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.
(Incorporated in Bermuda with limited liability)
(Stock Code: 661)
MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS
Reference is made to (i) the announcements of the Company dated 3 November 2016 and 30 November 2017 and (ii) the circular of the Company dated 24 November 2016 in relation to, amongst other things, the Existing Continuing Connected Transactions in respect of agreements for the provision of goods and/or services between certain members of the Parent Group or CNMC Group and the Group which are due to expire on 31 December 2019. In order to renew the Existing Continuing Connected Transactions and to regulate the continuing business relationships between the Group, the Parent Group and the CNMC Group, the Company entered into the Connected Transaction Agreements with respect to the renewal of the Existing Continuing Connected Transactions and the New Continuing Connected Transactions.
As at the date of this announcement, China Times directly held 11,962,999,080 Shares, representing approximately 66.85% of the issued share capital of the Company, and is a wholly owned subsidiary of the Parent Company. Accordingly, the Parent Company is a controlling shareholder of the Company indirectly interested in approximately 66.85% of the issued share capital of the Company, and CNMC is the controlling shareholder of the Parent Company holding approximately 57.99% of the equity interests in the Parent Company. Therefore, each of China Times, the Parent Company and CNMC is a connected person of the Company. Each of Huangshi Xingang and Hubei Gold is indirectly owned by the Parent Company as to more than 30% and are therefore associates of the Parent Company and connected persons of the Company. Zhongse Aobote is indirectly owned by CNMC as to more than 30% and is therefore an associate of CNMC and a connected person of the Company. Bangfuduo International
Trade is a non-wholly owned subsidiary of Huangshi State-owned Assets Management Co., Ltd.* (黃石市國有資產經營有限公司), which directly and indirectly interested in 24% of the
equity interests in a joint venture company which will be a subsidiary of the Company upon its establishment, as described in the circular of the Company dated 25 October 2019 in relation to very substantial acquisition and connected transaction. Accordingly, Bangfuduo International Trade is a connected person of the Company at the subsidiary level. Therefore, the transactions contemplated under each of the framework agreements set out in this announcement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
Regarding each of the Exempt Continuing Connected Transactions (other than the Bangfuduo Purchase Framework Agreement), as the highest applicable percentage ratio in respect of their Proposed Annual Caps exceeds 0.1% but is less than 5%, the Exempt Continuing Connected Transactions are subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
1
Regarding the Bangfuduo Purchase Framework Agreement, the highest applicable percentage ratio in respect of the Proposed Annual Caps for the Bangfuduo Purchase Framework Agreement exceeds 5%, and Bangfuduo International Trade is a connected person of the Company at the subsidiary level. The Board has approved the transactions contemplated under the Bangfuduo Purchase Framework Agreement. The independent non-executive Directors have confirmed that the terms of the transactions under the Bangfuduo Purchase Framework Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. Therefore, the transactions under the Bangfuduo Purchase Framework Agreement and the Proposed Annual Caps for such transactions are subject to the reporting, annual review and announcement requirements but are exempt from the circular, independent financial advice and independent shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.
Regarding each of the Non-Exempt Continuing Connected Transactions, as the highest applicable percentage ratio in respect of their Proposed Annual Caps exceeds 5%, the Non-Exempt Continuing Connected Transactions are subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
Regarding the loans, guarantees and integrated credit facilities services to be provided under the CNMC Financial Services Framework Agreement, such services will be provided by the CNMC Group for the benefit of the Company on normal commercial terms similar to those for comparable services in the PRC and no security over the assets of the Group will be granted. Therefore, the provision of such services will constitute a continuing connected transaction that is exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.90 of the Listing Rules.
Regarding the deposit services to be provided under the CNMC Financial Services Framework Agreement, as the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 25%, the provision of such services will constitute (i) a continuing connected transaction that is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules; and (ii) a major transaction that is subject to the reporting, announcement, annual review and shareholders' approval requirements under Chapter 14 of the Listing Rules.
The Parent Company, CNMC and their respective associates will abstain from voting on the resolutions approving the Non-Exempt Continuing Connected Transactions, the transactions contemplated thereunder and the Proposed Annual Caps at the SGM.
A circular containing, among others, (i) further details of the Non-Exempt Continuing Connected Transactions and the Proposed Annual Caps; (ii) the letter of advice from the independent financial adviser; (iii) the letter of recommendation from the independent board committee; (iv) the notice of the SGM; and (v) other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 12 December 2019 in accordance with the Listing Rules.
2
-
MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS
Reference is made to (i) the announcements of the Company dated 3 November 2016 and 30 November 2017 and (ii) the circular of the Company dated 24 November 2016 in relation to, amongst other things, the Existing Continuing Connected Transactions in respect of agreements for the provision of goods and/or services between certain members of the Parent Group or CNMC Group and the Group which are due to expire on 31 December 2019. In order to renew the Existing Continuing Connected Transactions and to regulate the continuing business relationships between the Group, the Parent Group and the CNMC Group, the Company entered into the Connected Transaction Agreements with respect to the renewal of the Existing Continuing Connected Transactions and the New Continuing Connected Transactions.
