09:33 IDS<02387> - Announcement (4) (2) fee for the provision of information technology support which is based on cost. As disclosed in the section headed ``Connected Transactions --- Exempt Continuing Connected Transactions'' of the Prospectus, members of the Group have been sharing certain administrative services, including information technology infrastructure and application support, with the Company's parent company and its group companies (including LFD and JDH (Philippines)) at a rate based on usage and at cost which is determined on a fair and equitable basis. Hence, the Company considers that it is appropriate for the Company to adopt the same charging basis for the provision of information technology support under the Acquisition and Service Agreement. As the fee for the provision of information technology support is charged at US$36,000 per month, the Company expects that the total amounts receivable by the Group will respectively be US$288,000 (approximately HK$2,246,400) and US$144,000 (approximately HK$1,123,200) in each of the financial year ending 31 December 2005 and 2006. Accordingly the Company decides that for the purpose of the continuing connected transaction arising from the provision of information technology support, the annual caps for each of the financial year ending 31 December 2005 and 2006 will respectively be US$288,000 and US$144,000. Condition Precedent The completion of the Acquisition and Service Agreement is conditional upon IDS Marketing (Philippines) being appointed as exclusive distributor by the 3 principals of JDH (Philippines) as specified in the Acquisition and Service Agreement not later than 31 March 2005 or such later date (which shall be no later than 31 May 2005) as JDH (Philippines) and IDS Marketing (Philippines) may agree. Completion Completion of all the acquisitions under the Acquisition and Service Agreement will take place in the following manner: (1) delivery and payment for the acquisition of the Motor Vehicles will take place on the First Completion Date; (2) delivery for the acquisition of the First Tranche Inventory will take place on the First Completion Date, and the payment for it will be made within 60 days from the date of the said delivery; (3) delivery and payment for the acquisition of the IT Equipment will take place on the Second Completion Date; (4) delivery of the Second Tranche Inventory will take place on the Second Completion Date, and the payment for it will be made within 60 days from the date of the said delivery; and (5) the Other First Tranche Inventory and the Other Second Tranche Inventory may be delivered in various batches on the Other Inventory Completion Dates as may be agreed by IDS Marketing (Philippines) and JDH (Philippines), and the payment for each batch of the Other First Tranche Inventory or the Other Second Tranche Inventory delivered will be made within 60 days from the First Completion Date or the Second Completion Date respectively. INFORMATION ON THE COMPANY The Company is an integrated-distribution services provider in Asia, comprising marketing, logistics and manufacturing operations. LFD is principally engaged in the distribution of fashion and industrial products. LFD is a subsidiary of King Lun Holdings Limited, in which a family trust of Dr. Victor FUNG Kwok King (a non-executive Director) has a 50% interest and Dr. William FUNG Kwok Lun (a non-executive Director) has the remaining 50% interest. JDH (Philippines) was previously engaged in marketing business in the Philippines and is now in the process of closing down its operation. GENERAL JDH (Philippines) is wholly owned by LFD, which is a controlling shareholder of the Company. Accordingly, JDH (Philippines) is a connected person of the Company, and the acquisitions under the Transaction constitutes a connected transaction, and the Service to be provided under the Transaction constitutes a continuing connected transaction, for the Company under the Listing Rules. Pursuant to the Listing Rules, as each of the applicable Percentage Ratios is less than 2.5%, the Transaction is only subject to announcement and reporting requirements and does not require the approval of the independent shareholders of the Company. The Transaction is accordingly disclosed in this announcement and will be disclosed in the Company's forthcoming annual report pursuant to Rule 14A.45 of the Listing Rules.