10:54 HANTEC INV HOLD<00111> - Announcement (2) Consideration The consideration payable by the Group to Ms. Chang for the Sale Shares is NTD11,899,000 (equivalent to approximately HK$2,975,000). The Group will settle the consideration in cash upon fulfillment of conditions precedent set out in the Sales and Purchase Agreement. The Group will finance the Acquisition from its internal resources. The consideration is arrived at after an arm's length negotiations between the Group and Ms. Chang. Compared with the proportional interest represented by the Sale Shares in Fulland, the consideration equals the attributable unaudited net assets of Fulland as at 30 April 2005, and represents a 9% discount to the attributable audited net assets of Fulland as at 31 December 2004. In February 2004, the Group (through Hantec Taiwan) and Ms. Chang acquired 70% and 30% shareholding of Fulland, respectively, from the then shareholders of Fulland, all being independent third parties (as defined under the Listing Rules) of the Company. Each of the investment costs of the Group and Ms. Chang in 2004 was approximately NTD10.83 (equivalent to approximately HK$2.71) per share of Fulland. The consideration payable by the Group to Ms. Chang for the Sale Shares is approximately NTD7.93 (equivalent to approximately HK$1.98) per share of Fulland, representing a discount of approximately 27% to the investment cost of the Group in February 2004. Condition precedent The Sales and Purchase Agreement is conditional upon, among others, the obtaining by the Group of necessary government approval(s) of Taiwan for the Acquisition. Completion Completion of the Acquisition will take place within seven (7) days after the satisfaction of the conditions precedent or waivers thereof (as applicable). INFORMATION ON FULLAND Fulland is a company incorporated in Taiwan providing wealth management, investment advisory and consultancy services in Taiwan. Its paid-in capital is NTD50 million. Fulland had audited net assets of approximately NTD48,250,000 (equivalent to approximately HK$12,062,500) and NTD43,546,000 (equivalent to approximately HK$10,886,500) as at 31 December 2003 and 2004 respectively, and had unaudited net assets of approximately NTD39,664,000 (equivalent to approximately HK$9,916,000) as at 30 April 2005. Fulland had audited operating net loss of approximately NTD1,678,000 (equivalent to approximately HK$419,000) and NTD6,304,000 (equivalent to approximately HK$1,576,000) for the year ended 31 December 2003 and 2004 respectively. The unaudited operating net loss of Fulland was approximately NTD3,883,000 (equivalent to approximately HK$971,000) for the four months ended 30 April 2005. REASONS FOR THE ACQUISITION The Group is principally engaged in the provision of financial services including leveraged foreign exchange trading, securities dealing, commodities futures trading, asset management, corporate finance and advisory, financial planning, and bullion trading. The Group has been reaching out for Taiwan financial market and, as at the date of this announcement, owned 70% shareholding of Fulland. According to statistics issued on 10 March 2005 by the Taiwan Securities Exchange Corporation set out below, the securities market in Taiwan has shown a promising growth during the past three years, by value amount and by the number of investor's accounts opened. Year Market capitalisation as at year-end date (NTD million) Annual aggregate trading value (NTD million) Accumulated number of investor's accounts opened as at year- end date 2002 9,094,936 21,873,950 12,869,344 2003 12,869,101 20,333,237 13,053,178 2004 13,989,100 23,875,366 13,720,461