Set out below is a summary of the Connected Transaction Agreements, the transactions contemplated thereunder, the Proposed Annual Caps and the basis for determining the Proposed Annual Caps:
1. Parent Group Sales Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Group will supply certain products to the Parent Group, | |
including silver, copper cathodes, copper concentrate, | ||
natural gas, residual heat power generation, water, | ||
electricity, sulfuric acid, waste materials, scrap steel, scrap | ||
stainless steel, scrap copper cathodes mold, spare part | ||
materials and such other products as agreed by the parties | ||
from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. |
3
Time and method of payment: Based on market practice.
Pricing mechanism: | Based on: (i) the government-prescribed price; or (ii) if there |
is no applicable government-prescribed price, the Market | |
Price or a price determined by the internal documents of the | |
Group developed with reference to the Market Price. | |
If the prices and charges are determined based on or with | |
reference to prices, exchange rates or tax rates stated in | |
specific government documents, internal documents of the | |
Group, exchanges or industry-related websites, the effective | |
aforementioned documents, prices and rates at the time | |
of the entry into of specific transaction agreements by the | |
parties shall prevail. |
As at the date of this announcement, prices for the supply of the relevant products will be determined by the parties on the following basis:
Silver: | With reference to the market price of silver as quoted on |
(i) the Shanghai Gold Exchange; (ii) the Shanghai Huatong | |
Silver Exchange; (iii) the Chicago Mercantile Exchange | |
(adjusted with reference to the premium or discount quoted | |
by Reuters); or (iv) the London Bullion Market Association | |
(as applicable). | |
Copper cathodes: | With reference to the market price of copper as quoted |
on (i) the Shanghai Futures Exchange or (ii) the London | |
Metal Exchange, adjusted with reference to the premium or | |
discount quoted by Reuters or the Shanghai Metal Market | |
website (as applicable). | |
Copper concentrate: | With reference to (as applicable): (i) the market price |
of gold as quoted on the Chicago Mercantile Exchange | |
(adjusted with reference to the premium or discount quoted | |
by Reuters) or by the London Bullion Market Association; | |
(ii) the market price of silver as quoted on the Chicago | |
Mercantile Exchange (adjusted with reference to the | |
premium or discount quoted by Reuters) or by the London | |
Bullion Market Association; or (iii) the market price of | |
copper as quoted on the London Metal Exchange (adjusted | |
with reference to the premium or discount quoted by Reuters | |
as applicable). | |
Natural gas: | With reference to the price of natural gas prescribed by |
Huangshi Price Bureau* (黃石市物價局). |
4
Residual heat power generation:
Water:
Electricity:
Scrap steel, scrap stainless steel, scrap copper cathodes mold, spare part materials
Sulfuric acid:
With reference to the price of electricity prescribed by Hubei Province Price Bureau.
With reference to the price of water prescribed by Huangshi Price Bureau* (黃石市物價局).
With reference to the price of electricity prescribed by Hubei Province Price Bureau.
With reference to the tender prices and the overall market condition.
With reference to market price of sulfuric acid chemical products quoted on the industry-related website, which is currently Baiinfo website and the overall market condition.
Waste materials: | With reference to the market price determined through |
price inquiries and the market price of copper quoted on the | |
Shanghai Futures Exchange. |
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the Parent Group Sales Framework Agreement:
Year ending | Year ending | Year ending | |||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | ||||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | ||||||||||||
Actual | |||||||||||||||||
amount | |||||||||||||||||
(up to | |||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | ||||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | |||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | |||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | |||||||||||
13,450,706 | 2,266,680 | 14,848,027 | 3,861,613 | 16,694,468 | 4,537,676 | 7,207,373 | 10,802,160 | 14,383,651 | |||||||||
The above Proposed Annual Caps have been determined with reference to the: (i) existing purchase orders placed by the Parent Group; (ii) projected future orders based on the expected increase in the products to be sold to the Parent Group as a result of the expected growth in the business of the Parent Group; and (iii) the average historical market price and the anticipated future market price for the relevant products.
5
Reasons for the transaction
The Directors consider that the Parent Group Sales Framework Agreement will broaden the revenue base of the Group and allow it to leverage on the sales network of the Parent Group in the PRC and Hong Kong.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Parent Group Sales Framework Agreement is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
2. Huangshi Xingang Sales Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | Huangshi Xingang | |
Nature of transactions: | The Group will supply certain products to Huangshi | |
Xingang, including sulfuric acid and such other products as | ||
agreed by the parties from time to time. |
Term:
Time and method of payment: Pricing mechanism:
1 January 2020 to 31 December 2022.
Based on market practice.
Based on: (i) the government-prescribed price; or (ii) if there is no applicable government-prescribed price, the Market Price or a price determined by the internal documents of the Group developed with reference to the Market Price.
