REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. COSCO Finance is a non-bank financial institution approved and regulated by the PBOC and the CBRC and is engaged in providing financial services to members of the COSCO Group. The deposit interest rates and the lending rates offered by COSCO Finance to the Group will be equal to or more favourable to the Group than those offered by commercial banks in the PRC to the Group for comparable deposits or, as the case may be, loans. The Financial Services Master Agreement is therefore expected not only to provide the Group with a new means of financing but also to improve the efficiency of the use of its funds through higher interest income and lower costs of financing. The Group also expects to be in a better position to manage the security of its funds since COSCO Finance is not considered to be exposed to any significant capital risk. For the avoidance of doubt, the Financial Services Master Agreement does not preclude the Group from using the services of other financial institutions. The Group still has the freedom to select any major and independent PRC commercial banks as its financial services providers as it thinks fit and appropriate for the benefit of the Group. Xx. XX Xxxxxxx, the Chairman of the Board and a Non-executive Director, is a director and the president of COSCO, a holding company of COSCO Finance. Xx. XXXX Xxxxxxxx, an Executive Director, is a director of COSCO Finance. Each of Xx. XX Xxxxxxx and Xx. XXXX Xxxxxxxx has abstained from voting on the relevant board resolutions of the Company approving the Financial Services Master Agreement. None of the other Directors has a material interest in the Financial Services Master Agreement, but Dr. FAN XXX Xxx Xxx, Xxxx, an Independent Non-executive Director, has voluntarily abstained from voting on the relevant board resolutions of the Company approving the Financial Services Master Agreement for the reason that she is also an independent non-executive director of China COSCO, a subsidiary of COSCO. The Directors (including the Independent Non-executive Directors) (other than the three Directors who have abstained from voting on the relevant board resolutions approving the Financial Services Master Agreement as referred to above) consider that the Financial Services Master Agreement is entered into in the ordinary and usual course of business of the Group on normal commercial terms and that the terms of the Financial Services Master Agreement are fair and reasonable and are in the interests of the C...
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Group has consistently applied conservative treasury policies in its cash and financial management. Since the global financial crisis in 2008, the returns available on surplus liquidity have been low. In reviewing the Group’s investment and treasury strategy, the possibility of investing in longer dated instruments, particularly corporate bonds of good quality is considered. The Directors consider it prudent and in the interests of the Company and the Shareholders as a whole to continue to have the flexibility of being able to invest in debt securities issued by corporations which may be classified as connected persons of the Company, as among other things, the Directors are more familiar with the business, management and credit standing of such companies than they would normally be for arm’s length companies. With a view to maintaining an appropriately balanced portfolio of financial investments and be consistent with its conservative treasury policies in its cash and financial management, certain protections and limitations are proposed in the terms of the Master Agreement with a view to setting a sound framework for a liquidity investment policy applicable to Connected Debt Securities which may be acquired during the Term, which should improve the Group’s returns while keeping increased risks within prudent limits. Xxxxxxxx has been appointed as the Independent Financial Adviser to advise the Board on the terms of the Master Agreement. The Board (including the Independent Non-executive Directors) and the Independent Financial Adviser consider the terms of the Master Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Group has received proceeds from the spin-off disposal of its electricity business in Hong Kong in January 2014, and expects to deploy such proceeds to seek acquisitions in the global power industry. Pending the materialisation of such acquisitions, it continues to receive return from its global power investments and has accumulated surplus liquidity. The Group has consistently adopted a conservative treasury policy in its cash and financial management. To achieve effective risk control and minimise the cost of funding, the Group’s treasury activities are centralised. The Group’s treasury function oversees the Group’s investment activities. Cash resources were normally placed as bank deposits and had a balance of approximately HK$61.291 billion as at 31 December 2014. Since the returns available on surplus liquidity have been low, the possibility of investing into longer dated instruments, particularly corporate bonds of good quality is considered to enhance the quality of the Group’s investment and treasury strategy. The Directors consider it to be in the interests of the Company and the Shareholders as a whole to have the flexibility of being able to invest in debt securities issued by corporations which may be classified as connected persons of the Company since, amongst other things, the Directors are more familiar with the business, management and credit standing of such companies than they would normally be for other companies. As it would be imprudent to put all or even a majority of Group’s liquidity into such debt securities, protections and limitations are proposed in the Master Agreement and in the resolution for