10:39 MOULIN<00389> - Announcement (3) Group are not yet fully integrated. In relation to the errors in accounting treatment, the Company will discuss with CCIF with a view to making appropriate accounting adjustments. In response to the comment on internal control and as recommended in CCIF's report as mentioned below, the Company will set up an independent team with experience in reviewing financial reporting and compliance systems, procedures and controls to review the internal control systems of the Group. DTT also raised questions on the authenticity of 12 sets of supporting documentation ("Sample Shipping Documents") which they had requested for sampling purposes relating to certain sales transactions to overseas distributors. The original records of the Sample Shipping Documents were misplaced and could not be located. They related to approximately HK$12 million of sales, which represented approximately 1% and 0.5% of the Company's audited consolidated sales and current assets for 2003 respectively. As at March 31, 2005, sales relating to 10 out of the 12 sets of Sample Shipping Documents amounting to approximately HK$10 million had already been settled. The aggregate amount of all receivables involving the abovementioned overseas distributors was approximately HK$249 million as at December 31, 2004. As at March 31, 2005, the aggregate amount of all the receivables relating to those distributors was reduced to approximately HK$170 million due to settlement after December 31, 2004. The Company also wishes to emphasise that the Sample Shipping Documents, although reproduced, related to genuine transactions. The Company has engaged CCIF to conduct an independent investigation on the Sample Shipping Documents. CCIF has relevant experience in conducting similar investigations relating to companies listed in Hong Kong with operations in the People's Republic of China. According to CCIF's interim written report to the Company dated April 19, 2005, the Sample Shipping Documents were inappropriately reproduced by a junior staff member employed by one of the Group's sub-contractors in Chaoyang, the People's Republic of China. In order to save office space and costs in Hong Kong, it has been the Group's practice to store supporting documents of certain sales transactions, including purchase orders, sales confirmation and shipping documents, at the premises of this sub-contractor (which also provides data processing services to the Group). According to CCIF's report, the individual concerned reproduced the Sample Shipping Documents when urged to provide the documents as he could not locate them in time for delivery to the Company in Hong Kong. CCIF indicated that this was an isolated incident and no staff or senior management of the Company was involved or implicated in the incident. CCIF also reported that there was nothing to suggest that the financial systems of the Company are not intact, although there were weaknesses in the internal control systems of the Group and suggested that an independent team comprising external professionals be appointed by the Company to carry out a thorough study to rectify the weaknesses. As recommended in CCIF's report and in response to DTT's concern regarding whether the Group has proper internal controls, the Company will set up an independent team with experience in reviewing financial reporting and compliance systems, procedures and controls to review the internal control systems of the Group and will make a further announcement upon finalization of the review. The Board confirms that, apart from the disclosure made in this announcement, there are no other circumstances in respect of the proposed change of auditors which it considers should be brought to the attention of the Shareholders or creditors of the Company. The matters disclosed in this announcement are the only material concerns raised by DTT during their audit. A circular containing the notice of the SGM and details of DTT's resignation and the proposed appointment of CCIF as the new auditors will be sent to the Shareholders as soon as reasonably practicable. DEFINITIONS In this announcement, the following expressions have the following meanings, unless the context requires otherwise: "Board" the board of Directors "CCIF" CCIF CPA Limited "Closing Date" April 19, 2005 (or such other time or date on or before April 26, 2005 as the Company and the Manager shall agree) "Company" Moulin Global Eyecare Holdings Limited, an exempted company incorporated in Bermuda with limited liability, the shares of