09:43     HIGH FASHION<0608> - Announcement (2)                               

    Completion                                                                
                                                                              
    Completion of the acquisition shall occur on or before                    
    6th July 2001 and the Seller will take all steps to                       
    assist the Buyer in obtaining the necessary approval                      
    of Xinchang branch of Ministry of Foreign Trade and                       
    Economic Cooperation ("Moftec") on the transfer of                        
    the Seller's 30% interest in ZXHF and conversion of                       
    ZXHF to a wholly foreign-owned enterprise under PRC                       
    law. Preliminary and informal inquiries with Moftec                       
    have confirmed that there should not be any difficulty                    
    in obtaining such approval.                                               
                                                                              
    Business of ZXHF                                                          
                                                                              
    ZXHF is presently the Company's major silk weaving                        
    mill in PRC. The net profits of ZXHF for the two years                    
    ending 30th September 1999 and 2000 are HK$2,727,920                      
    and HK$1,576,008 respectively.                                            
                                                                              
    (B)     Agreement for acquisition of assets in Xinchang, PRC              
                                                                              
    Agreement date                                                            
                                                                              
    22nd June 2001                                                            
                                                                              
    Parties                                                                   
                                                                              
    Seller  :       Xinchang Sanhe Youcheng Silk Co., Ltd. *                  
                                                                              
                                                                              
    Buyer   :       ZXHF                                                      
                                                                              
    Assets acquired                                                           
                                                                              
    Three lots located at Ren Min East Road, Cheng Dong                       
    Yi Cun and Cheng Guan Zhen Heng Street, Xinchang, PRC                     
    of about 16,736 sq.m. comprising three industrial                         
    buildings and three residential buildings of total                        
    floor area of about 43,730 sq.m. (the "Xinchang                           
    Property") and related facilities. The land use                           
    rights in respect of the Xinchang Property are                            
    currently registered in the name of Zhejiang Xinchang                     
    Silk Factory  * (being the previous                                       
    registered holder of 30% interest in ZXHF and having                      
    been restructured under PRC law to transfer its assets                    
    to the Seller, a PRC company owned by the previous                        
    employees of Zhejiang Xinchang Silk Factory) and are                      
    in the process of being changed to the Seller, which                      
    is expected to be completed shortly in the ordinary                       
    course.                                                                   
                                                                              
    Consideration                                                             
                                                                              
    The consideration is Rmb13,211,678.21 and was                             
    negotiated on arm's length basis with reference to the                    
    knowledge of the Company's management on the market                       
    value of the Xinchang Property. Although no                               
    professional valuation of the Xinchang Property has                       
    been obtained by the Company, the Company's                               
    management believes that the consideration                                
    represents a fair price for all the assets comprised                      
    in the transaction. The directors (including                              
    independent non-executive directors) of the Company                       
    believe the consideration is fair and reasonable to                       
    the Company.                                                              
                                                                              
    Payment terms                                                             
                                                                              
    (1)     Rmb1,800,000 payable as refundable (without                       
    interest) deposit on or before 6th July 2001 on                           
    account of the consideration; and                                         
                                                                              
    (2)     the balance in the amount of Rmb11,411,678.21 is                  
    due in cash on completion.