09:59 EGANA JEWELLERY<00926> - Announcement (4) Transactions at HK$14,000,000 (the `Annual Cap for Trading Transactions') for a period from 1 January 2005 up to 31 May 2007, the table below shown the detailed information about the Annual Cap for Trading Transactions the Company proposed to be complied with for the relevant periods up to 31 May 2007:- For the period from 1 January HK$5,833,333 2005 to 31 May 2005 For the financial year ending HK$14,000,000 31 May 2006 For the financial year ending HK$14,000,000 31 May 2007 For the period from 1 January 2005 to 31 May 2007, as each of the percentage ratios is on an annual basis less than 2.5%, the Trading Transactions constituted as Continuing Connected Transactions under Rule 14A.34 of the Listing Rules which are only subject to the reporting and announcement requirements and are exempt from the independent Shareholders' approval requirements. Details of the Trading Transactions will be disclosed in the Company's 2005, 2006 and 2007 Annual Reports accordingly. The Annual Cap for the Trading Transactions has been determined by reference to the value of the Trading Transactions entered into with EganaGoldpfeil Group for the six months period ended 30 November 2004 of HK$6,537,458 which have been dropped by 34% (on an annualised basis) as compared to the aggregate value of the Trading Transactions of approximately HK$19,675,641 for the financial year ended 31st May, 2004. This was mainly due to the decrease in sales volume of jewellery products sold to EganaGoldpfeil Group through out the six months period ended 30 November 2004 since the customers' demand for jewellery products in EganaGoldpfeil Group was decreasing over the period. The Group expects that this trend will continue in the coming financial years. The Company will comply with the requirements under Rule 14A.36 of the Listing Rules if the aggregate value of the transactions during each of the three financial years ending 31 May 2007 exceeds the Annual Cap for the Trading Transactions or the percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules exceeds 2.5%. REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS The Continuing Connected Transactions have been entered with a view to enhancing cost and management efficiency of the Group, and to achieving synergies through a uniform global marketing plan and concept for both the timepiece and jewellery products under trademarks held by the Group and EganaGoldpfeil Group. In addition, they have been conducted in the ordinary and usual course of the business of the Group and on normal commercial terms. The Directors including the independent non-executive directors of the Company consider that the Continuing Connected Transactions have been entered in the ordinary and usual course of business of the Group, on normal commercial terms, are fair and reasonable and in the interests of the Shareholders of the Company as a whole. It is considered that the Continuing Connected Transactions are in line with the Group's objectives and help to enhance the business growth of the Group. Definitions `Company' Egana Jewellery & Pearls Limited `Continuing Connected The transactions under the Transactions' Management Service Agreement, the Trademark License and Assignment Agreement and the Trading Transactions Agreements entered between the Group and EganaGoldpfeil Group `Directors' the directors of the Company `EganaGoldpfeil Group' EganaGoldpfeil, together with its subsidiaries (other than the Group) `EganaGoldpfeil' EganaGoldpfeil (Holdings) Limited, which owns approximately 60% of the issued share capital of the Company `EIPL' Egana Investments (Pacific) Limited, a wholly owned subsidiary of the Company. The principal activity of EIPL is licensing business `Egana Schmuck' Egana Schmuck und Perlen GmbH, a wholly owned subsidiary of the Company. The principal activities of Egana Schmuck are design,