granting the CCT Approval to be sought from the Independent Shareholders with a view to setting a sound framework for a liquidity investment policy applicable to Connected Debt Securities which may be acquired in the Term, which should improve the Group’s returns while keeping increased risks within prudent limits. Having regard to the terms of the Master Agreement, the Board (excluding the Independent Non- executive Directors who will opine on the transactions contemplated under the Master Agreement after taking into account the advice to be received from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders) considers the terms of the Master Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Property Management Framework Agreement provides a formal and unified framework for the provision of Property Management Services by the Group to Anhui Wan Tou and its associates. The transactions contemplated under the Property Management Framework Agreement will be carried out in the usual and ordinary course of business of the Group, such transactions are expected to enhance the Group’s growth and business development and thus generate revenue for the Group. The Directors (including the independent non-executive Directors) are of the view that the terms of the Property Management Framework Agreement, the transactions contemplated thereunder and the Annual Caps in respect thereof are on normal commercial terms or better, are fair and reasonable and in the interests of the Company and the Shareholders as a whole and that the entering into and carrying out of the transactions contemplated under the Property Management Framework Agreement by the Group is in the ordinary and usual course of business of the Company. INFORMATION ON THE GROUP, ANHUI WAN TOU AND ITS ASSOCIATES The Group is principally engaged in the provision of a wide range of property management services including but not limited to engineering, repair and maintenance services, customer services, security services, and cleaning and gardening services and value-added services including various kinds of consultancy services relating to or ancillary to property management by the Group in the PRC. Xxxxx Xxx Xxx and its associates are principally engaged in the business of property development in the region of Anhui, the PRC. IMPLICATIONS UNDER THE LISTING RULES As Anhui Wan Tou is a substantial shareholder of Anhui Bund, a non wholly-owned subsidiary of the Company, it is a connected person of the Company at the subsidiary level, transactions under the Property Management Framework Agreement constitute continuing connected transactions of the Company under the Listing Rules. As the Board (including all the independent non-executive Directors) have confirmed that the transactions under the Property Management Framework Agreement are on normal commercial terms or better and conducted in the ordinary and usual course of business of the Group, are fair and reasonable and in the interests of the Company and the Shareholders as a whole, pursuant to Rule 14A.101 of the Listing Rules, the transactions under the Property Management Framework Agreement and the proposed Annual Caps for such transactions ...
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Composite Services under the Composite Services Framework Agreement are necessary for the normal day to day operations of the respective power plants and offices of the Employers. The repair and maintenance services required for the power plants are highly-technical in nature and can only be carried out by engineers and technicians equipped with the relevant technical skills and specialized knowledge. The Service Providers not only have the relevant technical expertise but also specific in-depth knowledge of the power generating units and related power generation facilities of the Company’s relevant power plants. In addition, the specialized experience of the Service Providers in handling and transporting fuel, chemicals and waste will ensure that the various processes as well as the subsequent disposal of waste are undertaken in compliance with the relevant PRC regulations. Since the Service Providers are all conveniently located in close proximity to the relevant power plants and offices of the Employers, entrusting them to provide the required services is relatively cheaper than our anticipated operating costs for self-running. As such, entering into the Framework Agreement can further save the Group’s operating costs and will ensure the Employers to receive continual reliable services, and facilitate their safe, effective and efficient operations. Directors (including the independent non-executive Directors) are of the view that as far as the shareholders of the Company are concerned, the Composite Services Framework Agreement has been renewed in the ordinary course of the Company’s business, on normal commercial terms or better, fair and reasonable and in the interests of the Company and its shareholders as a whole. None of the Directors has material interest in the transactions contemplated under the Framework Agreement and therefore no Director has abstained from voting on the related Board resolution.