Wang On Group Limited — Capital/Financing Update 2004

Oct 26, 2004

Wang On Group Limited

The Stock Exchange 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.

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WANG ON GROUP LIMITED 宏安集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code 1222)

DISCLOSEABLE TRANSACTIONS RELATING TO ACQUISITIONS OF PROPERTY SITES IN SAI KUNG

The Directors wish to announce that Ventix Investment, a wholly owned subsidiary of the Company, had entered into agreements with Citigold Development and Score Million to acquire from them two respective adjoining residential sites in Sai Kung, New Territories with a total site area of approximately 68,000 sq. ft. for an aggregate consideration of HK$13.8 million on 21 October 2004. As far as the Directors are aware, Citigold Development and Score Million are wholly owned subsidiaries of Gold-Face and that to the best of the Directors’ knowledge, each of Gold-Face, Citigold Development and Score Million and their respective ultimate beneficial owners are independent third parties not being connected persons of the Company (as defined in the Listing Rules).

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Under the Agreements, parties to the Agreements will enter into formal sale and purchase agreements on or before 4 November 2004 and that Completion is expected to be within two months from the date of signing of the Agreements.

The Acquisitions constitute discloseable transactions under the Listing Rules. A circular containing detail of the Acquisitions and other information will be sent to the shareholders of the Company as soon as practicable.

THE AGREEMENTS

Citigold Development Agreement

Date: 21 October 2004 Purchaser: Ventix Investment Vendor: Citigold Development Property: Property A, being a plot of vacant land, adjoining Property B, and registered in the Land Registry as Lots Nos. 400, 402, 403, 404, 405, 406A, 406RP, 407A, 407RP, 409A, 409RP and 418RP, all in D.D. No. 210 and Lots No. 1861A in D.D. No. 244, Sai Kung, New Territories, Hong Kong Consideration: HK$6,600,000, of which HK$198,000 had been paid upon the signing of the Citigold Development Agreement, HK$462,000 is to be paid at the time of entering into a formal sale and purchase agreement on or before 4 November 2004, with the balance of HK$5,940,000 payable upon Completion within 2 months from the date of signing of the Citigold Development Agreement. Other terms: The vendor shall transfer the property to the purchaser free of encumbrances and shall procure vacant possession of the property to the purchaser on Completion. The Citigold Development Agreement is conditional upon the completion of Score Million Agreement. In the event that the above condition cannot be fulfilled, the Agreements will be terminated and the purchaser will be entitled to any loss arising therefrom.

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The property shall not be affected by any green belt zoning restriction by the Hong Kong SAR Government that prohibits property development on the site.

Score Million Agreement

Date: 21 October 2004 Purchaser: Ventix Investment Vendor: Score Million Property: Property B, being a plot of vacant land, adjoining Property A, and registered in the Land Registry as Lots Nos. 407B, 409B, 410, 411, 412, 414 and 418A, all in D.D. No. 210 and Lots Nos. 1860 and 1861RP all in D.D. No. 244, Sai Kung, New Territories, Hong Kong Consideration: HK$7,200,000, of which HK$216,000 had been paid upon the signing of the Score Million Agreement, HK$504,000 is to be paid at the time of entering into a formal sale and purchase agreement on or before 4 November 2004, with the balance of HK$6,480,000 payable upon Completion within 2 months from the date of signing of the Score Million Agreement. Other terms: The vendor shall transfer the property to the purchaser free of encumbrances and shall procure vacant possession of the property to the purchaser on Completion.

The Score Million Agreement is conditional upon the completion of Citigold Development Agreement. In the event that the above condition cannot be fulfilled, the Agreements will be terminated and the purchaser will be entitled to any loss arising therefrom.

The property shall not be affected by any green belt zoning restriction by the Hong Kong SAR Government that prohibits property development on the site.

Save as disclosed above, there are no other terms pursuant to the Agreements. However, so far as the Directors are aware, the two properties owned by Citigold Development and Score Million are currently subject to mortgages and as such the above sales are subject to consents of such mortgagee banks, free of encumbrances.

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As far as the Directors are aware, both Citigold Development and Score Million are property development companies and are wholly owned subsidiaries of GoldFace, a company listed on the Stock Exchange. The Directors confirm that, to the best of their knowledge, information and belief, having made all reasonable enquiry, each of Gold-Face, Citigold Development and Score Million and their respective ultimate beneficial owners are independent third parties not being connected persons of the Company (as defined in the Listing Rules).

The Directors (include the independent non-executive Directors) confirm that the considerations for the Acquisitions are arrived at based on normal commercial terms taking into account the prevailing market conditions and prices of similar properties in the nearby areas in Sai Kung following negotiations between the parties.

Details of the properties

Property A, situated in Ho Chung, Sai Kung, New Territories has a site area of approximately 43,000 sq. ft. with a total developable gross floor area of approximately 10,360 sq. ft. Its adjoining Property B has a site area of approximately 25,000 sq. ft. and a developable gross floor area of approximately 10,000 sq. ft. To the best of knowledge of the Directors, the two property sites are designated to be suitable for residential development under the relevant Outline Zoning Plan promulgated under the Town Planning Ordinance (Cap.131) of the Hong Kong SAR Government. It is currently expected that the above two properties will be developed into a low density residential development. The Company has yet to formulate development plans and timetable in respect of the properties acquired at this stage. Further announcement will be made as and when appropriate in compliance with the requirements of the Listing Rules.

