09:14     TAKSON HOLDINGS<00918> - Announcement (2)                           

    Chongqing Union-4        4,500,000                4,252,000               
    Cash                45%                                                   
    Takson Garment        5,500,000                5,200,000                  
    Cash                55%                                                   
                                                                              
    Total        10,000,000                9,452,000                          
    100%                                                                      
                                                                              
    Takson Garment and Chongqing Union-4 is to make capital injection in      
    full within 3 month after granting of the business licence. Application   
    for the business licence of the Joint Venture Company has been made to    
    the relevant government authority in the PRC but the same has not been    
    granted. It is currently expected (as the Company understands as normal   
    practice) that the business licence of the Joint Venture Company will be  
    issued within 2 months of application of the business licence. As at the  
    date of this announcement, the amount of capital injection has not been   
    paid by the parties.                                                      
                                                                              
    Takson Garment's portion of capital injection will be funded by internal  
    resources of the Group. None of the parties to the Joint Venture          
    Agreement is contractually bound to make future capital injection into    
    the Joint Venture Company.                                                
                                                                              
    Condition                                                                 
                                                                              
    The Joint Venture Agreement is subject to approval by the relevant        
    government authority in the PRC.                                          
                                                                              
    Profit/loss arrangement                                                   
                                                                              
    The profit and loss of the Joint Venture Company will be shared and       
    borne by the parties pro-rata to their respective equity interest in its  
    registered capital. The Joint Venture Company will become a subsidiary    
    of the Company.                                                           
                                                                              
    Pre-emptive right                                                         
                                                                              
    Each party to the Joint Venture Company has a pre-emptive right over the  
    transfer of interest in registered capital (in whole or in part) by the   
    other parties. Any party wishing to sell part of or all its interest in   
    the Joint Venture Company must obtain prior consent from the other        
    party.                                                                    
                                                                              
    Board composition                                                         
                                                                              
    The board of directors of the Joint Venture Company will consist of 5     
    directors amongst whom 3 will be nominated by the Company and 2 will be   
    nominated by Chongqing Union-4.                                           
                                                                              
    Information on the Joint Venture Company, Chongqing Union-4 and the       
    Group and reasons for the transaction                                     
                                                                              
    The Joint Venture Company will be a sino-foreign equity joint venture     
    whose currently proposed operations are the manufacture, export and sale  
    of various types of textile products, clothings and accessories. The      
    Joint Venture Company will set up a factory in Suzhou after the           
    obtaining of the business licence.                                        
                                                                              
    Chongqing Union-4 is a company established under the laws of the PRC and  
    it is principally engaged in garment manufacturing. Chongqing Union-4 is  
    responsible for selecting an appropriate site for the construction of     
    the factory, coordinating and organizing the construction project of the  
    factory and applying to the customs of the PRC for approvals for the      
    import of equipment and materials.                                        
                                                                              
    The Group is a manufacturer in the garment and textile industry. Takson   
    Garment responsible for the financial management of the Joint Venture     
    Company and the sale of the products manufactured by the Joint Venture    
    Company. The formation of the Joint Venture Company will enable the       
    Group to expand its operations in the PRC. The Company is of the view     
    that the Joint Venture Company will benefit from Chongqing Union-4's      
    experience and expertise in running garment manufacturing operations in   
    the PRC. The Directors believe that the Joint Venture Agreement was       
    entered into on normal commercial terms and terms of the transaction are  
    fair and reasonable and in the interest of the Company and the            
    Shareholders as a whole.                                                  
                                                                              
    LISTING RULES IMPLICATIONS                                                
                                                                              
    As the investment amount of RMB5,500,000 (equivalent to approximately     
    HK$5,200,000) exceeds 5% of the results of the relevant ratio as          
    calculated under Rule 14.07 of the Listing Rules, the entering into the   
    Joint Venture Agreement constitutes a discloseable transaction for the    
    Company under Chapter 14 of the Listing Rules. A circular containing      
    details of the formation of the Joint Venture Company will be despatched