Smart-Core Holdings Limited — Capital/Financing Update 2004

Mar 5, 2004

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.

==> picture [68 x 38] intentionally omitted <==

UNITY INVESTMENTS HOLDINGS LIMITED 合一投資控股有限公司

(Incorporated in the Cayman Islands with limited liability)

Financial Adviser

Placing Agent

CU Corporate Finance Limited Chung Nam Securities Limited PLACING OF NEW SHARES UNDER THE GENERAL MANDATE

The Company entered into the Placing Agreement on 27th February, 2004.

Under the Placing Agreement, the Placing Agent conditionally agreed to place on a best effort basis the Placing Shares to investors (being independent third parties who are not connected with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or their respective associates (as defined in the Listing Rules)) at a price of HK$0.20 per Placing Share. The Placing Shares will be issued under the General Mandate.

The Placing Shares represent approximately 20.00% of the existing issued share capital of the Company of 240,000,004 Shares and approximately 16.67% of the Company’s issued share capital as enlarged by the placing. For details, please refer to the section headed “Shareholding structure of the Company” below. The net proceeds of approximately HK$9.35 million from the placing will be used as the general working capital and the repayment of borrowings of the Company.

At the request of the Company, trading in the Shares was suspended at 9:30 a.m. on 1st March, 2004 pending the release of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m., 5th March, 2004.

THE PLACING AGREEMENT

Issuer

The Company

1

Placing Agent and Financial Adviser

Chung Nam Securities Limited and CU Corporate Finance Limited have been appointed as the Placing Agent and the Financial Adviser to the Company respectively in connection with the placing on a best effort basis. Upon completion of the placing, the Placing Agent and the Financial Adviser will each receive a fee of 1.5% and 0.5% respectively of the gross proceeds.

The Placing Agent and the Financial Adviser are deemed connected persons of the Company under the Listing Rules. However, as the total fees payable to the Placing Agent and the Financial Adviser are $192,000, if all the Placing Shares are fully placed, the transaction is exempted from any disclosure and shareholders approval requirements under Rule 14.24(5) of the Listing Rules.

Placees

Individual, institutional and/or professional investors, who are independent third parties not connected with the directors, chief executive or substantial shareholders of the Company or its subsidiaries or their respective associates (as defined in the Listing Rules). The Placing Shares shall be offered by the Placing Agent to not less than six placees.

Placing price

The placing price is HK$0.20 per Placing Share. This price was agreed after arm’s length negotiations between the Company, the Placing Agent and the Financial Adviser and represents (i) a discount of approximately 20% to the closing price of HK$0.25 per Share quoted on the Stock Exchange on 27th February, 2004; (ii) a discount of approximately 34.21% to the average closing price of HK$0.304 per Share as quoted on the Stock Exchange from 16th February, 2004 to 27th February, 2004, both dates inclusive, being the last ten full trading days immediately before the issue of this announcement; and (iii) a discount of approximately 60.78% to the unaudited net asset value of HK$0.51 per Share as at 31st January, 2004. After taking into consideration of the share price and turnover for the period from 28th February, 2003 to 27th February, 2004 with the year high and low of the underlying Shares at HK$0.36 and HK$0.05 respectively as well as the maximum trading volume of approximately 8.6 million shares in a day and most of the trading days recorded nil turnover. The Board considers that the placing price is fair and reasonable and is in the interests of the Company and its shareholders as a whole. The net proceeds of the placing will be paid to the Company upon completion of the placing. The cost and the expenses in relation to the placing will be borne by the Company.

The net placing price after expenses is approximately HK$0.196 per Placing Share.

2

Ranking of the Placing Shares

The Placing Shares will on issue rank equally in all respects with the then existing Shares save for any dividend or other distribution declared, made or paid by the Company by reference to a record date falling before the date of issue of Placing Shares.

Number of Shares to be placed

Under the Placing Agreement, 48,000,000 new Shares will be issued, representing approximately 20.00% of the existing issued share capital of the Company of 240,000,004 Shares and approximately 16.67% of the Company’s issued share capital as enlarged by the Placing Shares.

For details of the shareholding structure of the Company, please refer to the section headed “Shareholding structure of the Company” below.