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
6
As at the date of this announcement, prices for the supply of sulfuric acid will be determined by the parties on the following basis:
Sulfuric acid: | With reference to market price of sulfuric acid chemical |
products quoted on the industry-related website, which is | |
currently Baiinfo website and the overall market condition. | |
Proposed Annual Caps |
The table below sets out the Proposed Annual Caps for the Huangshi Xingang Sales Framework Agreement:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
15,000 | 40,000 | 75,000 | ||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by other purchasers with the Group for the relevant products; (ii) projected future orders based on the expected amount of products to be sold to Huangshi Xingang for the three years ending 31 December 2022; and (iii) average historical market price and the anticipated future market price for the relevant products.
Reasons for the transaction
The Directors consider that the Huangshi Xingang Sales Framework Agreement will broaden the revenue base of the Group and allow it to leverage on the sales network of the Huangshi Xingang in the PRC.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Huangshi Xingang Sales Framework Agreement is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
3. Zhongse Aobote Sales Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | Zhongse Aobote | |
Nature of transactions: | The Group will supply certain products to Zhongse Aobote, | |
including copper cathodes and such other products as agreed | ||
by the parties from time to time. |
7
Term: | 1 January 2020 to 31 December 2022. |
Time and method of payment: Based on market practice. | |
Pricing mechanism: | Based on: (i) the government-prescribed price; or (ii) if there |
is no applicable government-prescribed price, the Market | |
Price or a price determined by the internal documents of the | |
Group developed with reference to the Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, prices for the supply of copper cathodes will be determined by the parties on the following basis:
Copper cathodes: | With reference to the market price of copper as quoted on |
the Shanghai Futures Exchange, adjusted with reference to | |
the premium or discount quoted by metal spot websites (as | |
applicable). | |
Proposed Annual Caps |
The table below sets out the Proposed Annual Caps for the Zhongse Aobote Sales Framework Agreement:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
2,832,000 | 2,976,000 | 2,976,000 | ||
The above Proposed Annual Caps have been determined with reference to the: (i) existing purchase orders placed by other purchasers with the Group for the relevant products; (ii) projected future orders based on the expected amount of products to be sold to Zhongse Aobote for the three years ending 31 December 2022; and (iii) average historical market price and the anticipated future market price for the relevant products.
Reasons for the transaction
The Directors consider that the Zhongse Aobote Sales Framework Agreement will broaden the revenue base of the Group and allow it to leverage on the sales network of Zhongse Aobote in the PRC.
8
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Zhongse Aobote Sales Framework Agreement is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
4. Parent Group Services Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Group will provide certain services to the Parent Group, | |
including engineering design and surveying, environment | ||
monitoring, equipment inspection and examination, technical | ||
research project, technical services, vehicle rental and such | ||
other services as agreed by the parties from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Time and method of payment: | Based on market practice. | |
Pricing mechanism: | Based on: (i) the government-prescribed price; or (ii) if there | |
is no applicable government-prescribed price, the Market | ||
Price or a price determined by the internal documents of the | ||
Group developed with reference to the Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, service fees for the provision of the relevant services will be determined on the following basis:
Engineering design and | With reference to the relevant prices prescribed by the |
surveying: | National Development and Reform Commission and the |
Ministry of Housing and Urban-Rural Development of the | |
PRC. | |
Environment monitoring: | With reference to the relevant prices prescribed by the Hubei |
Province Price Bureau and the Hubei Provincial Department | |
of Finance* (湖北省財政廳). |
9
Equipment inspection and | With reference to the relevant prices prescribed by the |
examination: | Huangshi Price Bureau* (黃石市物價局). |
Technical services and | With reference to the cost of material consumption, |
technical research project: | equipment depreciation, testing laboratory fees, labour costs |
and management fees plus an agreed premium from 5% to | |
10%. | |
Vehicle rental: | With reference to the operation costs. |
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the Parent Group Services Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | ||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
10,990 | 4,427 | 10,690 | 637 | 10,540 | 949 | 32,414 | 32,790 | 17,004 | ||||||||
The above Proposed Annual Caps have been determined with reference to the: (i) historical service fees received by the Group; (ii) expected increase in the services to be provided to the Parent Group as a result of the expected growth in their business; and (iii) expected increase in the services fees to be received by the Group in the next three years ending 2022.
Reasons for the transaction
The Directors consider that the entering into of the Parent Group Services Framework Agreement will broaden the revenue base of the Group. Given the close proximity of the respective operations of the Group and the Parent Group, the Parent Group Services Framework Agreement will also enable convenient and cost-efficient sharing of the various services between the Group and the Parent Group.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps is expected to be more than 0.1% but less than 5%, the Parent Group Services Framework Agreement is subject to the reporting, announcement and annual review requirements, but is exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
10
5. Parent Group Purchase and Production Services Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Parent Group will: |
Term:
Time and method of payment: Pricing mechanism:
- supply certain products to the Group, including scrap copper, copper concentrate, diesel fuel, parts and equipment, waste circuit boards and such other products as agreed by the parties from time to time; and
- provide certain production services to the Group, including construction maintenance, engineering labour, transportation, train loading and unloading and such other production services as agreed by the parties from time to time.
