Emperor Capital Group Ltd. — Capital/Financing Update 2005

Mar 29, 2005

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.

LUKS INDUSTRIAL (GROUP) LIMITED 陸氏實業（集團）有限公司

(incorporated in Bermuda with limited liability)

(Stock Code: 366)

DISCLOSEABLE TRANSACTION

PROPOSED AGREEMENT FOR THE PURCHASE OF THE FACILITIES OF A CLINKERS’ PRODUCTION LINE TO BE INSTALLED IN VIETNAM

Best Deluxe Assets, a wholly-owned subsidiary of the Company entered into a conditional agreement with China National Aero-Technology on 23rd March 2005 in connection with the Purchase of the Facilities of a clinkers’ production line to be installed in Vietnam at a total consideration of US$10.709 million (approximately HK$83,530,200.00), subject to the terms and conditions set out in the Agreement.

The Agreement constitutes a discloseable transaction of the Company pursuant to Chapter 14 of the Listing Rules. A circular containing details of the transaction will be despatched to the Shareholders as soon as practicable.

THE AGREEMENT

Date: 23 March 2005 Parties: (1) Best Deluxe Assets, a wholly-owned subsidiary of the Company; and (2) China National Aero-Technology To the best knowledge, information and belief of the Directors having made all reasonable enquiries, China National AeroTechnology and its ultimate beneficial owner are third parties independent of the Company and its subsidiaries and connected persons (as defined in the Listing Rules ) of the Company and its subsidiaries. the Purchase

Subject matter:

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Consideration:

The consideration is US$10.709 million (approximately HK$83,530,200.00) which will be satisfied by payments in cash and Letters of Credit respectively as follows:

• (1) a cash deposit of US$3,212,700.00 (approximately HK$25,059,060.00) representing 30% of the total Consideration which will be payable within 30 days from the date of signing the Agreement and upon the receipt of Letter of Undertaking by Best Deluxe Assets;

• (2) Best Deluxe Assets will deliver to China National AeroTechnology the First Letter of Credit for the sum of US$3,748,150.00 (approximately HK$29,235,570.00) representing 35% of the total Consideration within 60 days from the date of the signing of the Agreement; and

• (3) Best Deluxe Assets will deliver to China National AeroTechnology the Second Letter of Credit for the sum of US$3,748,150.00 (approximately HK$29,235,570.00) representing the balance of the total Consideration immediately before the delivery of the first batch of the Facilities by China National Aero-Technology.

To guarantee the issuing of the Letters of Credit by Best 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 AeroTechnology. 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 to the Agreement

The Agreement is conditional, inter alia, upon:

• (i) the receipt by Best Deluxe Assets of the Letter of Undertaking;

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• (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 reached the maximum capacity of the existing plant. It is anticipated that after the completion of the installation of the Facilities at the plant of Luks Cement (Vietnam), the maximum capacity of producing clinkers and cement of the Group is expected to be increased by approximately 500,000 tonnes per annum representing approximately 60% increase and thus enhance the Group’s earning base.

The Board considers that the transaction is on normal commercial terms and the terms and conditions of the Agreement to be fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

GENERAL

The Agreement constitutes a discloseable transaction of the Company pursuant to Chapter 14 of the Listing Rules. A circular containing details of the transaction will be despatched to the Shareholders as soon as practicable.