General Mandate

The Placing Shares will be issued pursuant to the General Mandate. The General Mandate dated 6th February, 2004 has not been utilized prior to the entering into of the Placing Agreement.

Reasons for the placing and use of proceeds

The Company is an investment company listed pursuant to Chapter 21 of the Listing Rules and is principally engaged in the investment in listed and unlisted companies in Hong Kong and in PRC. As at the date of this announcement, the Company has total outstanding interest bearing borrowing in the amount of approximately HK$15million and the investment portfolio has been fully invested. The Board is quite satisfied with the existing portfolio and believes that the existing investments still maintain medium to long-term appreciation potential. Moreover, the Board is optimistic on the prospects of the economy and the stock market in Hong Kong and the People’s Republic of China and considers to raise fund for further investment. Even the Board has no specific investment target and loan repayment requirement at the time being, they consider to raise fund when such market opportunities arise. The net proceeds from the placing, which are estimated to be not less than approximately HK$9.35 million, will be used as to approximately HK$1.8 million for daily operation and the balance for the reduction of the revolving facility within the existing borrowings. As long as any investment targets being identified, the Company will draw the revolving facility for further investment.

Condition of the placing

The placing is conditional upon the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Placing Shares.

3

Force majeure

The placing is subject to termination on the occurrence of certain events before 9:30 a.m. (Hong Kong time) on the dates for completion of the Placing Agreement, including:

• (i) any material breach of any of the representations and warranties set out in the Placing Agreement; or

• (ii) the introduction of any new law or regulation or any change in existing laws or regulations or change in the interpretation or application thereof; or

• (iii) the occurrence of any event, development or change (whether or not local, national or international or forming part of a series of events or changes occurring or continuing before, on and/or after the date hereof and including an event or change in relation to or a development of an existing state of affairs) of a political, military, industrial, financial, economic or other nature, whether or not sui generis with any of the foregoing, resulting in a material adverse change in, or which might be expected to result in a material adverse change in, political, economic or stock market conditions; or

• (iv) the imposition of any moratorium, suspension or material restriction on trading in securities generally on the Stock Exchange occurring due to exceptional financial circumstances or otherwise; or

• (v) a change or development involving a prospective change in taxation in Hong Kong, Cayman Islands or the People’s Republic of China or the implementation of exchange controls which shall or might materially and adversely affect the Group (taken as a whole) or its present or prospective shareholders in their capacity as such; or

• (vi) any change or deterioration in the conditions of local, national or international securities markets occurs.

The Board is not aware of the occurrence of any of such events as at the date of this announcement.

Completion

The placing is to be completed on the next business day (or such other date as may be agreed between the Company, the Placing Agent and the Financial Adviser) after satisfaction of the respective condition under the section headed “Condition of the placing” above on or before long stop date.

4

The long stop date for the placing will be 15th April, 2004, or such other date as may be agreed between the Company, the Placing Agent and the Financial Adviser.

SHAREHOLDING STRUCTURE OF THE COMPANY

The shareholding structure of the company immediately before and after the placing is as follows:

Collier Assets Limited_(NB1) J.P. Morgan Chase & Co Royal London Asset Management Limited Mr. Qi Qing(NB2)_ Public Independent placees	Existing Number of Share % 55,718,000 23.22 15,362,000 6.40 16,000,000 6.67 20,000 0.01 152,900,004 63.71 – – 240,000,004 100.00	Immediately after completion of the placing Number of Share % 55,718,000 19.35 15,362,000 5.33 16,000,000 5.56 20,000 0.01 152,900,004 53.09 48,000,000 16.67 288,000,004 100.00	Immediately after completion of the placing Number of Share % 55,718,000 19.35 15,362,000 5.33 16,000,000 5.56 20,000 0.01 152,900,004 53.09 48,000,000 16.67 288,000,004 100.00
			100.00

• (NB1) Collier Assets Limited is the substantial shareholder of the Company that is wholly and beneficially owned by Ms. Lo Ki Yan, Karen

