL, the Agreement and the Disposal contemplated therein constitute a connected transaction of the Company under Chapter 14A of the Listing Rules. Immediately after the completion of the Agreement. SHL will be owned as to 62.5% and 37.5% by the Purchaser and MI respectively. The Group will then have no shareholding in SHL. The AGREEMENT The terms of the Agreement have been arrived at after arm's length negotiations based on normal commercial terms and are considered by the Directors (including independent non-executive Directors) to be fair and reasonable and on normal commercial terms. The essential terms of the Agreement are summarised as follows: Date: 31 December 2004 Parties: Vendor: SGMCL, an indirectly wholly owned subsidiary of the Company Purchaser: GLOBAL SOURCING AND DISTRIBUTION LIMITED Assets to be disposed of by SGMCL: 62.5% of the equity capital of US$1,380,000 of SHL. Consideration: Pursuant to the Supplemental Agreement, the Consideration for the Disposal shall be HK$14,900,000, which was determined with reference to the Audited Net Asset Value of SHL as at 31 December 2004. The Directors have fulfilled their fiduciary duties by taking into