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DEFINITIONS
“Agreement”	the agreement entered into between Best Deluxe Assets
	and China National Aero-Technology on 23rd March
	2005 for the purchase of the Facilities of a 1750TPD
	(tonnes per day) clinkers’ (semi-finished cement products)
	production line to be installed in the plant of Luks
	Cement (Vietnam) in Vietnam
“Best Deluxe Assets”	Best Deluxe Assets Limited, a limited company
	incorporated in the British Virgin Islands and a wholly
	owned subsidiary of the Company, with its registered
	office at Offshore Incorporations Limited, P.O. 957,
	Offshore Incorporations Centre, Road Town, Tortola,
	British Virgin Islands.
“Board”	the board of Directors
“Company”	Luks Industrial (Group) Limited, a company incorporated
	in Bermuda with limited liability, the shares of which are
	listed on the Stock Exchange
“China National	China National Aero-Technology Import & Export
Aero-Technology”	Corporation Beijing Company (中國航空技術進出口
	北京公司), a company incorporated in PRC with its
	registered office at 19/F., CATIC PLAZA, 18 Beichen
	Dong Street, Chaoyang District, Beijing, 100101 China
“Consideration”	US$10.709 million (approximately HK$83,530,200.00),
	the consideration to be paid for the Purchase pursuant to
	the Agreement
“Director(s)”	the director(s) of the Company
“Facilities”	the equipments, machineries and parts in connection with
	the clinkers’ production line with details as set out in the
	Agreement
“First Letter of Credit”	the unconditional and irrevocable Letter of Credit which
	Best Deluxe Assets will arrange with a third party bank
	for the opening in favour of China National Aero-
	Technology with validity period of 6 months from the
	date of issue for the sum of US$3,748,150.00
	(approximately HK$29,235,570.00)
“Group”	the Company and its subsidiaries
“HKSAR”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Letters of Credit”	the First Letter of Credit and the Second Letter of Credit

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“Letter of Undertaking”	the letter of undertaking issued by China National Aero-
	Technology’s bank for guaranteeing the refund to Best
	Deluxe Assets of the cash deposit for the sum of
	US$3,212,700.00 (approximately HK$25,059,060.00)
	received by China National Aero-Technology if it fails to
	make delivery to Best Deluxe Assets of the first batch of
	the Facilities within 6 months from the conditions
	precedent having been fully complied with pursuant to
	the terms of the Agreement
“Listing Rules”	the Rules Governing the Listing of Securities on the
	Stock Exchange
“Luks Cement (Vietnam)”	Luks Cement (Vietnam) Limited, a limited company
	incorporated and operating in accordance with the laws
	of Vietnam, formerly known as Luks Thua Thien Hue
	Company Limited, which was a 68.10% indirectly owned
	by the Company before the acquisition, details of the said
	acquisition are set out in the announcement made by the
	Company on 13th October 2004. It is expected that after
	the completion of the acquisition, the Company will own
	indirectly 90.27% of the company. The principal business
	of Luks Cement (Vietnam) is engaged in manufacturing
	and sale of cement for use in the construction industry in
	Vietnam
”PRC”	the People’s Republic of China, and for the purposes of
	this announcement, excluding Hong Kong, the Macau
	Special Administrative Region and Taiwan
“Purchase”	the supply of Facilities and installation of a 1,750TPD
	linkers’ production line at the plant of Luks Cement
	(Vietnam) in Vietnam subject to the terms and conditions
	of the Agreement as set out in the Agreement
“Second Letter of Credit”	the unconditional and irrevocable Letter of Credit which
	Best Deluxe Assets will arrange with a third party bank
	for the opening in favour of China National Aero-
	Technology and which will be valid from the date of issue
	to 30 September 2006 for the sum of US$3,748,150.00
	(approximately HK$29,235,570.00)
“Shareholder(s)”	holder(s) of the Shares of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	United States dollars, the lawful currency of the United
	States

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“Vietnam”

the Socialist Republic of Vietnam

By Order of the Board Luks Industrial (Group) Limited Luk King Tin Chairman

As at the date of this announcement, the Board composition is set out below:

Hong Kong, 24 March 2005

Executive Directors: Independent non-executive Directors: Mr. Luk King Tin Mr. Liu Li Yuan Ms Cheng Cheung Mr. Liang Fang Mr. Luk Yan Mr. Chan Yuk Tong Mr. Fan Chiu Tat, Martin

For the purpose of this announcement, unless otherwise stated, the exchange rate adopted is for Hong Kong dollar to US dollar is US$1 to HK$7.8.

Please also refer to the published version of this announcement in China Daily.

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