1 January 2020 to 31 December 2022.
Based on market practice.
Based on: (i) the government prescribed price; (ii) if there is no applicable government prescribed price, the Market Price determined by the Company by way of a comprehensive evaluation method taking into account comparable quotes from at least two independent third parties obtained via public tender or price inquiry, or the price as negotiated by the parties if the relevant procurement does not require public tender or price inquiry procedure or a price determined by the internal documents of the Group developed with reference to the Market Price.
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
11
As at the date of this announcement, prices for the supply of the relevant products and services will be determined by the parties on the following basis:
Scrap copper: | With reference to the market procurement price of scrap |
copper in regions such as Miluo, Hunan, Taizhou, Zhejiang | |
and Nanhai, Guangdong as quoted on relevant copper | |
industry web portals such as Lingtong Info website. | |
Copper concentrate: | With reference to (as applicable): (i) the market price |
of gold as quoted on the Chicago Mercantile Exchange | |
(adjusted with reference to the premium or discount quoted | |
by Reuters) or by the London Bullion Market Association; | |
(ii) the market price of silver as quoted on the Chicago | |
Mercantile Exchange (adjusted with reference to the | |
premium or discount quoted by Reuters) or by the London | |
Bullion Market Association; or (iii) the market price of | |
copper as quoted on the London Metal Exchange (adjusted | |
with reference to the premium or discount quoted by Reuters | |
as applicable). | |
Diesel fuel: | With reference to the retail listing price of diesel fuel quoted |
by Sinopec gas station at Huangshi, Hubei. | |
Parts and equipment: | With reference to the tender prices and the overall market |
condition. | |
Waste circuit boards: | Based on market purchase prices. |
Construction maintenance: | With reference to the relevant prices prescribed by |
Department of Housing and Urban-Rural Development of | |
Hubei Province and the actual tender prices. | |
Engineering labour: | With reference to the relevant prices prescribed under the |
laws and regulations promulgated by the state, provincial | |
and/or municipal construction administrative departments | |
and in accordance with the principle of marketization. | |
Transportation: | Tender-based pricing, price inquiry and price comparison. |
Train loading and unloading: | Price inquiry and price comparison. |
12
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the Parent Group Purchase and Production Services Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | ||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
6,748,587 | 727,765 | 7,812,730 | 650,535 | 10,436,997 | 2,227,485 | 2,176,535 | 2,567,932 | 3,121,564 | ||||||||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by the Group; (ii) projected future orders based on the expected increase in the products and services required as a result of the expected growth in the business of the Group; and (iii) average historical market price and the anticipated future market price for the relevant products and services.
Reasons for the transaction
The products and production services to be provided under the Parent Group Purchase and Production Services Framework Agreement will be important to the operations of the Group. Given the long-term business relationship of the Parent Group and the Group and the close geographical proximity of their respective operations, the Directors consider that the entering into of the Parent Group Purchase and Production Services Framework Agreement will allow the Group to secure a cost effective, timely and stable source of supply of those products and production services, and also to benefit from the procurement network of the Parent Company.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Parent Group Purchase and Production Services Framework Agreement is subject to the reporting, announcement and annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
13
6. Hubei Gold Purchase Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | Hubei Gold | |
Nature of transactions: | Hubei Gold will supply certain products to the Group, | |
including copper concentrate and such other products as | ||
agreed by the parties from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Time and method of payment: | Based on market practice. | |
Pricing mechanism: | Based on (i) the Market Price determined by the Company | |
by way of a comprehensive evaluation method taking into | ||
account comparable quotes from at least two independent | ||
third | parties obtained via public tender or price inquiry, | |
or the price as negotiated by the parties if the relevant | ||
procurement does not require public tender or price | ||
inquiry procedure or (ii) a price determined by the internal | ||
documents of the Group developed with reference to the | ||
Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, prices for the supply of copper concentrate will be determined by the parties on the following basis:
Copper concentrate: | With reference to (as applicable): (i) the market price of |
copper as quoted on the Shanghai Futures Exchange; (ii) the | |
market price of silver as quoted on the Shanghai Huatong | |
Silver Exchange; or (iii) the market price of gold as quoted | |
on the Shanghai Gold Exchange, and taking into account | |
relevant applicable processing costs. |
14
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the Hubei Gold Purchase Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | ||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
83,624 | 75,066 | 97,883 | 14,315 | 114,441 | 32,831 | 69,029 | 77,755 | 91,893 | ||||||||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by the Group with Hubei Gold for the relevant products; (ii) projected future orders based on the expected increase in the products and services required as a result of the expected growth in the business of the Group; and (iii) the average historical market price and the anticipated future market price for the relevant products.
