At 31st March, 1997 the Group had capital commitment of approximately HK$2,266,000 in connection with investments in associated companies (1998: Nil).

The Company had no material capital commitments at the balance sheet date.

At the balance sheet date, the Group had annual commitments payable within the next year under non-cancellable operating leases in respect of rented premises as follows:

The Company had no material operating lease commitments at the balance sheet date.

The Group operates a defined contribution retirement benefits scheme for all qualified employees employed by the Group in Hong Kong. The assets of the scheme are held separately from those of the Group in funds under the control of trustees.

The retirement benefits cost charged to the profit and loss account represents contributions payable to the scheme by the Group at rates specified in the rules of the scheme. Where there are employees who leave the scheme prior to vesting fully in the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions.

At 31st March, 1998, the Group had no material forfeited contributions which arose upon employees leaving the retirement benefits scheme and which are available to reduce the contributions payable in future years (1997: nil).

Details of the Company's subsidiaries at 31st March, 1998 are as follows:

Notes:

1. The registered capital of this company at 31st March, 1998 was HK$32,000,000. The Group has an outstanding commitment to contribute a further sum of HK$5,246,857 into this subsidiary as equity capital.

2. The registered capital of this company at 31st March, 1998 was HK$20,000,000. The Group has an outstanding commitment to contribute a further sum of HK$15,950,421 into this subsidiary as equity capital.

3. The registered and paid up capital of this company had been increased from US$2,000,000 to US$5,000,000 during the year.

4. The deferred shares carry practically no rights to dividends or to receive notice of or to attend or vote at any general meeting of the respective companies or to participate in any distribution on winding up. The Company or a subsidiary of the Company has been granted an option by the holders of the deferred shares to acquire those deferred shares not held by the Group at a nominal amount.

Details of the Group's associated companies at 31st March, 1998 are as follows:

Note:

On 1st April, 1998, Lung Kee International Limited ("Lung Kee International") entered into various arrangements with the remaining shareholders of Lung Kee Metal (Malaysia) Sdn. Bhd. ("Lung Kee Malaysia") pursuant to which the 50% economic interest in Lung Kee Malaysia not registered in the name of Lung Kee International would be effectively surrendered to Lung Kee International. As Lung Kee International also has management control over this company, from 1st April, 1998 onwards Lung Kee Malaysia will be accounted for by Lung Kee International as a wholly-owned subsidiary for consolidation purpose.

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