SHENGUAN HOLDINGS (GROUP) LIMITED 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.
神冠控股（集團）有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 00829)The Board announces that on 30 October 2015, the Company entered into the Framework Agreement with Guangxi Zhiguan for a period commencing from 1 November 2015 and ending on 31 December 2017 pursuant to which Guangxi Zhiguan agreed to supply cattle inner skin to the Group.
As at the date of this announcement, Ms. Zhou, an executive Director and one of the controlling Shareholders, together with her associates and Mr. Ru, Mr. Mo and Mr. Shi, each an executive Director, own more than 30% of the equity interest in Guangxi Zhiguan and thus Guangxi Zhiguan is a connected person of the Company. Pursuant to the Listing Rules, the entering into of the Framework Agreement constitutes continuing connected transaction of the Company.
As one or more of the applicable percentage ratios in respect of the Framework Agreement are more than 0.1% but below 5%, the Framework Agreement and the transactions contemplated thereunder are subject to, among other things, the reporting and announcement requirements but are exempt from independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.
The Board announces that on 30 October 2015, the Company entered into the Framework Agreement with Guangxi Zhiguan for a period commencing from 1 November 2015 and ending on 31 December 2017 pursuant to which Guangxi Zhiguan agreed to supply cattle inner skin to the Group.
Framework AgreementThe principal terms of the Framework Agreement are as follows:
30 October 2015
Vendor: Guangxi Zhiguan
Purchaser: The Company
The Company (as purchaser) entered into the Framework Agreement with Guangxi Zhiguan (as vendor) on 30 October 2015 in relation to supply of cattle inner skin to the Group for a period commencing from 1 November 2015 to 31 December 2017. The purchase price will be settled by the Group within 60 days upon receipt of the cattle inner skin at each transaction with Guangxi Zhiguan.
The purchase prices to be payable by the Group under the Framework Agreement are determined with reference to the market price of the cattle inner skin. In determining the market price, the parties will make reference to the prices for cattle inner skin offered by two to three suppliers which are Independent Third Parties. The purchase prices to be payable by the Group to Guangxi Zhiguan shall not be higher than the prices offered by suppliers which are Independent Third Parties.
The parties will also make reference to other terms offered by suppliers which are Independent Third Parties for cattle inner skin. The terms to be offered by Guangxi Zhiguan to the Group shall be not less favourable than those offered by suppliers which are Independent Third Parties.
The Group has not conducted any business with Guangxi Zhiguan in the past years.
RMB30,000,000 RMB90,000,000 RMB100,000,000
REASONS AND BENEFITS OF ENTERING INTO THE FRAMEWORK AGREEMENTThe Directors are of the view that the Framework Agreement will enable the Group to ensure the quality and safety of cattle inner skin, which is a major raw material for the production of collagen sausage casings.
In arriving at the relevant annual caps under the Framework Agreement, the Directors have considered, among other matters, (i) the estimated demand by the Group for the cattle inner skin; (ii) the proportion of the cattle inner skin to be supplied by Guangxi Zhiguan and by suppliers which are Independent Third Parties and; (iii) the estimated price of the cattle inner skin for the period commencing from 1 November 2015 to 31 December 2017.
The terms of the Framework Agreement were agreed upon after arm's length negotiations between the Company and Guangxi Zhiguan. The Directors (including the independent non- executive Directors) consider that the Framework Agreement was entered into on normal commercial terms and in the ordinary and usual course of business of the Group, and that the terms and the annual caps for the Framework Agreement are fair and reasonable for the Group and the Shareholders as a whole.
Ms. Zhou, Mr. Ru, Mr. Mo and Mr. Shi, each an executive Director, had abstained from voting on the board resolutions approving the Framework Agreement for their interests (as detailed below) in the Framework Agreement.
The Group is principally engaged in the manufacture and sale of edible collagen sausage casing products and pharmaceutical products in the PRC.
Guangxi Zhiguan is principally engaged in the sales and purchase, and the import and export of cattle skin. Set out below is a summary of the shareholding structure of Guangxi Zhiguan as at the date of this announcement:
Ms. Zhou 56%
Rong Zhibiao (容志彪) 30%
Wen Jinpei (溫錦培) (Note 1) 1%
Cai Yueqing (蔡月卿) (Note 2) 1%
Mr. Ru 1%
Mr. Mo 1%
Mr. Shi 1%
Zhou Junli (周峻立) (Note 3) 2%
Zhou Yuchan (周玉嬋) (Note 4) 2%
Luo Jiaming (羅嘉鳴) 1%
Quan Chuwa (全楚娃) 1%
Lu Xin (陸欣) 1%
Zhao Gongjun (趙公晉) 1%
Sha Lifei (沙麗飛) (Note 5) 1%
Total: 100%
Note:
Mr. Wen is a senior management of the Group.
Ms. Cai is a senior management of the Group.
Mr. Zhou Junli is a nephew of Ms. Zhou.
Ms. Zhou Yuchan is the sister of Ms. Zhou.
Ms. Sha Lifei is the sister of Mr. Sha.
To the best of the knowledge, belief and information of the Directors, and having made reasonable enquiries, each of Rong Zhibiao, Luo Jiaming, Quan Chuwa, Lu Xin and Zhao Gongjun is a third party independent of the Company and its connected persons (as defined under the Listing Rules.)
As at the date of this announcement, Ms. Zhou, an executive Director and one of the controlling Shareholders, together with her associates and Mr. Ru, Mr. Mo and Mr. Shi, each an executive Director, own more than 30% of the equity interest in Guangxi Zhiguan and thus Guangxi Zhiguan is a connected person of the Company under Chapter 14A of the Listing Rules. Pursuant to the Listing Rules, the entering into of the Framework Agreement constitutes continuing connected transaction of the Company.
As one or more of the applicable percentage ratios in respect of the Framework Agreement are more than 0.1% but below 5%, the Framework Agreement and the transactions contemplated thereunder are subject to, among other things, the reporting and announcement requirements but are exempt from independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.
In this announcement, unless the context otherwise requires, the following terms have the following meanings:
'associates' has the meaning ascribed to it by the Listing Rules 'Board' the board of Directors
'Company' Shenguan Holdings (Group) Limited (神冠控股（集團）有限公 司), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange
'connected person' has the meaning ascribed to it by the Listing Rules 'controlling shareholder' has the meaning ascribed to it by the Listing Rules 'Director(s)' the director(s) of the Company
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