09:53 CS CONSERVAT P<00351>-Announcement&Resumption of Trading (4) being. Profit and loss sharing ratio: Profit and loss of the Meizhou JV will be shared by Sino Profit and New Rise in the proportion of 80% and 20%, respectively, in proportion to their respective equity interest. Board representation: The Meizhou JV will comprise not less than 7 directors, out of which 5 will be appointed by Sino Profit and 2 will be nominated by New Rise. The chairman of the board of directors of the Meizhou JV will be a director nominated by Sino Profit. Scope of business: The Meizhou JV will construct the Incinerator with the total investment amounting to RMB233.70 million (equivalent to approximately HK$220.47 million) to carry out waste incineration and processing business in Xingning City, Meizhou, the People's Republic of China. The formation of the Meizhou JV is subject to approval by the relevant PRC authorities. In the event that the relevant approval cannot be obtained by 31 December 2005, or such later day as may be agreed between the parties, any one party can terminate the Co-Operative Agreement without further liability to the other party. Assuming that the S&P Agreement can be completed, the Meizhou JV will become a 80% owned indirect subsidiary of the Company upon formation and its financial statements will be consolidated with that of the Company. The Company intends to finance the registered capital of the Meizhou JV, payable by Sino Profit, from the net proceeds of the Placing. Reasons for the Acquisition The principal businesses of the Group are computer hardware and provision of maintenance support services, software design and development. The Company is committed to diversifying its existing business into waste incineration and processing business in the PRC. As stated in the interim report of the Group for the six months ended 30 June 2004, the Group will go on exploring other investment opportunities which may include waste incineration and processing business as in the PRC since the Board view this as a unique business with vast market potential. Further to the setting up of a joint venture in Guilin, the PRC to carry on waste incineration and processing business as detailed in the Company's circular dated 6 October 2004, the acquisition of 39% equity interest in a joint venture in Dongguan, the PRC (the "Dongguan JV") as detailed in the Company's circular dated 22 December 2004, and the proposed acquisition of a further 51% equity interest in the Dongguan JV as detailed in the Company's announcement dated 12 April 2005, the Board considers that the Acquisition is a step forward to develop the Group's interest in waste incineration and processing business in the PRC and is consistent with the Group's aforesaid current investment strategy. In view of the continued economic growth in the PRC which creates strong demand for power, the volatile crude oil price and the unstable international oil supply, the Board considers that waste incineration and processing business for generating electricity in the PRC has a promising future with potential high returns and thus the Meizhou JV could provide ample future growth opportunities for the Group. The Board considers that the terms of the S&P Agreement are fair and reasonable and is in the interest of the Company and the Shareholders as a whole. GENERAL The S&P Agreement comprising the provision of the Loan, together with the future financial commitment of Sino Profit in the Meizhou JV upon completion of the S&P Agreement, constitute a major transaction for the Company under the Listing Rules which is subject to approval by the Shareholders. Both Ms. Tin and Mr. Chan have indicated that they will abstain from voting in the EGM. The relevant circular and the notice of the EGM will be despatched to the Shareholders as soon as practicable. RESUMPTION OF TRADING Trading in the Shares has been suspended since 9:30 a.m. on 20 April 2005 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for resumption of trading of the Shares with effect from 9:30 a.m. on 22 April 2005. DEFINITIONS