09:51     STELUX HOLDINGS<00084> - Announcement (3)                           

    TRANSACTIONS                                                              
    Vision Pro Group and Thong Sia Companies are the                          
    exclusive wholesale distributors for several brands                       
    of optical products in Hong Kong, PRC, Singapore and                      
    Malaysia respectively. These brands of optical                            
    products are well known and suitable for the Group's                      
    optical wear retailing operations.                                        
                                                                              
    The optical products distributed by Vision Pro Group                      
    and Thong Sia Companies are well received or expected                     
    to be well received by the Group's customers, and the                     
    Board considers it to be in the interest of the Group                     
    to engage in the Continuing Connected Transactions.                       
                                                                              
    The transaction amount of optical products purchased                      
    from Vision Pro Group and Thong Sia Companies for each                    
    of the two years ended 31 March 2004, and for the period                  
    from 1 April 2004 up to and including 31 December 2004                    
    were approximately HK$1,917,000 (audited),                                
    HK$2,180,000 (audited) and HK$2,848,000 (unaudited)                       
    respectively.                                                             
                                                                              
    Due to strong growth and better than expected sales                       
    in those countries where the Group's optical                              
    businesses operate, the Company proposes to revise                        
    the maximum aggregate annual consideration for the                        
    Continuing Connected Transactions to HK$4 million,                        
    HK$4.8 million and HK$5.8 million for each of the                         
    three financial years ended 31 March 2007 (the                            
    "Revised Caps"). If the Revised Caps are exceeded                         
    during the term of the Continuing Connected                               
    Transaction for the relevant financial year, the                          
    Company will re-comply with the announcement                              
    requirement under Rule 14A.35 of the Listing Rules.                       
    The Revised Caps were determined on the following                         
    basis:                                                                    
                                                                              
    (a)     historical transaction amounts for the period                     
    from 1 April 2004 up to and including 31 December 2004;                   
                                                                              
    (b)     the Group's expansion of its optical wear                         
    retailing operations in terms of establishment of new                     
    stores, inclusion of a wider range of products and                        
    growth in economies generally in the next three                           
    financial years;                                                          
                                                                              
    (c)     improved sales owing to improved economies                        
    generally; and                                                            
                                                                              
    (d)     the Company's internal projection that the                        
    expected growth in purchase of optical products by                        
    the Group shall be around 20% per annum in view of                        
    the pace and size of the Group's expansion in terms                       
    of establishment of new stores, inclusion of a wider                      
    range of products and growth in economies generally                       
    in the next three financial years.                                        
                                                                              
    It is expected that each of the applicable percentage                     
    ratios as defined in Rule 14A.10 of the Listing Rules                     
    calculated with reference to the annual consideration                     
    to be payable by the Group for, or the total revenue                      
    to be generated from, the Continuing Connected                            
    Transactions for each of the three financial years                        
    ended 31 March 2007, will exceed 0.1% but be less than                    
    2.5%. As such, the Continuing Connected Transactions                      
    will remain to be classified as continuing connected                      
    transactions exempt from the independent                                  
    shareholders' approval requirements under Rule                            
    14A.34 of the Listing Rules.                                              
                                                                              
    The Continuing Connected Transactions are entered                         
    into in the ordinary course of business of the