10:23 CHINA VELOCITY<00149>-Announcement&Resumption of Trading(3) The Sale Loans owing to the Vendor arose from the initial injection of funds in connection with the acquisition of the Property before 2002. Information on the Property The Property is beneficially owned by Jiang Nan Property which is owned as to 75% by Eventic, a wholly owned subsidiary of More Cash and whose sole asset comprises interest in Jiang Nan Property. It comprises a development site with an area of 10,603 square metres, which is designated for a commercial or office development called "Paul Y. Plaza". Upon completion, the development will be a 47-storey office building surrounding a 5-level commercial podium with 3 basements underneath, the total gross floor area of which will be 114,028.69 square metres. As at the date of this announcements, the 5-level commercial podium with gross floor area of approximately 19,878 square metres and 3 basements with total gross floor area of approximately 19,807 square metres have been completed and are being used for retail and car parking purposes respectively, while the construction work of the superstructure of the office building is up to level 32. The construction work had been on hold prior to the takeover of the Company in December 2003. The Group has not injected any capital in connection with the construction of the Property since the takeover of the Company in December 2003 and the First Announcement. The 3 basements have been leased to a single tenant, an Independent Third Party, at a current monthly rent of RMB753,550. REASONS FOR AND BENEFITS OF THE DISPOSAL The Directors wish to take the opportunity of having located a willing buyer to realise the Company's property investment for cash, given that buildings of the size as Paul Y. Plaza in the PRC are not always easy to dispose and that the Company has no immediate intention to continue the remaining construction of the building until the market conditions are favourable and the Company has sufficient financial resources to make such commitment. After the Disposal, there will be a decrease in the assets and liabilities of the Group, while the future earnings of the Group will decrease. The Disposal represents a loss of approximately HK$19.8 million for the Group which will be recognised in the consolidated accounts of the Company for the year ending 31 December 2005. As set out in the Company's annual report for the year ended 31 December 2004, the principal activities of the Group are (i) property sales and development; and (ii) property rental. Following the Disposal, the Group still holds a substantial residential development at Chuang's Garden in the PRC with a value of HK$11.3 million (amounting to approximately 11.6% of the net asset value of the Group as at 31 December 2004) and a newly acquired development site in Shenzhen of HK$35 million (amounting to approximately 35.9% of the net asset value of the Group as at 31 December 2004) to support its property sales and development activities. There is no immediate plan for the construction of the development site in Shenzhen but it is the Company's intention to develop residential property on the site for resale purpose in the future when the market and financial conditions are favourable. The present property portfolio of the Group does not comprise properties for rental purposes. The Group will look for further opportunities to add other quality property projects with strong rental income to its portfolio in the normal course of its business. Although the Company recently acquired the food and beverage operations in Shenzhen and Beijing as announced in the Company' announcement dated 5 May 2005, the turnover for the year ended 31 December 2004 of which amounts to approximately 164% of the turnover of the Group for the same year, the Company has no intention to change its business focus, but to complement the Group's property development business by the steady income stream of the food and beverage operations. GENERAL The net proceeds of approximately HK$88 million from the Disposal is proposed to be used as general working capital of the Company. The Disposal constitutes a major transaction of the Company under the Listing Rules and is therefore subject to approval by the Company's shareholders under Rule 14.40 of the Listing Rules. As none of the shareholders is required to abstain from voting in respect of the Disposal, and the written shareholders' approval of the Disposal had