09:18     AV CONCEPT HOLD<00595> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited takes no                          
    responsibility for the contents of this announcement,                     
    makes no representation as to its accuracy or                             
    completeness and expressly disclaims any liability                        
    whatsoever for any loss howsoever arising from or in                      
    reliance upon the whole or any part of the contents                       
    of this announcement.                                                     
                                                                              
    AV CONCEPT HOLDINGS LIMITED                                               
    (Incorporated in the Cayman Islands with limited                          
    liability)                                                                
    (Stock Code: 595)                                                         
                                                                              
    DISCLOSEABLE TRANSACTION                                                  
                                                                              
    On 2 March 2005, the Group entered into a discretionary                   
    management agreement appointing UBS to manage the                         
    Portfolio with full authority of an amount of US$12                       
    million, which was subsequently reduced to US$10                          
    million on 24 March 2005. Based on the investment                         
    guideline agreed by the Group, the scope of Authorised                    
    Investments comprises a balanced mix of fixed income,                     
    equity and alternative investments.                                       
                                                                              
    By entering into the DM Agreement, the Group appointed                    
    a professional banker to manage the surplus funds held                    
    by the Group in order to manage such surplus funds                        
    professionally. The Directors believe that the terms                      
    of the DM Agreement are fair and reasonable and in the                    
    interests of the Shareholders as a whole.                                 
                                                                              
    The DM Agreement constitutes a discloseable                               
    transaction for the Company under Chapter 14 of the                       
    Listing Rules. A circular containing further details                      
    of the DM Agreement will be despatched to Shareholders                    
    as soon as practicable.                                                   
                                                                              
    BACKGROUND                                                                
    With a view to enhancing the yield of the Group's cash                    
    reserve, the Group resolved to engage an external                         
    professional banker to manage part of its surplus                         
    funds. The Group selected and engaged UBS for this                        
    purpose.                                                                  
                                                                              
    DM AGREEMENT                                                              
    On 2 March 2005, New Concept entered into a                               
    discretionary management agreement (special mandate                       
    portfolio) with UBS. To the best of the Directors'                        
    knowledge, information and belief and having made all                     
    reasonable enquiries, UBS and its ultimate beneficial                     
    owner are third parties independent of the Company and                    
    the directors, chief executive and substantial                            
    shareholders of the Company or its subsidiaries or any                    
    of their respective associates. Based on the                              
    confirmation from UBS, UBS did not hold any Shares as                     
    at 17 May 2005.                                                           
                                                                              
    Pursuant to the DM Agreement, New Concept appointed                       
    UBS to manage the Portfolio with full authority,                          
    subject to the investment guideline agreed by New                         
    Concept and subject to any special written                                
    instructions which New Concept may give to UBS and                        
    accepted by UBS, to invest and realise any Authorised                     
    Investments (see agreed scope below) in any manner UBS                    
    may in its absolute discretion consider appropriate,                      
    and generally to exercise on behalf of New Concept                        
    complete control over the management of the Portfolio.                    
                                                                              
    Based on the investment guideline agreed by New                           
    Concept, the scope of Authorised Investments                              
    comprises a balanced mix of fixed income, equity and                      
    alternative investments. Fixed income instruments                         
    include, but are not limited to, fixed income                             
    instruments of investment and below investment grade                      
    bonds, money market investments, other bond-like                          
    vehicles and derivatives thereof. Equity investments                      
    include, but are not limited to, indexed equity                           
    securities, structured products, collective                               
    investment schemes, funds of funds, stocks, other                         
    equity-like vehicles and derivatives thereof.                             
    Alternative investments include, but are not limited                      
    to, funds, securities, notes or other instruments                         
    linked to commodities, real estates, hedge funds, fund                    
    of hedge funds and other alternative investments.