Wang On Group Limited — Capital/Financing Update 2001

Aug 30, 2001

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.

WANG ON GROUP LIMITED

(incorporated in Bermuda with limited liability)

Announcement

Completion of acquisition of a 29.19% equity interest and

the related placing of 15,372,330 existing shares

in Dailywin Group Limited

The Board refers to the announcement dated 16th August, 2001 issued by the Company on 17th August, 2001 relating to (i) the proposed purchase by Rich Time, a wholly-owned subsidiary of the Company, of a total of 38,500,000 shares of HK$0.10 each in the capital of Dailywin for a total consideration of HK$7,700,000 and (ii) the placing of a total of 15,372,330 existing shares in Dailywin by Kingsway SW Securities Limited (as placing agent).

To enable completion of the sale and purchase of the 38,500,000 shares of Dailywin, Rich Time and Mr. Leung agreed to reduce the amount to be advanced by Mr. Leung to Dailywin at Completion. Accordingly, Rich Time and Mr. Leung entered into the Supplemental Agreement on 28th August, 2001 to reduce the total amount to be advanced at Completion by Mr. Leung to Dailywin by HK$2 million from HK$10,774,466 to HK$8,774,466.

The Board announces that the Acquisition and Placing were completed on 29th August, 2001. Two executive directors and one non-executive director of Dailywin resigned as directors of Dailywin with effect from 28th August, 2001 and Mr. Tang Ching Ho and Mr. Chan Chun Hong, Thomas have been appointed as Chairman and Managing Director respectively and Mr. Siu Man Ho, Simon and Mr. Yuen Chi Choi, Simon have been appointed as independent non-executive directors of Dailywin, all effective on the same day.

Unless otherwise defined, capitalised terms used in this announcement shall bear the same meanings as those defined in the Announcement.

Advance by Mr. Leung to Dailywin and Share Pledge

As disclosed in the Announcement, completion of the Acquisition is, among others, conditional upon (i) the Sale Shares having been released from the Share Pledge and (ii) two advances, one for the sum of the Total Consideration receivable by Mr. Leung from Rich Time (including the Deposit) and one for the sum of HK$3,074,466, having been made to Dailywin by Mr. Leung at Completion. Mr. Leung relies on the reduced sum of HK$2 million (see below) to repay the outstanding sum of approximately HK$2 million, being part of the Bank Indebtedness, for the release by the related bank of the 49,050,000 shares (instead of 49,493,631 shares stated in the Announcement due to discrepancy in the information previously provided) in Dailywin (being part of the Sale Shares) under the Share Pledge.

Supplemental Agreement

Rich Time and Mr. Leung agreed that to enable completion of the sale and purchase of the Sale Shares under the Agreement, the total amount to be advanced at Completion by Mr. Leung to Dailywin would be reduced from HK$10,774,466 (representing the sum of the Total Consideration and a further advance of HK$3,074,466) to HK$8,774,466 (representing the sum of HK$5,700,000 and a further advance of HK$3,074,466). Accordingly, Rich Time and Mr. Leung entered into the Supplemental Agreement on 28th August, 2001, pursuant to which Mr. Leung has undertaken that subject to Completion, he will:-

(a) advance the sum of HK$5,700,000 (being part of the Total Consideration including the Deposit) receivable by him from Rich Time to Dailywin and a further sum of HK$3,074,466 to Dailywin, in each case by way of a 12 months' term loan at an interest rate equal to Prime plus 2% per annum on the condition that Dailywin shall apply the amounts so advanced towards repayment of the Bank Indebtedness relates to Dailywin; and

(b) apply the HK$2 million towards repayment of that part of the Bank Indebtedness relates to himself.

Completion

All of the conditions for Completion previously set out in the Announcement (as amended by the Supplemental Agreement) were fulfilled and Completion took place on 29th August, 2001. Rich Time has advanced the sum of HK$21,000,000 to Dailywin in accordance with the Agreement by way of a 18 months' term loan at an interest rate equal to Prime plus 2% per annum. Two executive directors, being Mr. Tsang Pui Sing, Aloysius and Mr. Leong Weng Kin and one non-executive director , being Wai Chi Kin, Franklin resigned as directors of Dailywin with effect from 28th August, 2001. Four directors nominated by Rich Time have been appointed as chairman and directors of Dailywin pursuant to the Agreement; Mr. Tang Ching Ho and Mr. Chan Chun Hong, Thomas have been appointed as Chairman and Managing Director of Dailywin respectively and Mr. Siu Man Ho, Simon and Mr. Yuen Chi Choi, Simon have been appointed as independent non-executive directors of Dailywin, all with effect from 28th August, 2001.

Mr. Tang Ching Ho is the Chairman of the Company and has extensive experience in corporate and business management, decorative and building industry.

Mr. Chan Chun Hong, Thomas is the finance director of the Company and has extensive experience in finance and legal matters and corporate restructuring.

Mr. Yuen Chi Choi, Simon is a certified public accountant in Hong Kong. Apart from being a fellow member of The Association of Chartered Certified Accountants, Mr. Yuen is also an associate member of the Hong Kong Society of Accountants and the Canadian Chartered Institute of Finance and Accountancy. He has more than 10 years of audit experience.

Mr. Siu Man Ho, Simon is a practising solicitor of the High Court of Hong Kong. He is a solicitor of the law firm Sit, Fung, Kwong & Shum. His areas of practice include corporate finance, capital markets, securities, mergers and acquisitions, joint ventures and information technology matters. He is also the vice president of the medical command of Hong Kong St. John's Ambulance.

The Company has been informed by Mr. Leung that the Placing was completed on 29th August, 2001.

Definitions

In this announcement, unless otherwise defined, the following expressions have the following meanings:-

"Announcement" a press announcement dated 16th August, 2001 published by the Company on 17th August, 2001 relating to the Acquisition and Placing;

"Bank Indebtedness" the outstanding aggregate amount of banking facilities amounting to approximately HK$29 million as at the date of the Agreement which was owed as to approximately HK$27 million by Dailywin and as to approximately HK$2 million by Mr. Leung;

"Company" Wang On Group Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange;

"Deposit" the sum of HK$5,000,000 paid by Rich Time to Mr. Leung as deposit for the Total Consideration at signing of the Agreement on 15th August, 2001;

"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of China;

"Placing" placing of a total of 15,372,330 existing shares in Dailywin by Kingsway SW Securities Limited (as placing agent) pursuant to a placing agreement dated 15th August, 2001 entered into between Mr. Leung, his wife, Surplus Management and Kingsway SW Securities Limited, details of which have been set out in the Announcement;

"Share Pledge" the share pledge on the 49,050,000 shares (instead of 49,493,631 shares stated in the Announcement due to discrepancy in the information previously provided) in Dailywin held by Surplus Management as collateral security to support certain banking facilities, the outstanding amount of which stands at approximately HK$29 million, equivalent to the Bank Indebtedness, as at the date of the Agreement;

"Supplemental Agreement" the supplemental agreement to the Agreement dated 28th August, 2001 made between Rich Time and Mr. Leung;

"Total Consideration" the total consideration of HK$7,700,000 payable by Rich Time for the purchase of the Sale Shares under the Agreement.

By Order of the Board

Tang Ching Ho

Chairman and Managing Director

Hong Kong, 29th August, 2001

Please also refer to the published version of this announcement in the i-Mail.