09:54     INNOVO<00703> - Announcement (4)                                    

    and deadlock: conduct or development of the                               
    Business is arising between the parties to the CJV,                       
    it shall give as early an indication as practicable                       
    to the other parties to the CJV of that concern so                        
    that orderly arrangements for the continuation of the                     
    Business can, if possible, be agreed on an amicable                       
    basis.                                                                    
                                                                              
    Notwithstanding anything to the contrary in the                           
    Agreement, any parties to the CJV may at any time                         
    during the Term terminate the Agreement upon giving                       
    not less than six (6) months' notice in writing to                        
    the other parties to the CJV if the amusement park                        
    has suffered a loss for a consecutive period of three                     
    (3) years.                                                                
                                                                              
    In the event of termination:                                              
                                                                              
    (i)     the parties to the CJV shall consult and use all                  
    reasonable endeavours to agree an orderly programme                       
    for the winding up of the business of the CJV; and                        
                                                                              
    (ii)    the assets of the CJV shall upon termination be                   
    realised and distributed to the parties of the CJV                        
    in the manner agreed between them.                                        
                                                                              
    Upon termination, the parties to the CJV shall prepare                    
    a balance sheet relating to the CJV as at the date                        
    of such termination and a profit and loss account for                     
    the period form the end of the last Accounting Period                     
    up to the date of such termination. Such accounts                         
    shall be audited.                                                         
                                                                              
    3.      REASONS FOR AND BENEFITS OF THE AGREEMENT                         
    The Group is principally engaged in the operation of                      
    itinerant carnivals and amusement parks.                                  
                                                                              
    Under the Agreement, the Company will be responsible                      
    to invest a total of approximately RMB13.8 million                        
    (approximately HK$12.9 million) within a period of                        
    6 months from the Effective Date on machine rides,                        
    fixtures and features on the Land and the CJV Partner                     
    will contribute the free use of the Land for the                          
    Company to operate. The Company and the CJV Partner                       
    will share any net profit after tax on a 60:40 ratio.                     
    The profit sharing ratio was negotiated on an arm's                       
    length basis between the Company and the CJV Party.                       
    Taking into account the amount of work and resources                      
    to be involved and/or provided by the Company to                          
    establish and operate the amusement park on the Land,                     
    the parties to the CJV agreed that the Company will                       
    share 60% of the net profit after tax of the CJV.                         
                                                                              
    The Board believes that such investment will allow                        
    the Company to secure a fixed location as an                              
    additional base for the Group's business, and the                         
    combination of itinerant carnivals and fixed location                     
    operation will enable the Group to have the                               
    flexibility to inter-change machine rides from time                       
    to time to attract attendances and maintain                               
    attractiveness of the various locations.                                  
                                                                              
    Gaining from the experience in its earlier carnival                       
    operations, the Group has established a good                              
    reputation in the market (vis-a-vis the other two                         
    major itinerant carnival operators currently                              
    operating in the PRC) and the Board will work to                          
    continue the growth momentum of this business in the                      
    future.                                                                   
                                                                              
    Given the aforesaid reasons, the Board is of the view                     
    that the CJV arrangement is in the interests of the                       
    Company and the Shareholders as a whole; and