AEON Stores Hong Kong : Announcements and notices (138 KB/PDF) Continuing connected transactions in relation to the (1) COX master purchase agreement; and (2) G FOOT master purchase agreement

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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.

AEON STORES (HONG KONG) CO., LIMITED

永 旺（ 香 港 ）百 貨 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 00984)

ANNOUNCEMENT

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE

1. COX MASTER PURCHASE AGREEMENT; AND

2. G FOOT MASTER PURCHASE AGREEMENT

Reference is made to the Announcement and the Delay Announcement. The Board wishes to provide an update on the arrangements in relation to the Group's merchandise transactions with COX and G Foot.

The Board is pleased to announce that on 5 May 2016, the Company entered into the COX Master Purchase Agreement and the G Foot Master Purchase Agreement to better regulate its merchandise transactions with COX and G Foot respectively going forward.

As at the date of this announcement, each of COX and G Foot is a connected person of the Company by virtue of it being a subsidiary of AEON Co, the controlling shareholder of the Company. Accordingly, the transactions contemplated under the COX Master Purchase Agreement and the G Foot Master Purchase Agreement constitute continuing connected transactions of the Company under the Listing Rules.

As the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules in respect of the proposed annual caps under the Master Purchase Agreements (i.e. the COX Master Purchase Agreement, the G Foot Master Purchase Agreement and the TopV Master Purchase Agreement), when aggregated under the Listing Rules, are more than 5%, the transactions thereunder are subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

As disclosed in the Delay Announcement, the Company expected that the despatch of the Circular containing, among other things, details of the Master Purchase Agreements, a letter from the Independent Board Committee, a letter from the independent financial adviser, and a notice to convene the GM will be postponed to a date not later than 5 May 2016. As the Company requires more time to finalize the information to be included in the Circular, the Company expects that the despatch of the Circular will be further postponed to a date not later than 19 May 2016.

1. INTRODUCTION

   Reference is made to the announcement of the Company dated 31 March 2016 (the ''Announcement'') and the announcement of the Company dated 20 April 2016 (the ''Delay Announcement'').

   The Board wishes to provide an update on the arrangements in relation to the Group's merchandise transactions with COX and G Foot. The Board is pleased to announce that on 5 May 2016, the Company entered into the COX Master Purchase Agreement and the G Foot Master Purchase Agreement to better regulate its merchandise transactions with COX and G Foot respectively going forward.

2. TERMS OF THE COX MASTER PURCHASE AGREEMENT Date

   5 May 2016

   Parties

3. the Company; and

4. COX.

   Nature of Transactions

   The Purchasers (i.e. the Company and any of its subsidiaries) will purchase a variety of fashion and household merchandise from COX, which would then be sold to retail customers by the Group at its general merchandise stores and supermarket stores.

   Pricing

   The sale and purchase of merchandise between the parties will be charged on a cost-plus basis, representing all costs incurred in relation to the supply of the merchandise, including direct costs such as merchandises costs, freight costs, operational costs and other indirect or common costs allocated on a revenue or other equitable basis, plus a mark-up rate of not more than 15% of such costs. Subject to compliance with the Listing Rules, the parties may review and amend such mark-up rate on an annual basis by mutual consent.

   The prices offered by COX shall be no less favourable than (i) prices available in the market for similar merchandises and (ii) prices offered by COX to its other purchaser(s), if any, save and except certain variance arising out of differences in relative location and actual freight costs applicable to a purchasing party.

   Rebates

   COX may, taking into account factors such as purchase volume, promotions from manufacturers, its budget, results and profits, grant rebates to the Purchaser(s) (as agreed mutually between the relevant parties) from time to time.

   Purchase Contracts

   The Purchaser(s) shall enter into specific purchase contracts with COX, which adopt the terms and conditions set out in the COX Master Purchase Agreement and the standard terms and conditions of the relevant Purchaser prevailing at the time of execution of such purchase contract. The purchase contracts will set out detailed terms (e.g. the payment terms) of the sale and purchase of merchandise.

   Further Assistance

   For the purposes of facilitating the Group's sourcing of merchandises, which would enable the Group to efficiently provide its general merchandise stores and supermarket stores with required types and amounts of merchandise and maintain the competitiveness of its business, the Purchasers and COX shall, as may be practicable in the circumstances, share with each other (on a strictly need-to-know basis) information relating to the purchasing, selling, stocking, pricing and specifications of each other's merchandises. COX shall, upon request by members of the Group and within a reasonable period of time, further provide such market information and data as may be required. Both the Company and COX have undertaken to keep all such information and data received or exchanged confidential.

   In addition, the Purchasers shall have the right to audit, cross-check and verify the books, records, financial practice, business and operational flow and practice, electronic/ computer system(s) of COX.

   Term

   The term of the COX Master Purchase Agreement shall be a period of 3 years ending 31 December 2018, provided that the parties to the COX Master Purchase Agreement may, subject to compliance with the Listing Rules, renew the COX Master Purchase Agreement. The COX Master Purchase Agreement shall take effect as of 1 January 2016.

   Termination

   The COX Master Purchase Agreement may be terminated by 3 month's prior written notice by either party. On termination, each purchase contract then in force shall nevertheless continue in full force and effect for the remainder of the term of such purchase contract, unless terminated in accordance with the terms of such purchase contract.

5. TERMS OF THE G FOOT MASTER PURCHASE AGREEMENT Date

   5 May 2016

   Parties

6. the Company; and

7. G Foot.

Nature of Transactions

G Foot will provide a variety of shoes merchandise to the Purchasers for sale to retail customers on a consignment basis at general merchandise stores of the Group.

Pricing

The Purchaser(s) shall be entitled to a commission out of the proceeds from its sale of shoes merchandises provided by G Foot. The amount of such commission shall be no less than 10% to 16% of the sales proceeds and no less favourable than the commission rate offered by G Foot to its other consignee(s), if any. Subject to compliance with the Listing Rules, the parties may review and amend such rate of commission by mutual consent.

Rebates

G Foot may, taking into account factors such as purchase volume, promotions from manufacturers, its budget, results and profits, grant rebates to the Purchaser(s) (as agreed mutually between the relevant parties) from time to time.

Purchase Contracts

The Purchaser(s) shall enter into specific purchase contracts with G Foot, which adopt the terms and conditions set out in the G Foot Master Purchase Agreement and the standard terms and conditions of the relevant Purchaser in relation to the procurement of merchandise for sale on a consignment basis prevailing at the time of execution of such purchase contract. The purchase contracts will set out detailed terms (e.g. the payment terms) of the consignment.

Further Assistance

For the purposes of facilitating the Group's sourcing of merchandises, which would enable the Group to efficiently provide its general merchandise stores and supermarket stores with required types and amounts of merchandise and maintain the competitiveness of its business, the Purchasers and G Foot shall, as may be practicable in the circumstances, share with each other (on a strictly need-to-know basis) information relating to the purchasing, selling, stocking, pricing and specifications of each other's merchandises. G Foot shall, upon request by members of the Group and within a reasonable period of time, further provide such market information and data as may be required. Both the Company and G Foot have undertaken to keep all such information and data received or exchanged confidential.

In addition, the Purchasers shall have the right to audit, cross-check and verify the books, records, financial practice, business and operational flow and practice, electronic/ computer system(s) of G Foot.

Term

The term of the G Foot Master Purchase Agreement shall be a period of 3 years ending 31 December 2018, provided that the parties to the G Foot Master Purchase Agreement may, subject to compliance with the Listing Rules, renew the G Foot Master Purchase Agreement. The G Foot Master Purchase Agreement shall take effect as of 1 January 2016.