In an attempt to fully implement the policy initiated by the Nanjing government to restructure industry layout across the city and expedite joint development between enterprises and local economy, the Municipal Government of Baixia District, Nanjing has requested Nanjing Panda Electronics Company (HKG:0553) to relocate Nanjing Panda Mechanical and Electrical Equipment Factory located at No. 118 Haifuxiang, Baixia District, the company announced.

The company has entered into a relocation agreement with the Baixia Government, with the relocation compensation set at RMB125 million (HK$153.75 million). The relocation of the equipment factory will commence in early 2012.

The equipment factory is mainly engaged in plant leasing and the manufacturing and sales of electronic products, communication products, apparatuses and instruments. Its revenue represented 0.2% of the total revenue of the group for the year ended 31 December 2010 and the nine months ended 30 September 2011, and had insignificant contribution to the profit of the group during the aforesaid periods, the company said.

The directors anticipate that the subject relocation will have a non-recuming impact on the profit and loss of the company between 2012 and 2014, actual figures of such impact will be disclosed as soon as practicable in accordance with the progress of the relocation.