• (NB2) Mr. Qi Qing is the executive director of the Company

FUNDS RAISED BY THE COMPANY DURING THE 12 MONTHS PRECEDING THE DATE OF THIS ANNOUNCEMENT

Reference is made to the announcement of the Company dated 18th December, 2003. The Company has raised net proceeds of approximately HK$5.8 million via placing of new Shares which was completed on 8th January, 2004 and the Company has then fully utilized such proceeds together with HK$0.45 million from internal resources (i.e. a total of HK$6.25 million) as the earnest money not the consideration to HMI for the subscription of approximately 5 million new issued shares (subject to adjustment) of HMI at the indicative price of HK$1.25 per share (subject to adjustment) that is equivalent to approximately 1.59% of the enlarged issued share of HMI, subject to the Company and HMI enter into a legally binding agreement and the satisfactory of the Company’s due diligence exercise on HMI’s financial information. HMI has issued the receipt to the Company specifying HMI has received the earnest money and shall return the earnest money to the Company upon the Company notifying HMI that they do not proceed for the subscription.

5

HMI is an unlisted financial services group that comprise of the business in stock brokerage, commodity trading, money lending, corporate finance advisory, and investment management etc. The actual subscription price per share and the number of shares being subscribed eventually shall subject to adjustment after the due diligence exercise. The Board considers that the subscription of HMI shares may or may not proceed and no arrangement and legally binding agreement have been entered at the time being. The independent non-executive directors of the Company have not involved in the potential subscription. HMI is a deemed connected person to the Company because HMI is the holding company of the Financial Adviser, Placing Agent and CU Investment Management Limited, the investment manager of the Company. The completion of the subscription of HMI shares will constitute a connected transaction and shall only subject to the disclosure requirement as set out in Rule 14.25 of the Listing Rules. The Board initially considers that the Company’s payment of HK$6.25 million to HMI as the earnest money did not constitute a breach of the disclosure requirement under Chapter 14 of the Listing Rules. However, the Stock Exchange is of the view that the Company has not complied with the relevant disclosure requirements in accordance with Rule 14.25 of the Listing Rules and reserves its rights to take appropriate action against the Company and/or its directors for breaches of the Listing Rules, if any. As at the date of this announcement, the Board has discontinued the due diligence exercise on HMI as well as the potential subscription. On 4th March, 2004, HMI has returned the whole amount of earnest money. The Company has then deposited such earnest money into the bank account and such earnest money will be used to reduce the revolving facility of the borrowing. Whenever any investment targets being identified, the Company will drawn on the revolving facility.

GENERAL

Application will be made by the Company to the Stock Exchange for the granting of the listing of and permission to deal in the Placing Shares, as the case may be. The members of the Board confirmed that they have not dealt with any Share over the preceding 30 days.

At the request of the Company, trading in the Shares was suspended at 9:30 a.m. on 1st March, 2004 pending the release of this announcement. The Company has applied to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m., 5th March, 2004.

DEFINITIONS

“Board” the board of directors of the Company

“Company” Unity Investments Holdings Limited, a limited liability company incorporated in the Cayman Islands and the shares of which are listed on the Stock Exchange

6

• “Financial Adviser” CU Corporate Finance Limited, a limited liability company incorporated in Hong Kong and a deemed licensed corporation registered under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “General Mandate” the general mandate granted by shareholders of the Company to the Board to issue new Shares at the extraordinary general meeting of the Company held on 6th February, 2004

• “Group” the Company and its subsidiaries

• “HMI” Hennabun Management Inc., a limited liability company incorporated in British Virgin Islands

• “Placing Agent” Chung Nam Securities Limited, a limited liability company incorporated in Hong Kong and a deemed licensed corporation registered under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Placing Agreement” the placing agreement between the Placing Agent, Financial Adviser and the Company dated 27th February, 2004 in relation to the placing of the Placing Shares under the General Mandate

• “Placing Shares” 48,000,000 new Shares to be placed by the Placing Agent at HK$0.20 each pursuant to the Placing Agreement

• “Share(s)” ordinary share(s) of HK$0.10 each in the capital of the Company

• “HK$” Hong Kong dollars

By Order of the Board Unity Investments Holdings Limited Pang Shuen Wai, Nichols Executive Director

Hong Kong, 4th March, 2004

"Please also refer to the published version of this announcement in The Standard"

7