Reasons for the transaction
The Directors consider that the Hubei Gold Purchase Framework Agreement will (i) allow the Group to leverage on the competitive advantages of Hubei Gold to obtain many of the products which the Group requires for its production and operations; and (ii) assist the Group in ensuring a cost-effective, timely and stable source of supply of products and materials required for its operations.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Hubei Gold Purchase Framework Agreement is subject to the reporting, announcement and annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
15
7. Huangshi Xingang Services Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | Huangshi Xingang | |
Nature of transactions: | Huangshi Xingang will supply certain services to the Group, | |
including port loading and unloading of sulfuric acid, | ||
transportation service and such other services as agreed by | ||
the parties from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Time and method of payment: | Based on market practice. | |
Pricing mechanism: | Based on: (i) the government-prescribed price; or (ii) if there | |
is no applicable government-prescribed price, the Market | ||
Price or a price determined by the internal documents of the | ||
Group developed with reference to the Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, prices for the supply of the relevant services will be determined by the parties on the following basis:
Port loading and unloading of sulfuric acid:
As the services will be provided by the only chemical terminal in Huangshi City, the fees for port loading and unloading of sulfuric acid will be negotiated by a single source approach, with the final negotiation result as the final price, which is not less favourable than the terms offered to other independent third parties by the only chemical terminal in Huangshi City in other comparable transactions.
Transportation services: | Tender-based pricing, price inquiry and price comparison. |
16
Proposed Annual Caps
The table below sets out the Proposed Annual Caps for the Huangshi Xingang Services Framework Agreement:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
10,500 | 21,000 | 30,000 | ||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by the Group with other suppliers for the relevant services; (ii) projected future orders based on the expected increase in services required as a result of the expected growth in the business of the Group; and (iii) average historical market price and the anticipated future market price for the relevant services.
Reasons for the transaction
The Directors consider that the Huangshi Xingang Services Framework Agreement will (i) allow the Group to leverage on the competitive advantages of Huangshi Xingang to obtain many of the services which the Group requires for its production and operations; and (ii) assist the Group in ensuring a cost-effective, timely and stable source of supply of services required for its operations.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps is expected to be more than 0.1% but less than 5%, the Huangshi Xingang Services Framework Agreement is subject to the reporting, announcement and annual review requirements, but is exempted from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
8. CNMC Group Purchase Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | CNMC | |
Nature of transactions: | The CNMC Group will: | |
(1) | supply certain products to the Group, including blister | |
copper, copper concentrate, raw materials, auxiliary | ||
equipment, supporting materials, components, | ||
production equipment, tools and such other products as | ||
agreed by the parties from time to time; and |
17
(2) provide certain production services to the Group, | |
including supervision, construction, design, purchase, | |
maintenance and such other production services as | |
agreed by the parties from time to time. | |
Term: | 1 January 2020 to 31 December 2022. |
Time and method of payment: Based on market practice. | |
Pricing mechanism: | Based on: (i) the government prescribed price; (ii) if |
there is no applicable government prescribed price, the | |
Market Price determined by the Company by way of a | |
comprehensive evaluation method taking into account | |
comparable quotes from at least two independent third | |
parties obtained via public tender or price inquiry, or the | |
price as negotiated by the parties if the relevant procurement | |
does not require public tender or price inquiry procedure or | |
a price determined by the internal documents of the Group | |
developed with reference to the Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, prices for the supply of the relevant products and services will be determined by the parties on the following basis:
Blister copper: | With reference to (as applicable): (i) the market price of |
copper as quoted on the Shanghai Futures Exchange or the | |
London Metal Exchange; (ii) the market price of silver as | |
quoted on the Shanghai Huatong Silver Exchange or by the | |
London Bullion Market Association; or (iii) the market price | |
of gold as quoted on the Shanghai Gold Exchange or by the | |
London Bullion Market Association, and taking into account | |
relevant applicable processing costs. | |
Copper concentrate: | With reference to (as applicable): (i) the market price of |
copper as quoted on the Shanghai Futures Exchange, or | |
the London Metal Exchange (adjusted with reference to | |
the premium or discount quoted by Reuters as applicable); | |
(ii) the market price of silver as quoted on the Shanghai | |
Huatong Silver Exchange, the Chicago Mercantile Exchange | |
(adjusted with reference to the premium or discount quoted | |
by Reuters) or the London Bullion Market Association; and | |
(iii) the market price of gold as quoted on the Shanghai Gold | |
Exchange, the Chicago Mercantile Exchange (adjusted with | |
reference to the premium or discount quoted by Reuters) or | |
the London Bullion Market Association, taking into account | |
relevant applicable processing costs. |
18
Raw materials, auxiliary | With reference to the tender prices and the overall market |
equipment, supporting | condition. |
materials, components, | |
production equipment | |
and tools: | |
Maintenance work: | With reference to the relevant prices prescribed by |
Department of Housing and Urban-Rural Development of | |
Hubei Province and the actual tender prices. | |
Supervision: | With reference to the results of public tender in accordance |
with applicable PRC laws and regulations. | |
Construction, design and | With reference to the relevant prices prescribed by |
purchase: | Department of Housing and Urban-Rural Development of |
Hubei Province. |
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the CNMC Group Purchase Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | ||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
1,833,681 | 397,157 | 2,298,958 | 836,297 | 2,868,592 | 908,285 | 4,629,255 | 3,780,591 | 4,140,206 | ||||||||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by the Group; (ii) projected future orders based on the expected increase in the products and services required as a result of the expected growth in the business of the Group; and (iii) the average historical market price and the anticipated future market price for the relevant products and services.
