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.
Ajisen (China) Holdings Limited
(Incorporated in the Cayman Islands with limited liability)
(Stock code: 538)
RENEWAL OF
CONTINUING CONNECTED TRANSACTIONS
References are made to the announcements of the Company dated 15 May 2015 and 21 May 2015 in relation to the continuing connected transactions under the 2015 CCT Agreements and the announcement of the Company dated 30 September 2016 in relation to the Trademark Licence Agreement.
As the Group intends to continue carrying out the transactions under the 2015 CCT Agreements, on 14 May 2021, the Group renewed the Fortune Choice Sales Agreement and the Fortune Choice Supply Agreement with Shigemitsu Industry both for a further three-year term ending on 13 May 2024. On the same date, the Group also renewed the Festive Profits Supply Agreement with Shigemitsu Food and the Design Union Agreement with Design Union for a further three-year term ending on 13 May 2024.
LISTING RULES IMPLICATIONS
Since each of Shigemitsu Industry, Shigemitsu Food and Design Union is a connected person of the Company under the Listing Rules, the Franchise Agreements, the Trademark Licence Agreement and the CCT Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
Since each of the applicable percentage ratios (other than the profits ratio) in relation to each of the annual caps of the transactions under each of the Franchise Agreements, the Trademark Licence Agreement and the CCT Agreements for 2021, 2022 and 2023 is more than 0.1% but less than 5%, the conduct of those transactions will accordingly constitute non-exempt continuing
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connected transactions of the Company which are subject to the reporting and announcement requirements, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
On 14 May 2021, the Group renewed the Fortune Choice Sales Agreement and the Fortune Choice Supply Agreement with Shigemitsu Industry both for a further three-year term ending on 13 May 2024. On the same date, the Group also renewed the Festive Profits Supply Agreement with Shigemitsu Food and the Design Union Agreement with Design Union for a further three-year term ending on 13 May 2024.
DETAILS OF THE CONTINUING CONNECTED TRANSACTIONS
The principal terms of each of the CCT Agreements, the Franchise Agreements and the Trademark Licence Agreement are as follows:
(A) RENEWED FORTUNE CHOICE SUPPLY AGREEMENT
Date of agreement:
Parties:
- Shigemitsu Industry as seller
Term:
Scope of the agreement:
Pricing policy:
In relation to those specialty products, which are only available through Shigemitsu Industry, such as soup base, the Group will negotiate in arm's length by reference to their historical prices, prevailing market prices of close comparables for the specialty products and costs of production with Shigemitsu Industry to ascertain the price. Pursuant to a supplemental agreement dated 16 September 2006 and made between Fortune Choice and Shigemitsu Industry, the parties agree that where the goods are manufactured or supplied by Shigemitsu Industry from the PRC, Shigemitsu Industry will duly and reasonably adjust the prices of the goods in favour of the Group.
Payment terms:The consideration of the goods will be paid by the Group to Shigemitsu Industry in cash upon receipt of invoice.
- RENEWED FORTUNE CHOICE SALES AGREEMENT
Date of agreement:
Parties:
- Shigemitsu Industry as buyer
Term:
Scope of the agreement:
Pricing policy:
Parties: | (1) Design Union as contractor; and |
(2) Ajisen (Hong Kong) | |
Term: | From 14 May 2021 to 13 May 2024 |
Scope of the agreement: | Design Union to provide services and materials for design, |
decoration and renovation for restaurants operated or to be | |
operated by the Group in Hong Kong. | |
Pricing policy: | The consideration of the services and materials to be provided |
by Design Union to the Group would be determined by | |
reference to costs of raw materials, costs of production, | |
historical prices, and prevailing market prices of similar | |
products and would be no less favourable than those offered | |
by Design Union to other independent customers and on the | |
terms to be determined by the parties after arm's length | |
negotiation and on normal commercial terms that are fair and | |
reasonable and in the interest of the Company and its | |
shareholders as a whole. | |
Payment terms: | The consideration of the services and materials will be paid |
by the Group to Design Union in cash in full upon receipt of | |
invoice. |
- FRANCHISE AGREEMENTS
The Franchise Agreements were made on 19 February 2006. Pursuant to the Franchise Agreements, Shigemitsu Industry (as franchisor), agrees to grant a sole, exclusive and perpetual franchise to the Group to operate the Franchise Businesses in Mainland China, Hong Kong and Macao. The Franchise Agreements are perpetual unless terminated by an occurrence of any terminating event as set out in the Franchise Agreements.
The terms of the Franchise Agreements (including the fees payable by the Group to Shigemitsu Industry thereunder) were negotiated on an arm's length basis. The Directors believe that the perpetual term of the Franchise Agreements best serves the commercial interests of the Group and Shigemitsu Industry in their ordinary course of business dealing and is therefore a normal commercial practice. It is also important to and in the best interests of the Group and the shareholders of the Company to sign long-term franchise agreements with Shigemitsu Industry to secure the franchise rights and avoid any potential issues in entering into new agreements in the future. The technical fees payable by the Group to Shigemitsu Industry under the Franchise Agreements will be settled by cash on an annual basis while the franchise fees payable by the Group to Shigemitsu Industry will be settled by cash on a monthly basis.
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Ajisen (China) Holdings Ltd. published this content on 14 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2021 16:20:12 UTC.