09:53     INNOVO<00703> - 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.                                                     
                                                                              
    Leisure Recreation Holdings Limited                                       
    *                                                                         
    (Incorporated in Bermuda with limited liability)                          
    Stock code: 703                                                           
                                                                              
    DISCLOSEABLE TRANSACTION                                                  
                                                                              
    FORMATION OF A NEW CONTRACTUAL JOINT VENTURE                              
                                                                              
    Financial adviser                                                         
                                                                              
    ACCESS CAPITAL                                                            
                                                                              
    The Agreement                                                             
    On 17 May 2005, Infotower, an indirect wholly-owned                       
    subsidiary of the Company, has entered into the                           
    Agreement with the CJV Partner, an independent third                      
    party, to establish a contractual joint venture for                       
    the purpose of establishing and operating an                              
    amusement park to be erected on a piece of land located                   
    at Taishan, the PRC.                                                      
                                                                              
    Under the Agreement, parties to the CJV shall                             
    respectively make the following contribution to the                       
    CJV:                                                                      
                                                                              
    a)      Infotower: to build and operate the amusement park                
    on the Land during the Term and to provide the                            
    necessary rides and equipment according to the Budget;                    
    and                                                                       
                                                                              
    b)      the CJV Partner: to provide the CJV a right to use                
    the Land at rent free during the Term.                                    
                                                                              
    The percentage shares of the parties to the CJV for                       
    the net profit after tax of the CJV shall initially                       
    be 60% for Infotower and 40% for the CJV Partner.                         
                                                                              
    The CJV shall be for a term of 10 years from the                          
    Effective Date unless terminated in accordance with                       
    the terms of the Agreement and subject to extension                       
    by the parties to the CJV in writing.                                     
                                                                              
    According to the Budget (which is prepared by                             
    Infotower), the initial cash outlay for constructing                      
    and establishing the amusement park on the Land                           
    (within a period of around six months from the                            
    Effective Date) will be approximately RMB13.8 million                     
    (approximately HK$12.9 million). Such amount will be                      
    responsible by Infotower and is estimated based on                        
    the various costs for erecting the amusement park on                      
    the Land, including the construction cost and the cost                    
    for leasing machine rides.                                                
                                                                              
    Further details of the Agreement regarding the                            
    formation of the CJV is set out below.                                    
                                                                              
    General                                                                   
    The transaction contemplated under the Agreement                          
    constitutes a discloseable transaction for the                            
    Company under Rule 14.08 of the Listing Rules.                            
                                                                              
    A circular containing, among other things, further                        
    details of the Agreement, will be sent to the                             
    Shareholders as soon as practicable.