19
Reasons for the transaction
The Directors consider that the entering into of the CNMC Group Purchase Framework Agreement will (i) allow the Group to leverage on the vast resources of the CNMC Group to obtain many of the products and production services which the Group requires for its increasing production capacity and operations; (ii) assist the Group in ensuring a cost-effective, timely and stable source of supply of products, materials and production services required for its operations; and (iii) allow the Company to further diversify its business risks through purchases of blister copper imported from a mine in Zambia, Africa, which offers an alternative, abundant and stable supply, as opposed to the supply in the PRC which is generally insufficient to adequately and promptly satisfy market demand.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the CNMC Group Purchase Framework Agreement is subject to the reporting, announcement and annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
9. Bangfuduo Purchase Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | Bangfuduo International Trade | |
Nature of transactions: | Bangfuduo International Trade will supply certain products | |
to the Group, including copper concentrate and such other | ||
products as agreed by the parties from time to time. |
Term:
Time and method of payment: Pricing mechanism:
1 January 2020 to 31 December 2022.
Based on market practice.
Based on: (i) the government-prescribed price; or (ii) if there is no applicable government-prescribed price, the Market Price or a price determined by the internal documents of the Group developed with reference to the Market Price.
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
20
As at the date of this announcement, prices for the supply of copper concentrate will be determined by the parties on the following basis:
Copper concentrate: | With reference to (as applicable): (i) the market price of |
copper as quoted on the Shanghai Futures Exchange; (ii) the | |
market price of silver as quoted on the Shanghai Huatong | |
Silver Exchange; or (iii) the market price of gold as quoted | |
on the Shanghai Gold Exchange, taking into account | |
relevant applicable processing costs. | |
Proposed Annual Caps |
The table below sets out the Proposed Annual Caps for the Bangfuduo Purchase Framework Agreement:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
1,099,058 | 1,137,039 | 1,137,039 | ||
The above Proposed Annual Caps have been determined with reference to the: (i) historical purchase orders placed by the Group with other suppliers for the relevant products; (ii) projected future orders based on the expected increase in the products required as a result of the expected growth in the business of the Group; and (iii) average historical market price and the anticipated future market price for the relevant products.
Reasons for the transaction
The Directors consider that the Bangfuduo Purchase Framework Agreement will (i) allow the Group to leverage on the competitive advantages of Bangfuduo International Trade to obtain many of the products which the Group requires for its production and operations; and (ii) assist the Group in ensuring a cost-effective, timely and stable source of supply of products and materials required for its operations.
Listing Rules implications
The highest applicable percentage ratio in respect of the Proposed Annual Caps for the Bangfuduo Purchase Framework Agreement exceeds 5%. The Board has approved the transactions contemplated under the Bangfuduo Purchase Framework Agreement. The independent non-executive Directors have confirmed that the terms of the transactions under the Bangfuduo Purchase Framework Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. Therefore, the transactions under the Bangfuduo Purchase Framework Agreement and the proposed annual caps for such transactions are subject to the reporting, annual review and announcement requirements but are exempt from the circular, independent financial advice and independent shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.
21
10. Combined Ancillary Services Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Parent Group will provide certain services to the | |
Group, including steel cylinder inspection and repair, gas | ||
delivery management, waste disposal, green conservation, | ||
vehicle rental, property management, food and beverage and | ||
accommodation, logistics service, mineral water, seedling, | ||
telecommunication and repair, water, electricity, telephone | ||
charges, property repair, training and such other services as | ||
agreed by the parties from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Time and method of payment: | Based on market practice. | |
Pricing mechanism: | Based on: (i) the government-prescribed price; or (ii) if | |
there is no applicable government-prescribed price, the | ||
Market Price determined by the Company by way of a | ||
comprehensive evaluation method taking into account | ||
comparable quotes from at least two independent third | ||
parties obtained via public tender or price inquiry, or the | ||
price as negotiated by the parties if the relevant procurement | ||
does not require public tender or price inquiry procedure, or | ||
a price determined by the internal documents of the Group | ||
developed with reference to the Market Price. |
If the prices and charges are determined based on or with reference to prices, exchange rates or tax rates stated in specific government documents, internal documents of the Group, exchanges or industry-related websites, the effective aforementioned documents, prices and rates at the time of the entry into of specific transaction agreements by the parties shall prevail.
