Shanghai Dasheng Agrcltr Fin Tech : Announcements and Notices - VOLUNTARY ANNOUNCEMENT IN RELATION TO COOPERATION AGREEMENT

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(Formerly known as 上海棟華石油化工股份有限公司 Shanghai Tonva Petrochemical Co., Ltd.*) (a joint stock company established in the People's Republic of China with limited liability)

(Stock code: 1103)

VOLUNTARY ANNOUNCEMENT IN RELATION TO COOPERATION AGREEMENT

This is a voluntary announcement made by the Company for keeping the Shareholders and the potential investors informed of the latest business development of the Company.

Cooperation Agreement

The Board is pleased to announce that on 16 January 2016, D.S Financial Holding, a direct wholly- owned subsidiary of the Company, entered into the Cooperation Agreement with Shanghai Runtong and Zhenjiang Market in relation to the cooperation among D.S Financial Holding, Shanghai Runtong and Zhenjiang Market for the formation and business operation of the JV Data Company.

This is a voluntary announcement made by the Company for keeping the Shareholders and the potential investors informed of the latest business development of the Company.

COOPERATION AGREEMENT

Further to the cooperation agreement in relation to the cooperation among D.S. Financial Holding, Shanghai Runtong and Huzhou Zhebei Agricultural By-products Trading Center Co., Ltd.*, as announced by the Company on 14 January 2016, the Board is pleased to announce that on 16 January 2016, D.S Financial Holding, a direct wholly-owned subsidiary of the Company, also entered into the Cooperation Agreement, with Shanghai Runtong and Zhenjiang Market in relation to the cooperation among D.S Financial Holding, Shanghai Runtong and Zhenjiang Market for the formation and business operation of the JV Data Company.

• For identification purpose only

  Parties :	(1)	Shanghai Runtong;
  (2)	Zhenjiang Market; and
  (3)	D.S Financial Holding, a direct wholly-owned subsidiary of the Company

  The brief details of the Cooperation Agreement are summarised as follows: Date : 16 January 2016

  
  

  Term : 10 years

  
  

  Shanghai Runtong

  
  

  As disclosed in the Acquisition Announcement, the Company will acquire entire equity interest of Shanghai Kaiyi subject to completion of the acquisition of Shanghai Kaiyi. Upon completion of the acquisition of the entire equity interest of Shanghai Kaiyi by the Company, Shanghai Kaiyi will become a direct wholly-owned subsidiary of the Company and Shanghai Runtong will become an indirect non-wholly owned subsidiary of the Company as to 80% equity interest.

  
  

  Zhenjiang Market

  
  

  As advised by Zhenjiang Market, Zhenjiang Market is a company established under the laws of the PRC with limited liability and it is principally engaged in, among other things, wholesale and retail of packaged food products and frozen food products. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, Zhenjiang Market and its ultimate beneficial owners are the Independent Third Parties.

  
  

  Pursuant to the Cooperation Agreement, there are three main underlying cooperation arrangements in relation to the formation and business operation of the JV Data Company subject to the terms of the Cooperation Agreement:-

  
  

• the JV Data Company will be formed with registered capital as to 49% held by Shanghai Runtong and 51% held by Zhenjiang Market;

  
  

• the JV Data Company will provide the Transaction Data to D.S Financial Holding for fee; and

  
  

• Shanghai Runtong will provide the JV Data Company with operation and maintenance service of the back-office operating system (後台運營系統) of the JV Data Company.

Diagram of the relationship among the parties in the Cooperation Agreement

The following simplified diagram illustrates (i) the relationship between the Company and parties under the Cooperation Agreement; and (ii) the three main underlying arrangements under the Cooperation Agreement among Shanghai Runtong, D.S Financial Holding and Zhenjiang Market:

Company

100%

Shanghai Kaiyi

D.S Financial Holding

Zhenjiang Market

80%

Shanghai

Runtong (2)

(1)

(2) (1)

49%

JV Data Company

51%

Shareholdings as of the date of this announcement

Shareholdings upon completion of the acquisition of Shanghai Kaiyi by the Company as disclosed in the Acquisition Announcement

Underlying Arrangements under the Cooperation Agreement

Notes:

1. Formation of JV Data Company by Shanghai Runtong and Zhenjiang Market;

   
   

2. Provision of Transaction Data by the JV Data Company to D.S Financial Holding; and

   
   

3. Provision of operation and maintenance service of the back-office operating system of the JV Data Company by Shanghai Runtong to the JV Data Company

1. Formation of JV Data Company

   
   

   Pursuant to the terms of the Cooperation Agreement, the registered capital of the JV Data Company proposed to be formed shall be RMB10,000,000, of which: -

   
   

2. Shanghai Runtong shall contribute RMB4,900,000, in the form of non-cash assets, representing 49% of the registered capital; and

   
   

3. Zhenjiang Market shall contribute RMB5,100,000, in the form of non-cash assets, representing 51% of the registered capital.

   Upon the JV Data Company is formed, the JV Data Company will establish an electronic settlement and e-commerce system suitable for the transactions of Zhenjiang Market so that Zhenjiang Market can be provided with the relevant settlement and financial service. If the JV Data Company is not formed by 31 March 2016, the Cooperation Agreement shall lapse on 1 April 2016 and none of the parties of the Cooperation Agreement shall make any claims against any other party.

   
   

   The JV Data Company will be principally engaged in the businesses of, among other things, development and sale of the computer software and technology information consultation and financial service.

   
   

4. Transaction Data to be provided by the JV Data Company to D.S Financial Holding or a company controlled by D.S Financial Holding

   
   

   Upon the JV Data Company has set up the electronic transaction and settlement system, the JV Data Company will use such system to collect and accumulate the Transaction Data, which will be used as the bases for building up the Credit Information gradually.

   
   

   Pursuant to the Cooperation Agreement, the JV Data Company will provide the Transaction Data and the Credit Information to D.S Financial Holding for fee. D.S Financial Holding will utilise the Transaction Data to identify potential clients in Zhenjiang Market for providing its finance service and receive finance service fee in return. As the provision of Transaction Data by the JV Data Company to D.S Financial Holding is within the business scope of the technology information consultation and financial service of the JV Data Company, the said provision of Transaction Data will be an ordinary business of the JV Data Company. Therefore, this arrangement will not constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules.

   
   

5. Operation and Maintenance Service to be provided by Shanghai Runtong to the JV Data Company




Pursuant to the Cooperation Agreement, Shanghai Runtong will provide the JV Data Company the operation and maintenance service of the back-office operating system (後台運營系統) of the JV Data Company for service fee. The service fee will be subject to the negotiations between Shanghai Runtong and the JV Data Company with reference of the actual amount of the transactions taken place in Zhenjiang Market. The provision of the operation and maintenance service is an ordinary business of Shanghai Runtong.