09:43 CHINA VELOCITY<00149> - Announcement (3) Based on the audited accounts of Shenzhen JLT as at 31 December 2004, both the total assets and net asset value of Shenzhen JLT was approximately RMB4.6 million. The loss before and after tax for Shenzhen JLT as recorded in its audited accounts for the years ended 31 December 2003 and 2004 were approximately RMB0.4 million and RMB30,000 respectively. Based on the audited accounts of Beijing JLT as at 31 December 2004, the total assets of Beijing JLT was approximately RMB4.7 million, while its negative net asset value was approximately RMB0.6 million. The loss before and after tax for Beijing JLT as recorded in its audited accounts for the years ended 31 December 2003 and 2004 were RMB0.2 million and RMB0.3 million respectively. General The Company will fund the Acquisition through its own internal resources. The Acquisition will not affect the Company's funding for its principal activities. The Acquisition constitutes a discloseable transaction of the Company under the Listing Rules. A circular of the Company in relation to the Agreement and the Acquisition will be dispatched to shareholders of the Company as soon as reasonably practicable. As Mr. Fu is a Director of the Company and the Purchaser, the Acquisition also constitutes a connected transaction for the Company under the Listing Rules. As the total consideration for the Acquisition is less than HK$10,00,000 and each of the relevant percentage ratios under Chapter 14 of the Listing Rules is less than 25%, the Acquisition exempted from independent shareholders' approval requirement but is subject to the reporting and announcement requirements as set out in Rules 14A.45 to 14A.47 of the listing Rules. Suspension of trading At the request of the Company, the shares of the Company have been suspended from trading on the Stock Exchange from 10:53a.m. on 22 April 2005, pending the release of an announcement relating to a major transaction of the Company. Trading of the shares of the Company will remain suspended until the publication of the abovementioned announcement. Definitions:- In this announcement, the following terms have the following meanings:- "Acquired Group" Health Food, JLT, Beijing JLT and Shenzhen JLT "Acquisition" the proposed acquisition of the Sale Shares pursuant to the Agreement "Agreement" The agreement dated 13 April 2005 in relation to the sale and purchase of the Sale Shares entered into between the Vendors and the Purchaser "Beijing JLT" *, a company incorporated in PRC and owned as to 30% by Health Food and 70% by JLT "BVI" British Virgin Islands "Company" China Velocity Group Limited, a company incorporated in Bermuda with limited liability which shares are listed on the Stock Exchange "Completion" Completion of the Agreement "Consideration" the aggregate purchase price of HK$5,500,000 comprising (i) HK$2,150,000 as purchase price of Health Food Shares and (ii) HK$3,350,000 as purchase price of the JLT Shares "Directors" the directors of the Company "Group" the Company and it subsidiaries "Health Food" Zhong Hua Health Food Culture Research Limited, a company incorporated in Hong Kong on 16 April 2003, the entire issued share capital of which is owned equally by the Vendors beneficially