As at the date of this announcement, prices for the provision of the relevant services will be determined by the parties on the following basis:
Steel cylinder inspection and repair, gas delivery management, waste disposal, green conservation, vehicle rental, property management, food and beverage and accommodation and logistics service:
With reference to the operating cost of provision of the service(s).
22
Mineral water and seedling: | For mineral water, with reference to the procurement cost, |
transportation cost and the overall market condition. | |
For seedling, with reference to the relevant prices prescribed | |
by Department of Housing and Urban-Rural Development of | |
Hubei Province. | |
Telecommunication and repair: | With reference to the relevant prices prescribed by Hubei |
Provincial Communications Administration. | |
Water: | With reference to the price of water prescribed by Huangshi |
Price Bureau* (黃石市物價局). | |
Electricity: | With reference to the price of electricity prescribed by |
Hubei Province Price Bureau. | |
Telephone charges: | With reference to the relevant prices prescribed by Hubei |
Provincial Communications Administration. | |
Property repair: | With reference to the relevant prices prescribed by |
Department of Housing and Urban-Rural Development of | |
Hubei Province. | |
Training: | With reference to the relevant standards prescribed under |
the internal document of the Parent Company regarding | |
employee training fees management, which are determined | |
based on the remuneration of the instructors and examination | |
supervisors, costs on preparation of training materials and | |
examination questions, and other relevant costs incurred in | |
providing the training. |
Historical figures, existing annual caps and Proposed Annual Caps
The table below sets out the historical figures, existing annual caps and Proposed Annual Caps for the Combined Ancillary Services Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | ||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
458,792 | 291,765 | 488,604 | 308,045 | 490,758 | 305,526 | 379,020 | 385,323 | 391,613 | ||||||||
23
The above Proposed Annual Caps have been determined with reference to: (i) the historical amounts paid by the Group to the Parent Group for similar ancillary services; (ii) the projected future orders based on the expected increase in the services to be provided during the three years ending 31 December 2022; and (iii) the average historical market price for the relevant services and the anticipated future market price for the relevant products and services.
Reasons for the transaction
The Group currently does not have the capability of providing the ancillary services set out in the Combined Ancillary Services Framework Agreement. The Combined Ancillary Services Framework Agreement will allow the Group to obtain the use of a wide range of support services that it or its employees will require on a day-to-day basis. The provision of such services to the Group will allow the Group to concentrate its resources on its core production operations.
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Combined Ancillary Services Framework Agreement is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
11. Land Lease Framework Agreement
As disclosed in the circular of the Company dated 29 December 2011 (as supplemented and amended by the supplemental circular dated 17 February 2012) and the announcements of the Company dated 8 October 2013 and 3 November 2016 in relation to continuing connected transactions, the Parent Company and the Company previously entered into the Land Lease Framework Agreement. The Company has complied with the relevant requirements under Chapter 14A of the Listing Rules in respect of the annual caps for each of the eight years ending 31 December 2019. As the term of the Land Lease Framework Agreement lasts until 31 December 2039, the Company has renewed the annual caps for another three years ending on 31 December 2022.
Set out below is a summary of the Land Lease Framework Agreement, the transactions contemplated thereunder, the Proposed Annual Caps and the basis for determining the Proposed Annual Caps:
Date: | 23 December 2011 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Parent Group will lease certain parcels of land to the | |
Group. | ||
Term: | From the date on which the Land Lease Framework | |
Agreement takes effect in accordance with its terms until 31 | ||
December 2039. |
24
Rent, fees and other payables: Rent will be the annual depreciation amount of the relevant parcel of land, which will be calculated as the total amount paid by the owner of the land to the relevant government authorities for acquiring the relevant land use right, divided by the estimated useful life of such land. The lessee will also bear all the taxes and duties payable for the lease, which will be calculated by reference to the rent payable. Both the rent and the aggregate taxes and duties payable by the lessee for each parcel of land will be the same for each year during the term of the lease. The above pricing mechanism is adopted since the parcels of land to be leased by members of the Group from the Parent Group are located around the four mines and the smelting plant in Hubei held by the Group and there is no comparable land in the proximity and no corresponding market rent available for reference.
Time and method of payment: Rent is payable annually to the designated bank account of the Parent Company or its relevant subsidiary.
Historical figures, existing annual caps and Proposed Annual Caps
As HKFRS 16 "Lease" has come into effect on 1 January 2019 and be applicable to financial years starting on or after 1 January 2019, pursuant to the requirements of the Stock Exchange, the Proposed Annual Caps relating to the Land Lease Framework Agreement with the Group as the lessee will be set based on the total value of right-of-use assets relating to the leases to be entered into by the Group under the Land Lease Framework Agreement.
