09:48     INTERCHINA HOLD<00202> - Announcement (2)                           

    (c)     the balance of HK$67,000,000 shall be payable by the Purchaser    
    to the Company within 12 months after the date of the Disposal            
    Agreement.                                                                
                                                                              
    The consideration of the Disposal was determined after arm's              
    length negotiations between the Company and the Purchaser after           
    taking into account the unaudited consolidated net asset value            
    of the Money Capture Group as at 31 March 2005. The Directors             
    consider that the terms of the Disposal are fair and reasonable           
    and are on normal commercial terms and in the interests of the            
    Company and the Shareholders as a whole.                                  
                                                                              
    Completion                                                                
                                                                              
    Completion took place immediately after the signing of the                
    Disposal Agreement.                                                       
                                                                              
    INFORMATION ON THE MONEY CAPTURE GROUP                                    
                                                                              
    Money Capture is an investment holding company and its principal          
    asset is its interests in the Property, which is held as an               
    investment property by Equal Smart. The other subsidiary of Money         
    Capture is Shanghai Interchina Club Company Limited (*) which is a        
    limited liability company established in the PRC for the purpose          
    of making financial arrangements for the Money Capture Group and in       
    particular, the Property. The principal activity of the Money             
    Capture Group is property investment, i.e., the Property.                 
                                                                              
    The unaudited consolidated net asset value of the Money Capture           
    Group as at 31 March 2005 was approximately HK$228,000,000 and            
    the unaudited consolidated net asset value of the Money Capture           
    Group attributable to the disposed interest in Money Capture              
    pursuant to the Disposal Agreement as at 31 March 2005 was                
    approximately HK$136,800,000. As at 31 March 2005, the                    
    shareholders' loan of Money Capture, amounting to approximately           
    HK$220,000,000, was waived by the Company. As the consideration           
    of the Disposal was based on the net tangible asset of Money              
    Capture, the waiver of the shareholders' loan was to facilitate           
    the Disposal. The unaudited consolidated net liabilities of the           
    Money Capture Group were approximately HK$3,000,000 as at                 
    31 March 2004. The unaudited consolidated net profit of the Money         
    Capture Group (both before and after taxation) was approximately          
    HK$10,886,000 and HK$11,000,000 for the two years ended                   
    31 March 2004 and 31 March 2005, respectively.                            
                                                                              
    REASONS FOR THE DISPOSAL                                                  
                                                                              
    The Group is principally engaged in the investment in                     
    environmental and water treatment operation and city development          
    and investment operation as well as strategic investment in Hong          
    Kong and the PRC.                                                         
                                                                              
    The Group's current corporate strategy is to focus on its                 
    principal activities of environmental and water treatment                 
    operations as well as city development and investment operations.         
    After arm's negotiation between the Company and the Purchaser,            
    the Company agreed to sell the 60% controlling stake in Money             
    Capture at the request of the Purchaser. Accordingly, the                 
    Directors consider it appropriate to dispose of a majority stake          
    in the Money Capture Group in order to concentrate its resources          
    on the core operations of the Group.                                      
                                                                              
    FINANCIAL EFFECT OF THE DISPOSAL                                          
                                                                              
    Upon Completion, Money Capture is no longer being treated as              
    a subsidiary of the Company and will be accounted for as an               
    associated company of the Group.