09:49     LUK FOOK HOLD<00590> - Announcement (2)                             

    and chief executive of the Company or any of its                          
    subsidiaries and any of their respective associates.                      
    The Tenancy Agreement is a renewal of an existing                         
    tenancy agreement expired on 31st December 2004 which                     
    was previously disclosed in a press announcement                          
    dated 31st December 2003 and annual reports of the                        
    Company.                                                                  
                                                                              
    The directors (including the independent                                  
    non-executive directors) of the Company (the                              
    "Directors") consider that the premium of HK$20,000                       
    per month is justified because:                                           
                                                                              
    1.      the Property is a corner lot located at the junction              
    of Fung Tak Road and Fei Fung Street, a unique site                       
    with the most traffic in the district concerned which                     
    can also accommodate a large and prominent signboard                      
    at the retail shop front, and the Directors could not                     
    find other alternative premises in that district;                         
                                                                              
    2.      the existing retail shop operated by the Group has                
    successfully accumulated a substantial valuable                           
    customer base over the past few years, which would                        
    not be available in the nearby area;                                      
                                                                              
    3.      the relocation of the retail shop to another site                 
    would involve extra costs far more than the total                         
    premiums of HK$240,000 payable during the lease term;                     
    and                                                                       
                                                                              
    4.      the relaxation of travel restrictions by the PRC                  
    Government, the launching of the RMB credit cards and                     
    debit cards in Hong Kong since January 2004 and the                       
    increase in the maximum amount of cash from RMB6,000                      
    to RMB20,000 that can be carried by an individual PRC                     
    tourist since January 2005, the spending power of PRC                     
    tourists is expected to enhance the retail business                       
    growth in Hong Kong and would benefit the Company as                      
    a whole.                                                                  
                                                                              
    CONNECTED PERSON                                                          
    Mr. Wong, being the father the Company's Chairman &                       
    Chief Executive, together with a registered                               
    shareholding of about 0.03% of the issued shares of                       
    the Company, is regarded as a connected person under                      
    the Rules governing the listing of securities on the                      
    Stock Exchange of Hong Kong Limited (the "Listing                         
    Rules").                                                                  
                                                                              
    CONNECTED TRANSACTIONS                                                    
    Similar to the existing tenancy, the Tenancy                              
    Agreement is regarded as a continuing connected                           
    transaction under the Listing Rules. Pursuant to Rule                     
    14A.34 of the Listing Rules, the Company is required                      
    to disclose by way of a press announcement and in the                     
    annual reports and accounts of the brief details of                       
    the transactions.                                                         
                                                                              
    REASON FOR THE TENANCY AGREEMENT                                          
    The Group has operated a jewellery retail shop on the                     
    Property since 1st July 1996, which has successfully                      
    accumulated a substantial valuable customer base over                     
    the past few years and achieved satisfactory business                     
    results during the past few years. In order to keep                       
    on operating the retail shop, the Group has to                            
    continue leasing the Property.                                            
                                                                              
    DIRECTORS' VIEW                                                           
    Having taken into account the factors and reasons set                     
    out above, the Directors (including the independent                       
    non-executive directors of the Company) are of the                        
    view that the Tenancy Agreement is on normal                              
    commercial terms entered into on arm's length basis,                      
    in the ordinary and usual course of