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The Board of Directors of RCE ("Board") wishes to announce that the Company is undertaking an internal re-organisation and amalgamation scheme in order to streamline its business operations which inter alia consist of the following salient arrangements:

a) E-Drama Sdn. Bhd. (E-Drama), the wholly-owned subsidiary of RCE, has on 21 October 2004 entered into a Share Sale Agreement (SSA) with the shareholders of RCE Marketing Sdn. Bhd. (RCEM), a 87.5% owned subsidiary of RCE, to acquire the entire issued and paid-up capital of RCEM comprising 8,000,000 ordinary shares of RM1.00 each and 38,780,000 Redeemable Convertible Non-Cumulative Preference Shares of RM1.00 each (RCNC Preference Shares) (collectively referred to as the Proposed Acquisition).

b) The total purchase consideration for the Proposed Acquisition of RM 63,165,000 shall be satisfied via the exchange of new issuance of 79,998 new ordinary shares of RM1.00 each and 387,800 new RCNC Preference Shares of RM1.00 each (collectively referred to as the Consideration Shares) in E-Drama to the then existing shareholders of RCEM as summarised below:



Existing Shareholders	No. of Sale Shares
RCE	7,000,000 Ordinary Shares
Meridian Mode Sdn. Bhd. (MMSB)	1,000,000 Ordinary Shares
RCE Ventures Sdn. Bhd. (RCEV)	38,780,000 RCNC Preference Shares

(Collectively referred to as the Vendors)

c) The Vendors effective interest in RCEM held via shares in E-Drama shall remain unchanged. However, RCEs effective interest in E-Drama would be diluted from 100% to 87.5%. As E-Drama would merely be an investment holding company, the Proposed Acquisition would not have any significant effect to RCE group for the financial year ending 31 March 2005 as E-Drama is currently dormant.

E-Drama is a wholly owned subsidiary of RCE. It was incorporated in Malaysia under the Companies Act, 1965 on 6 December 1999 as a private limited company. E-Drama has not commenced its operations. The present authorised share capital is RM100,000. The issued and paid-up share capital of E-Drama is RM2 comprising 2 ordinary shares of RM1.00 each.

MMSB was incorporated in Malaysia under the Companies Act, 1965 on 2 July 2002 as a private limited company. Its principal activity is investment holding. The present authorised share capital is RM100,000. The issued and paid-up share capital of MMSB is RM2 comprising 2 ordinary shares of RM1.00 each.

RCEV was incorporated in Malaysia under the Companies Act, 1965 on 20 April 1991 as a private limited company. Its principal activity is investment holding. The present authorised share capital is RM100,000. The issued and paid-up share capital of RCEV is RM100,000 comprising 100,000 ordinary shares of RM1.00 each.

RCEM is a 87.5% subsidiary of RCE. It was incorporated in Malaysia under the Companies Act, 1965 on 16 November 1981 as a private limited company. Its principal activities are the provision of general loan financing services and trading in electrical home appliances, other consumer durable products mainly on hire-purchase terms.

Salient Terms of the Proposed Acquisition

(a) Basis of Purchase Consideration

The purchase consideration for the Proposed Acquisition of RM63,165,000 ("Purchase Consideration") was arrived at on a willing buyer willing seller basis.

(b) Payment of Purchase Consideration

The Purchase Consideration, which will be satisfied by the issuance of the Consideration Shares in E-Drama to the Vendors in the following manner:-

Vendors	No. of Sale Shares of RM1.00 each	Purchase Consideration (RM)	No. of Consideration Shares of RM1.00 each
RCE	7,000,000 Ordinary Shares	21,336,798	69,998 Ordinary Shares
MMSB	1,000,000 Ordinary Shares	3,048,202	10,000 Ordinary Shares
RCEV	38,780,000 RCNC Preference Shares	38,780,000	387,800 RCNC Preference Shares
	TOTAL	63,165,000

The acquisition forms part of the Groups reorganisation and amalgamation plan to streamline its business activities and control over the business operations of RCEM and its group of subsidiary companies. Following the re-organisation, RCEM Group will be wholly owned by E-Drama while RCEs interest in E-Drama will be diluted from 100% to 87.5%.

The Proposed Acquisition will not have any effect on the share capital of RCE.

The Proposed Acquisition will not have any effect on the substantial shareholders of RCE and their shareholdings in RCE.

The Proposed Acquisition is not expected to have any material effect on RCE Group's earnings for the financial year ending 31 March 2005.

The Proposed Acquisition is not expected to have any material impact on the NTA of the RCE Group.

The Proposed Acquisition is not subject to approval of any authorities or RCE's shareholders.

None of the Directors and/or major shareholders of RCE and/or any persons connected with them have any interest, direct or indirect in the Proposed Acquisition.

The Board of Directors of RCE, after due consideration of all relevant aspects of the Proposed Acquisition, is of the opinion that the acquisition is reasonable and in the best interest of the Company.

Insofar as the Directors of RCE can ascertain, there is no departure from the SC's Guidelines.

A copy of the SSA may be inspected at the registered office of RCE situated at 1st Floor, Lot 271, Jalan Dua, Off Jalan Chan Sow Lin, 55200 Kuala Lumpur during normal office hours on Mondays to Fridays (except public holidays) for a period of three (3) months from the date of this announcement.

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