10:20     <00577><00498><00372> - Joint Announcement (5)                      

    For each of the four years ended 31st March, 2004, the rental,            
    air-conditioning charges and building management fees                     
    received by the Remaining Paul Y Group from the Paul Y                    
    Construction Group under the existing lease arrangements                  
    amounted to approximately HK$12.6 million, HK$12.6 million,               
    HK$11.0 million and HK$8.6 million respectively. The building             
    management fee (including the supply of air-conditioning                  
    during office hours) was HK$2.7 per square foot. The supply               
    of air-conditioning after office hours was charged at HK$300              
    per hour. The reduction in rental payment for the last two                
    years was due to reductions in both the rental rate and                   
    office areas under rental.                                                
                                                                              
    The Directors propose that the annual cap amount of the                   
    rental, air-conditioning charges and building management fees             
    to be paid under the Lease Agreement by the Enlarged Group to             
    the Remaining Paul Y Group for each of the three years ending             
    31st March, 2007 will not exceed HK$12 million. The basis of              
    the annual cap amount is determined with reference to (i)                 
    existing lease arrangements between the Paul Y Construction               
    Group and the Remaining Paul Y Group; (ii) the terms of the               
    Lease Agreement; and (iii) the prevailing market rentals as               
    assessed by independent professional property valuers who                 
    have confirmed that the monthly rentals of the Lease                      
    Agreement are fair and reasonable in view of the prevailing               
    market condition. As the Lease Agreement will not provide for             
    the extra air-conditioning charges during overtime hours and              
    hourly car parking charges, the cap amount has built in a                 
    buffer of approximately HK$1 million for such extra air-                  
    conditioning and hourly car parking charges.                              
                                                                              
    The Directors consider that the Continuing Connected                      
    Transactions will be entered into in the usual and ordinary               
    course of businesses of the Enlarged Group upon Completion.               
    They also consider the terms of the Continuing Connected                  
    Transactions have been negotiated on an arm's length basis                
    and will be conducted on normal commercial terms and on terms             
    no less favourable to the Enlarged Group than terms available             
    to or from (as appropriate) independent third parties.                    
                                                                              
    The Continuing Connected Transactions are subject to approval             
    of the Independent Shareholders at the SGM to be taken by                 
    poll at which Paul Y and its associates will abstain from                 
    voting. The Continuing Connected Transactions were negotiated             
    on an arm's length basis and the Directors believe that the               
    terms, including the proposed annual cap amounts for the                  
    Continuing Connected Transactions, are fair and reasonable                
    and the Continuing Connected Transactions are in the interest             
    of the Enlarged Group and the Shareholders as a whole.                    
                                                                              
    Skynet will seek the approval of the Independent Shareholders             
    at the SGM of the Continuing Connected Transactions and the               
    respective cap amounts in relation to the Continuing                      
    Connected Transactions on the following conditions:                       
                                                                              
    (i)   the annual cap amounts of the value of construction                 
    services to be rendered by the Paul Y Construction Group to               
    the Remaining Paul Y Group will not exceed HK$10 million,                 
    HK$60 million and HK$60 million for the three years ending                
    31st March, 2005, 2006 and 2007 respectively; and                         
                                                                              
    (ii)   the annual cap amount of the rental, air-conditioning              
    charges and building management fees to be paid to the                    
    Remaining Paul Y Group by the Enlarged Group will not exceed              
    HK$12 million for each of the three years ending 31st March,              
    2007.                                                                     
                                                                              
    Skynet is also required to comply with Rules 14A.37 to 14A.40             
    and 14A.46 of the Listing Rules in relation to the Continuing             
    Connected Transactions.                                                   
                                                                              
    Details of the Continuing Connected Transactions including                
    the letter of advice of Equitas and notice of SGM regarding,              
    among others, the Continuing Connected Transactions are set               
    out in the Skynet Circular.                                               
                                                                              
    INFORMATION ON THE SKYNET GROUP                                           
    The Skynet Group is principally engaged in the import and                 
    sale of marble and granite products, the provision of                     
    installation services for marble and granite products and the             
    provision of information technology services. Since April                 
    2002, the provision of information technology services has                
    been suspended.