NVC LIGH 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.
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 2222)Reference is made to the 2012 Announcement and 2013 Announcements, in which the Company set out detailed information in relation to certain continuing connected transactions, including, among others, the transactions between the Group and (1) ETIC, and (2) Mr. Wu Jiannong's associates which are governed under various agreements.
As these agreements entered between the Group and (1) ETIC, and (2) Mr. Wu Jiannong's associates expired on 31 December 2015 and the Group intends to continue carrying out such transactions in the ordinary and usual course of business with the relevant parties, the Group therefore entered into the following renewed agreements with the relevant parties on 22 January 2016:
the ETIC Purchase Agreement
the ETIC Licensing Agreement
the Raw Material Purchase Agreement
the Youhe Purchase Agreement
On 22 January 2016, the Company also entered into the Lease Agreement I and Lease Agreement II with ETIC, pursuant to which the Group agrees to lease certain properties from/to ETIC.
As at the date of this announcement, ETIC is a substantial shareholder of the Company holding approximately 27.03% of the Company's share capital and is therefore a connected person of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions between the Group and ETIC constitute connected transactions of the Company under the Listing Rules.
As at the date of this announcement, Mr. WU Jiannong is a director and a substantial shareholder of Zhejiang NVC, a subsidiary of the Company, thus Mr. Wu Jiannong and his associates are connected persons of the Company under Chapter 14A of the Listing Rules. Accordingly, the transactions between the Group and Mr. Wu Jiannong and his associates constitute connected transactions of the Company under the Listing Rules.
As one or more of the applicable Percentage Ratios calculated based on the annual caps of considerations under the Agreements is more than 0.1% but less than 5%, the transactions under the Agreements are subject to the reporting, announcement and annual review requirements, but are exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
Reference is made to the 2012 Announcement and 2013 Announcements in relation to certain continuing connected transactions between the Group and (1) ETIC, and (2) Mr. Wu Jiannong's associates which are governed by various agreements.
As these agreements entered between the Group and (1) ETIC, and (2) Mr. Wu Jiannong's associates expired on 31 December 2015 and the Group intends to continue carrying out such transactions in the ordinary and usual course of business with the relevant parties, the Group therefore entered into the following renewed agreements with the relevant parties on 22 January 2016:
the ETIC Purchase Agreement
the ETIC Licensing Agreement
the Raw Material Purchase Agreement
the Youhe Purchase Agreement
On 22 January 2016, the Company also entered into the Lease Agreement I and Lease Agreement II with ETIC, pursuant to which the Group agrees to lease certain properties from/to ETIC.
RENEWAL OF EXISTING CONTINUING CONNECTED TRANSACTIONS-
The ETIC Purchase Agreement
Principal Terms of the ETIC Purchase Agreement: Parties: The Company and ETIC
Transaction: Pursuant to the ETIC Purchase Agreement, the Group agrees to purchase finished products and raw materials including but not limited to LED chips and LED lamp products from ETIC and its Affiliates on a non-exclusive basis. The quality, quantity and technical standards of the products delivered by ETIC and its Affiliates must meet the Company's standards as set out in the sub-contract for each purchase order.
Pricing: The prices charged by ETIC and its Affiliates will be agreed following arm's length negotiations between the parties with reference to the prevailing market price. In determining the market price, the business department of the relevant subsidiary of the Company shall collect the relevant market information (including but not limited to the price for the same or similar type of finished products and raw materials), review and compare the costs and profits of transactions conducted in the most recent year of the same or similar type entered into with ETIC or at least two independent third parties, and prepare fee quotes for review by the marketing department of the relevant subsidiary of the Company, and the marketing department of the relevant subsidiary may need to further submit the fee quotes to the management of such subsidiary for review depending on the actual situations (such as the amount and size of the transaction).
Term of the Agreement:
The term of the ETIC Purchase Agreement is three years commencing from 1 January 2016.
Historical Amounts
The existing annual caps for the amount payable by the Group under the original ETIC Purchase Agreement for the years ended 31 December 2013, 2014 and 2015 are RMB130 million, RMB170 million and RMB170 million, respectively. The actual amount paid/payable by the Group under the original ETIC Purchase Agreement for the years ended 31 December 2013, 2014 and nine months ended 30 September 2015 were RMB3.51 million, RMB108.10 million and RMB81.39 million, respectively.
Proposed Annual Caps
The proposed annual caps of the purchase price payable by the Group under the ETIC Purchase Agreement for each of the three years ending 31 December 2016, 2017 and 2018 are RMB100 million, RMB100 million and RMB100 million, respectively. In determining the above annual caps, the Board took into account historical data on purchasing similar products from other suppliers, the expected future demand of the Group on the relevant products and the expected market prices of the LED chips and LED lamp products.
Reasons for and Benefits of the ETIC Purchase Agreement
The Company entered into the ETIC Purchase Agreement given the Group has a continuous demand for such finished products and raw materials in the next three years and the fees charged by ETIC and its Affiliates are competitive.
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The ETIC Licensing Agreement
Principal Terms of the ETIC Licensing Agreement: Parties: Huizhou NVC and ETIC
Transaction: Pursuant to the ETIC Licensing Agreement, Huizhou NVC grants ETIC, a non-transferrable right to use certain registered trademarks of Huizhou NVC, including "NVC" and "雷士", as well as granting ETIC the right to use the Group's registered trademark in combination with ETIC's own brand as "NVCETI" and "雷士德豪" on ETIC's LED lamp products. The licensing is worldwide but is exclusive only on certain ETIC's LED lamp products.
Licensing Fee: The trademark licensing fee is agreed based on arm's length negotiations and is on normal commercial terms. It will be calculated based on the following:
3% of ETIC's sales of products using licensed trademarks "NVC" and "雷士" with an annual cap of RMB30 million for each year of 2016, 2017 and 2018; and
1% of ETIC's sales of products using the trademark "NVCETI" and "雷士德 豪" with an annual cap of RMB25 million for each year of 2016, 2017 and 2018.
Notwithstanding the above, under no circumstances shall the annual trademark licensing fee payable by ETIC be lower than RMB8 million. The licensing fee for the previous year will be paid by ETIC prior to 20 February each year.
Term of the Agreement:
The term of the ETIC Licensing Agreement is three years commencing from 1 January 2016.
Historical Amounts
The existing annual caps for the amount receivable by the Group under the original ETIC Licensing Agreement for the years ended 31 December 2013, 2014 and 2015 are RMB16 million, RMB27 million and RMB55 million, respectively. The actual amount received/receivable by the Group under the original ETIC Licensing Agreement for the years ended 31 December 2013, 2014 and nine months ended 30 September 2015 were RMB0.90 million, RMB8.03 million and RMB5.03 million, respectively.
NVC Lighting Holding Limited issued this content on 2016-01-24 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2016-01-24 10:36:18 UTC
Original Document: http://www.nvclighting.todayir.com/attachment/2016012418320100002417835_en.pdf
