10:09     LUKS IND(GROUP)<00366> - Announcement (2)                           

    Deluxe Assets, the Company has agreed to issue to China National          
    Aero-Technology a letter of undertaking for the issuance of the           
    First Letter of Credit by Best Deluxe Assets. The major terms             
    of the letter of undertaking include inter alia, that the Company         
    will arrange for the opening of a Letter of Credit with a third           
    party bank in favour of China National Aero-Technology for the            
    sum of US$3,748,150.00 (approximately HK$29,235,570.00)                   
    representing 35% of the total Consideration in the event of Best          
    Deluxe Assets' failure to do so in accordance with the terms              
    of the Agreement.                                                         
                                                                              
    The Consideration will be paid partially from a bank's borrowing,         
    as to HK$ 30 million from the bank's borrowing and the balance            
    of the Consideration from the Company's internal resources.               
                                                                              
    The Consideration was in line with the market price for the               
    purchase of similar Facilities and was arrived after arm's length         
    negotiation between the Company and China National                        
    Aero-Technology. The Directors consider that the Consideration            
    payable for the Purchase and the terms and conditions of the              
    Agreement are fair and reasonable and is in the interests of              
    the Shareholders and the Company as a whole.                              
                                                                              
    Conditions precedent    The Agreement is conditional, inter alia,         
    upon:                                                                     
    to the Agreement                                                          
    (i)     the receipt by Best Deluxe Assets of the Letter of                
    Undertaking;                                                              
                                                                              
    (ii)    the receipt by China National Aero-Technology of                  
    US$3,212,700.00 (approximately HK$25,059,060.00) representing             
    30% of the total Consideration being prepayment; and                      
                                                                              
    (iii)   the receipt by China National Aero-Technology of a letter         
    of undertaking issued by the Company for undertaking the issuance         
    of the First Letter of Credit by Best Deluxe Assets.                      
                                                                              
    INFORMATION ON CHINA NATIONAL AERO-TECHNOLOGY                             
                                                                              
    China National Aero-Technology is a company duly constituted              
    and validity existing under the laws of PRC and is principally            
    engaged in machineries and equipments import and export                   
    business.                                                                 
                                                                              
    INFORMATION ON BEST DELUXE ASSETS                                         
                                                                              
    Best Deluxe Assets is a limited company incorporated in the               
    British Virgin Islands and principally engaged in the business            
    of trading of equipment                                                   
                                                                              
    REASONS FOR ENTERING INTO THE AGREEMENT                                   
                                                                              
    The Group is principally engaged in (i) manufacture and sale              
    of cement products; (ii) manufacture and sale of holistic                 
    healthcare products; (ii) sale of electronic products and                 
    plywood products; (iv) property investment; and (iv) investment           
    holding.                                                                  
                                                                              
    In line with the local economies and the statistics dated 15th            
    June 2004 of the Vietnam's Ministry of Construction, the demand           
    for the cement products in Vietnam is on an upward trend.                 
    According to the projection of the Ministry of Construction,              
    the demand will grow on average about 12% per annum from 2005             
    to 2007. Thus, the Directors believe that the business of cement          
    and clinkers will maintain its growing pace in a foreseeable              
    future. The sales quantity of cement and clinkers of the Group            
    for 2001, 2002 and 2003 were 555,000 tonnes, 590,000 tonnes and           
    666,000 tonnes respectively. It is expected that the sales for            
    2004 will be over 750,000 tonnes which has almost