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. Feihe Dairy Group was one of the Group’s top five customers for each of three years ended 31 December 2018. The Board believes the sales of raw milk to the Feihe Dairy Group is important to the business of the Group. It is expected that the long term, continuing supply of raw milk products to the Feihe Dairy Group will further enhance the stability of the Group’s customer base and ensure future demand for the Group’s raw milk product. The proposed grant of priority in favour of the Feihe Dairy Group in the supply of raw milk (the “Priority Rights”) and the extension of the existing term of the 2017 Feihe Master Agreement to beyond 31 December 2019 were initially proposed and requested by the Feihe Dairy Group. Having considered (i) the background of Feihe Dairy Group; (ii) long-term business relationship between the Group and Feihe Dairy Group; (iii) that the Group will give priority to Feihe Dairy Group for purchase of raw milk on terms and conditions being no less favourable to the Group than that offered by the other purchasers; and (iv) the Group’s annual capacity of raw milk, the Directors, other than the independent non-executive Directors who will express their opinion in a separate letter to be included in a circular, consider that the terms and conditions of the 2020 Feihe Master Agreement (including the Priority Rights) are on normal commercial terms and are fair and reasonable, and the transactions contemplated under the 2020 Feihe Master Agreement will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its shareholders as a whole. The Directors, other than the independent non-executive Directors who will express their opinion in a separate letter to be included in a circular, are also of the view that the proposed annual caps for the transactions contemplated under the 2020 Feihe Master Agreement for each of the three years ending 31 December 2022 are fair and reasonable. IMPLICATIONS OF THE LISTING RULES Feihe Dairy Group (comprising China Feihe and its subsidiaries) is not a connected person of the Company for the purpose of Rule 14A.06(7) of the Listing Rules. However, due to our past relationship and transactions with Feihe Dairy Group as disclosed in the section headed “History, Development and Reorganization – our Relationship with Feihe Dairy Group” in the Prospectus, Feihe Dairy Group is deemed by the Stock Exchange as a connected person pursuant to Rule 14A.19 (or the then Rul...
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Directors consider that the terms of the aforesaid continuing connected transactions are fair and reasonable, on normal commercial terms or better, and it is in the interests of the Company and the Shareholders as a whole to enter the aforesaid continuing connected transactions for the following reasons:
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Company believes that the risk profile of Sinochem Finance, as a provider of financial services to the Group, is not greater than those of independent commercial banks in the PRC because:
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The Target Group has been the supply arm of the ZTE Group for a comprehensive range of products and parts of various types of mobile terminals. The ZTE Group has been the key customer of the Target Group for each of the years ended 31 December 2009, 2010 and 2011 and the six months ended 30 June 2012, contributing over 75% of the sales of the Target Group in the respective periods. As the Target Group has about eight years of experience in carrying out design and/or production orders with the ZTE Group and possesses good knowledge about the technological requirement and product development trend of the ZTE Group, the Directors (including the independent non-executive Directors) believe that sales orders from the ZTE Group will continue to form a significant income stream of the Target Group after the Acquisition Completion. Pursuant to the Framework Agreement, the Target Group shall offer competitive bids in the tendering process of the ZTE Group in order to obtain ZTE Group’s procurement orders for the Products. The Target Group determines the bid price mainly based on the estimated cost of development and production of the relevant Products, the targeted gross profit margin to be determined on a case by case basis depending on the features of the relevant Products and the market conditions. On the above basis, the Directors (including the independent non-executive Directors) consider that the Enlarged Group (following the Acquisition Completion) will benefit from the Framework Agreement and the transactions contemplated thereunder. The terms and conditions of the Framework Agreement were negotiated between the parties on an arm’s length basis. The Directors (including the independent non-executive Directors) are of the view that the terms and conditions of the Framework Agreement are on normal commercial terms that are fair and reasonable and the continuing connected transactions under the Framework Agreement will be conducted in the ordinary and usual course of business of the Enlarged Group and in the interests of the Company and the Shareholders as a whole. The Directors (including the independent non-executive Directors) are also of the view that the proposed annual caps for the continuing connected transactions under the Framework Agreement for each of the years ending 31 December 2015 are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS. The entering into the Coal Purchase and Sale Cooperation Framework Agreements will help (i) locking in the coal price against its expected fluctuation in the future so as to lower the average fuel costs; (ii) getting favourable prices by bulk purchases; and (iii) securing the continuous and stable coal supply to the coal-fired power generating units of the Group. The Directors are of the view that, the terms of entering into the Coal Purchase and Sale Cooperation Framework Agreements are no less favourable than the terms available from independent third parties, and will ensure stable supply, efficient and timely delivery of the coal, which is beneficial to the normal operation of the Group. The Directors (including the independent non-executive Directors) are of the view that as far as the shareholders of the Company are concerned, the Coal Purchase and Sale Cooperation Framework Agreements are entered into in the ordinary course of the Company’s business, on normal commercial terms, fair and reasonable and in the interests of the Company and its shareholders as a whole.