Reasons for the Acquisitions

The Group is principally engaged in the management and sub-licensing of wet markets, shopping centers and car parks as well as in property development and investment in Hong Kong. In addition, the Group also has interest in pharmaceutical business through its investment in Wai Yuen Tong Medicine Holdings Limited, a company listed on the Stock Exchange.

Given the current property market sentiment, the Directors are optimistic about the property market in Hong Kong and believe that the Acquisitions will enable the Group to further expand its property portfolio in Hong Kong. For the past 12 months, the Group has purchased or has agreed to purchase the following properties:

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• a residential land lot with Lot No. 1476 in DD No. 189 (to be known as STTL No. 465) in Shatin, New Territories, Hong Kong for a consideration of HK$103.8 million in March 2004 (details of which were set out in the Company’s announcement on 30 March 2004) and such purchase was completed in July 2004;

• residential and commercial units in Kennedy Town, Hong Kong for a consideration of HK$77.55 million for the development of residential and/ or commercial use (details of which were set out in the Company’s announcement on 30 September 2004);

• vacant residential land lots at Fairview Park Boulevard, Yuen Long for the development of low density residential and/ or commercial uses for a total consideration of HK$68.33 million (details of which were set out in the Company’s announcement on 13 October 2004)

The Directors (include the independent non-executive Directors) consider the Acquisitions were negotiated on an arm’s length basis and on normal commercial terms between the parties taking into account the prevailing market conditions and prices of similar properties in the nearby areas in Sai Kung and they are of the view that the terms of the Agreements are fair and reasonable and in the interests of the shareholders of the Company as a whole. The Group will finance the above Acquisitions through its internal cash resources. The Directors confirm that taking into account payment of the considerations mentioned above and the Acquisitions, the Group will have sufficient working capital for the operation of its business.

General

The Acquisitions constitute discloseable transactions under the Listing Rules and, as such, a circular will be despatched to the Company’s shareholders as soon as practicable pursuant to the requirement under the Listing Rules.

Other information

Reference is made to the announcement of the Company dated 6 February 2004 in relation to Fully Finance, a wholly owned subsidiary of the Company, entered into a loan agreement with Gold Face, pursuant to which Fully Finance provided a loan of HK$3,000,000 to Gold Face which is repayable in August 2004. The outstanding sum payable under such loan agreement was remained unsettled as of today hereof and would not be set off against the considerations of the Acquisitions.

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Definitions

• In this announcement, the following expressions have the following meanings: “Acquisitions” the purchases of Property A and Property B by Ventix Investment from Citigold Development and Score Million respectively

• “Agreements” the Citigold Development Agreement and Score Million Agreement

• “Board”

• the board of Directors

• “Citigold Citigold Development Limited, a limited liability company Development” incorporated in Hong Kong

• “Citigold the provisional sales and purchase agreement dated Development 21 October 2004 between Ventix Investment, as buyer, Agreement” and Citigold Development, as seller, of Property A in Sai Kung as set out therein

• “Company” Wang On Group Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange

• “Completion” Completion of the Acquisitions pursuant to the Citigold Development Agreement and Score Million Agreement

• “Directors” directors of the Company

• “Fully Finance” Fully Finance Limited, a company incorporated in British Virgin Islands and a wholly owned subsidiary of the Company

• “Gold-Face” Gold-Face Holdings Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange, and is currently in the third stage of delisting procedures under the Listing Rules

• “Group” the Company and its subsidiaries “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

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“Property A” a plot of vacant land, adjoining Property B, and registered in the Land Registry as Lots Nos. 400, 402, 403, 404, 405, 406A, 406RP, 407A, 407RP, 409A, 409RP and 418RP, all in D.D. No. 210 and Lots No. 1861A in D.D. No. 244, Sai Kung, New Territories, Hong Kong “Property B” a plot of vacant land, adjoining Property A, and registered in the Land Registry as Lots Nos. 407B, 409B, 410, 411, 412, 414 and 418A, all in D.D. No. 210 and Lots Nos. 1860 and 1861RP all in D.D. No. 244, Sai Kung, New Territories, Hong Kong “Score Million” Score Million Investment Limited, a limited liability company incorporated in Hong Kong

• “Score Million the provisional sales and purchase agreement dated Agreement” 21 October 2004 between Ventix Investment, as buyer, and Score Million, as seller, of Property B in Sai Kung as set out therein

• “Shares” shares of nominal value HK$0.10 each in the share capital of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “Ventix Investment” Ventix Investment Limited, a company incorporated in Hong Kong and a wholly owned subsidiary of the Company

By order of the Board Wang On Group Limited Tang Ching Ho Chairman and Managing Director

Hong Kong, 26 October 2004

* For identification purpose only

As at the date hereof, the Board of the Company comprises of three executive Directors, namely Mr. Tang Ching Ho, Ms. Yau Yuk Yin and Mr. Chan Chun Hong, Thomas, and four independent non-executive Directors, namely Dr. Lee Peng Fei, Allen, Mr. Wong Chun, Justein, Dr. Siu Yim Kwan, Sidney and Mr. Siu Kam Chau.

Please also refer to the published version of this announcement in The Standard dated 27 October 2004.

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