09:28     GUANGNAN (HOLD)<01203> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited takes no                          
    responsibility for the contents of this announcement,                     
    makes no representation as to its accuracy or                             
    completeness and expressly disclaims any liability                        
    whatsoever for any loss howsoever arising from or in                      
    reliance upon the whole or any part of the contents                       
    of this announcement.                                                     
                                                                              
                                                                              
    GUANGNAN (HOLDINGS) LIMITED*                                              
     (Incorporated in Hong Kong with limited liability)                       
    (Stock code: 1203)                                                        
                                                                              
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
                                                                              
    On 10th December, 1999, Shan Hai, an indirect                             
    95%-owned subsidiary of the Company, entered into the                     
    Land Lease Agreement for, inter alia, leasing of a                        
    parcel of land of a total site area of approximately                      
    29,587.5 square meters located in Zhongshan of the                        
    PRC to GD Decorative for building and operating a                         
    factory thereon.                                                          
                                                                              
    On 20th January, 2005, Shan Hai entered into the Staff                    
    Quarters Lease Agreement with GD Decorative pursuant                      
    to which Shan Hai has agreed to lease staff quarters                      
    and provide utilities to GD Decorative.                                   
                                                                              
    On 20th January, 2005, Zhongyue Tinplate, an indirect                     
    95%-owned subsidiary of the Company, entered into the                     
    Supply Agreement with GD Decorative pursuant to which                     
    Zhongyue Tinplate has agreed to provide water and                         
    electricity to GD Decorative.                                             
                                                                              
    GD Decorative is a subsidiary of GDH, a substantial                       
    shareholder of the Company, and is therefore a                            
    connected person (as defined under the Listing Rules)                     
    of the Company.                                                           
                                                                              
    The Staff Quarters Lease Agreement constitutes a                          
    continuing connected transaction of the Company                           
    exempt from the reporting, announcement and                               
    independent shareholders' approval requirements                           
    under Rule 14A.33(3) of the Listing Rules. The Land                       
    Lease Agreement and the Supply Agreement constitute                       
    continuing connected transactions of the Company                          
    exempt from the independent shareholders' approval                        
    requirements under Rule 14A.34 of the Listing Rules.                      
                                                                              
    Principal terms of the Land Lease Agreement                               
                                                                              
    On 10th December, 1999, Shan Hai, an indirect                             
    95%-owned subsidiary of the Company, entered into the                     
    Land Lease Agreement to lease a parcel of land of a                       
    total site area of approximately 29,587.5 square                          
    meters located in Zhongshan of the PRC for GD                             
    Decorative to build and operate a factory thereon and                     
    to provide staff quarters and utilities to GD                             
    Decorative for a term commencing from 1st January,                        
    2000 and expiring on 30th April, 2028. The rate of                        
    rent payable by GD Decorative to Shan Hai for leasing                     
    of the land is to be determined by both parties from                      
    time to time by reference to the then prevailing                          
    market rent.                                                              
                                                                              
    The Directors estimate that the aggregate annual                          
    amount of rent for leasing of the land to be paid by                      
    GD Decorative to Shan Hai will not exceed HK$1,600,000                    
    for each of the 3 years ending 31st December, 2007.                       
    Such cap was determined by reference to previous                          
    transactions after considered the historical amount                       
    of rent for leasing of the land paid by GD Decorative                     
    to Shan