11:08     TAI FOOK SEC<00665> - Announcement (4)                              

    from the Connected Clients or the Listed Connected Clients (as            
    the case may be) for the financial year ending 31 December 2005;          
                                                                              
    (iii)   the anticipated commission fee income derived from the            
    Connected Clients with reference to the proposed cap for the              
    placing, underwriting and sub-underwriting services (as stated            
    below); and                                                               
                                                                              
    (iv)    the normal commission rate charged to listed issuers in           
    relation to placement and underwriting activities                         
                                                                              
    and has been arrived at after having taken into account the               
    anticipated increase in the number of transactions, the rates             
    of fee for such services and/or the size of the transactions,             
    which are estimated to be significantly higher as compared with           
    the past few years in light of the anticipated improvements in            
    the economy and market sentiment in Hong Kong.                            
                                                                              
    So far in this current financial year the Group has already               
    engaged in discussions with a view to solicit from the Connected          
    Clients for financial advisory transactions, which, if                    
    materialised, the Group anticipates will generate advisory fee            
    and commission which will represent about half of the above               
    proposed annual cap. Since the Company is only three months into          
    its current financial year and the Group is already anticipated           
    to be able to solicit about half of the above proposed annual             
    cap, the Directors are of the view that such proposed annual              
    cap is fair and reasonable.                                               
                                                                              
    Underwriting and sub-underwriting commitment annual cap                   
                                                                              
    The Directors propose that the annual cap for underwriting and            
    sub-underwriting commitments contemplated under the Master                
    Agreements shall be HK$700 million for each of the three                  
    financial years ending 31 December 2007. The proposed annual              
    cap has been arrived at after having taken into account the               
    anticipated increase in the number of transactions and/or the             
    size of the transactions, which are estimated to be significantly         
    higher as compared with the past few years in light of the                
    anticipated improvements in the economy and market sentiment              
    in Hong Kong.                                                             
                                                                              
    The Directors have noted the recent improvements in the economy           
    and stock market sentiment of Hong Kong, which may give rise              
    to an increase in fund-raising activities in Hong Kong and may            
    provide more business opportunities to the Group. Having                  
    considered, among others, the historical figures and the                  
    anticipated growth in market capitalisation of the Listed                 
    Connected Clients, the Directors expect that the placing and              
    underwriting commitments will increase in the next three                  
    financial years.                                                          
                                                                              
    Such proposed annual cap is based on:                                     
                                                                              
    (i)     the simple arithmetic average of the gross underlying value       
    of securities of the Listed Connected Clients placed,                     
    underwritten or sub-underwritten by the Group for the two                 
    financial years ended 31 March 2003 and the period from 1 April           
    2003 to 31 December 2003;                                                 
                                                                              
    (ii)    the usual size of placement or underwriting activities            
    undertaken by the Group ;                                                 
                                                                              
    (iii)   the market capitalisation of the Listed Connected Clients;        
    and                                                                       
                                                                              
    (iv)    the anticipated growth of market capitalisation of the            
    Listed Connected Clients.