IMPLICATIONS UNDER THE LISTING RULES As at the date hereof, Xxxxxx is a substantial shareholder of the Company and is therefore regarded as a connected person of the Company under the Listing Rules. Accordingly, the transactions contemplated under the Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. Since each of the applicable percentage ratios in respect of the Annual Caps for the transactions contemplated under the Framework Agreement is more than 5% and the annual consideration will exceed HK$10,000,000, the transactions contemplated under the Framework Agreement constitutes non-exempt continuing connected transaction for the Company under the Listing Rules and are subject to reporting, announcement and Independent Shareholders’ approval requirements of the Listing Rules. A SGM will be convened at which resolution(s) will be proposed to seek Independent Shareholders’ approval for the Framework Agreement and the Annual Caps. Zensho, which has material interest in the transactions contemplated under the Framework Agreement, will be required to abstain from voting at the SGM. As at the date hereof, Zensho holds 47,715,000 Shares, representing approximately 11.02% of the total issued share capital of the Company. At the SGM, votes will be taken by way of poll. The Independent Board Committee comprising all independent non-executive Directors will be established by the Board (i) to advise the Independent Shareholders as to whether the terms of the Framework Agreement and the Annual Caps are fair and reasonable and whether the entering into of the Framework Agreement is in the interest of the Company and the Shareholders as a whole; and (ii) to advise the Independent Shareholders on how to vote on the resolutions to be proposed at the SGM taking into account the recommendation of the Independent Financial Adviser. It is expected that a circular containing, among other things, further details of the Framework Agreement, a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, a letter of advice containing the recommendations of the Independent Board Committee and a notice of the SGM will be despatched to the Shareholders in accordance with the Listing Rules on or about 17 February 2015. So far as the Directors are aware, save for Zensho, which is a party to the Framework Agreement and is a substantial shareholder of the Company, no other Shareholder has a material interest in the Framework Agreement and is required to abstain from voting at the SGM.
