CHINA ORIENTAL GROUP COMPANY LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
CHINA ORIENTAL GROUP COMPANY LIMITED
中 國 東 方 集 團 控 股 有 限 公 司 *（ incorporated in Bermuda with limited liability）
（Stock code：581）
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CONTINUING CONNECTED TRANSACTIONS BETWEEN
JINXI LIMITED AND
LONGBA CHARGING
- CONTINUING CONNECTED TRANSACTIONS BETWEEN
Continuing Connected Transactions Between Jinxi Limited and Longba Charging
Reference is made to the announcement of the Company dated 27 December 2012 pursuant to which, it was stated, inter alia, that the existing annual cap for the continuing connected transactions between Jinxi Limited and Longba Charging for each of the three years ending 31 December 2013, 2014 and 2015 will not exceed RMB180,000,000, RMB180,000,000 and RMB180,000,000 respectively. The Existing Longba Framework Agreement was expired on 31 December 2015.
The Board hereby announces that on 29 January 2016, Jinxi Limited entered into the Renewal Longba Framework Agreement with Longba Charging for a further term of three years commencing from 1 January 2016 and expiring on 31 December 2018.
It is expected that the proposed Longba Annual Cap for the continuing connected transactions contemplated under the Renewal Longba Framework Agreement for each of the three years ending 31 December 2016, 2017 and 2018 will not exceed RMB130,000,000, RMB130,000,000 and RMB130,000,000 respectively.
The proposed Longba Annual Cap has been determined after taking into account (i) the historical transaction figures under the Existing Longba Framework Agreement; (ii) the expected year-on-year iron and steel production capacity of the Group; and (iii) the expected fluctuation in the market prices of lime products in the forthcoming next three years.
Continuing Connected Transactions Between Jinxi Limited and Pingquan County Jinyin
Reference is made to the announcement of the Company dated 27 December 2012 pursuant to which, it was stated, inter alia, that the existing annual cap for the continuing connected transactions between Jinxi Limited and Pingquan County Jinyin for each of the three years ending 31 December 2013, 2014 and 2015 will not exceed RMB7,500,000, RMB7,500,000 and RMB7,500,000 respectively. The Existing Pingquan Framework Agreement was expired on 31 December 2015.
The Board hereby announces that on 29 January 2016, Jinxi Limited entered into the Renewal Pingquan Framework Agreement with Pingquan County Jinyin for a further term of three years commencing from 1 January 2016 and expiring on 31 December 2018.
It is expected that the proposed Pingquan Annual Cap for the continuing connected transactions contemplated under the Renewal Pingquan Framework Agreement for each of the three years ending 31 December 2016, 2017 and 2018 will not exceed RMB7,500,000, RMB7,500,000 and RMB7,500,000 respectively.
The proposed Pingquan Annual Cap has been determined after taking into account (i) the expected year-on-year iron and steel production capacity of the Group; (ii) the estimated quantity of lime products to be purchased from Pingquan County Jinyin by Jinxi Limited in the next three years; and (iii) the expected fluctuation in the market prices and demand of lime products in the forthcoming next three years.
Implication under the Listing Rules
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, each of Longba Charging and Pingquan County Jinyin and their respective ultimate beneficial owner(s) are connected persons of the Company according to the Listing Rules. Thus the transactions contemplated under each of the Renewal Longba Framework Agreement and the Renewal Pingquan Framework Agreement constitute continuing connected transactions for the Company under the Listing Rules respectively.
As each of the applicable percentage ratios (other than the profits ratio) in respect of the proposed Longba Annual Cap under the Renewal Longba Framework Agreement is on an annual basis more than 1% but less than 5%, the continuing connected transactions contemplated under the Renewal Longba Framework Agreement are subject to the reporting, announcement and annual review requirements and are exempt from the independent shareholders' approval requirement pursuant to Rule 14A.76(2) of the Listing Rules.
Each of the applicable percentage ratios (other than the profits ratio) in respect of the proposed Pingquan Annual Cap under the Renewal Pingquan Framework Agreement is on an annual basis less than 1% and the transaction is a connected transaction only because it involves connected person at the subsidiary level, the continuing connected transactions contemplated under the Renewal Pingquan Framework Agreement are exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.76(1) of the Listing Rules.
However, as both Longba Charging and Pingquan County Jinyin are associates of Mr. Du Chun and Mr. Du Chun is a connected person of the Company, the continuing connected transactions contemplated under the Renewal Longba Framework Agreement are required to be aggregated with the continuing connected transactions contemplated under the Renewal Pingquan Framework Agreement under Rule 14A.81 of the Listing Rules.
As each of the applicable percentage ratios (other than the profits ratio) for the proposed Longba Annual Cap and the proposed Pingquan Annual Cap when aggregated is on an annual basis more than 1% but less than 5%, the continuing connected transactions contemplated under the Renewal Framework Agreements are subject to the reporting, announcement and annual review requirements and are exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.
The Board confirms that no Director has a material interest in the Renewal Framework Agreements and the continuing connected transactions contemplated thereunder and no Director has abstained from voting on the board resolution to approve the Renewal Framework Agreements and the transactions contemplated thereunder including the proposed Longba Annual Cap and the proposed Pingquan Annual Cap.
CONTINUING CONNECTED TRANSACTIONS BETWEEN JINXI LIMITED AND LONGBA CHARGING
INTRODUCTION
Reference is made to the announcement of the Company dated 27 December 2012 pursuant to which, it was stated, inter alia, that the existing annual cap for the continuing connected transactions between Jinxi Limited and Longba Charging for each of the three years ending 31 December 2013, 2014 and 2015 will not exceed RMB180,000,000, RMB180,000,000 and RMB180,000,000 respectively. The Existing Longba Framework Agreement was expired on 31 December 2015.
The Board hereby announces that on 29 January 2016, Jinxi Limited entered into the Renewal Longba Framework Agreement with Longba Charging for a further term of three years commencing from 1 January 2016 and expiring on 31 December 2018.
PRINCIPAL TERMS OF THE RENEWAL LONGBA FRAMEWORK AGREEMENT
Date of agreement 29 January 2016 Parties
Jinxi Limited (as purchaser); and
Longba Charging (as supplier)
Subject Matter
Jinxi Limited and/or its subsidiaries has agreed to purchase from Longba Charging and Longba Charging has agreed to sell to Jinxi Limited and/or its subsidiaries lime products.
Term
From 1 January 2016 to 31 December 2018
Price
The prices of lime products will be agreed following arm's length negotiations between Jinxi Limited and Longba Charging with reference to the prevailing market price and commercial terms. In determining the market price, the sourcing department of Jinxi Limited shall collect the relevant market information (including but not limited to the price for the same or similar type of lime products), review and compare the prices and commercial terms of transactions conducted in the most recent year of the same or similar type entered into with Longba Charging or at least two independent suppliers, and prepare fee quotes. It may need to further submit the fee quotes to the management of Jinxi Limited for review depending on the actual situations (such as the amount and size of the transaction). The Internal Control Department of Jinxi Limited will review the aforesaid sourcing operation on a periodical basis.
China Oriental Group Co. Ltd. issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 January 2016 11:28:30 UTC
Original Document: http://www.chinaorientalgroup.com/attachment/2016012919170200002422099_en.pdf