The table below sets out the historical figures, existing annual caps and the Proposed Annual Caps relating to the Land Lease Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||
Actual | ||||||||||||||||
amount | ||||||||||||||||
(up to | Proposed | Proposed | Proposed | |||||||||||||
Actual | Actual | 31 October | ||||||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||
(RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | ||||||||||
13,792 | 11,490 | 13,792 | 11,595 | 13,792 | 6,180 | 145,171 | 137,964 | 130,757 | ||||||||
The above Proposed Annual Caps have been determined with reference to (i) the expected number of parcels of land to be leased by the Group from the Parent Group; (ii) the lease term in relation to the leases; (iii) the benchmark borrowing rate set by the People's Bank of China; and (iv) the aggregate rent, taxes and duties payable by the Group for leasing those parcels of land.
Reason for renewing the annual caps for the Land Lease Framework Agreement
The parcels of land under the Land Lease Framework Agreement were previously already leased by the Parent Group to the Group for its production and staff facilities. Renewing the annual caps for the Land Lease Framework Agreement for the three years ending 31 December 2022 would enable the Group to continue using those parcels of land without disruption to its business operations.
25
Listing Rules implications
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 5%, the Land Lease Framework Agreement is still subject to the reporting, announcement, annual review and independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
12. Asset Lease Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | the Parent Company | |
Nature of transactions: | The Group will lease certain assets (including properties, | |
vehicles, equipment and sulfuric acid tank trucks) to the | ||
Parent Group, and also guarantee that the Parent Group will | ||
have the exclusive right to use such assets during the term | ||
of the Asset Lease Framework Agreement. | ||
The Parent Group will lease certain assets (including sulfuric | ||
acid tank trucks, sulfuric acid (by tanks), tank trucks, oil | ||
tank tubes and university student apartments) to the Group, | ||
and also guarantee that the Group will have the exclusive | ||
right to use such assets during the term of the Asset Lease | ||
Framework Agreement. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Pricing Mechanism: | The pricing will be based on the depreciation and related tax | |
amount. | ||
Time and method of payment: | Based on market practice. |
Historical figures, existing annual caps and Proposed Annual Caps
- The Group's lease of assets to the Parent Group
The table below sets out the historical figures, existing annual caps and the Proposed Annual Caps in respect of the Group's lease of assets to the Parent Group under the Asset Lease Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||||
Actual | ||||||||||||||||||
amount | ||||||||||||||||||
(up to | ||||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||||
(RMB'000) | (RMB'000) | (RMB'000) (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | |||||||||||||
18,502 | 12,572 | 18,502 | 10,369 | 18,502 | 493 | 3,513 | 3,513 | 3,513 | ||||||||||
26
The above Proposed Annual Caps were determined with reference to the: (i) estimated amount and types of assets required to be leased by the Parent Group from the Group for its business operations; and (ii) expected leasing fees for such assets in the next three years ending 2022.
- The Parent Group's lease of assets to the Group
The table below sets out the historical figures, existing annual caps and the Proposed Annual Caps in respect of the Parent Group's lease of assets to the Group under the Asset Lease Framework Agreement:
Year ending | Year ending | Year ending | ||||||||||||||||
Year ended | Year ended | Year ending | 31 December | 31 December | 31 December | |||||||||||||
31 December 2017 | 31 December 2018 | 31 December 2019 | 2020 | 2021 | 2022 | |||||||||||||
Actual | ||||||||||||||||||
amount | ||||||||||||||||||
(up to | ||||||||||||||||||
Actual | Actual | 31 October | Proposed | Proposed | Proposed | |||||||||||||
Annual | amount | Annual | amount | Annual | 2019) | annual | annual | annual | ||||||||||
cap | (audited) | cap | (audited) | cap | (unaudited) | cap | cap | cap | ||||||||||
(RMB'000) | (RMB'000) | (RMB'000) (RMB'000) | (RMB'000) | (RMB'000) | (RMB'000) | |||||||||||||
23,704 | 5,156 | 24,142 | 1,474 | 24,178 | 0 | 2,520 | 2,520 | 2,520 | ||||||||||
The above Proposed Annual Caps were determined with reference to the: (i) estimated amount and types of assets required to be leased by the Group from the Parent Group for its business operations; and (ii) expected leasing fees for such assets in the next three years ending 31 December 2022.
Reasons for the transaction
The Directors consider that the Asset Lease Framework Agreement will broaden the revenue base of the Group, increase the revenue of the Group and allow the Group to make more efficient use of its assets. On the other hand, the Asset Lease Framework Agreement will also allow the Group to leverage on the Parent Group's assets which the Group requires for its operations.
Listing Rules implications
As the highest applicable percentage ratio in respect of each of the Group's lease of assets to the Parent Group and the Parent Group's lease of assets to the Group under the Asset Lease Framework Agreement exceeds 0.1% but is less than 5%, the Asset Lease Framework Agreement is subject to the reporting, announcement and annual review requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
27
13. CNMC Financial Services Framework Agreement
Date: | 22 November 2019 | |
Parties: | (1) | the Company |
(2) | CNMC | |
Nature of transactions: | The Group shall provide to the CNMC Group deposit | |
services (namely, the placing of deposits by the Group with | ||
the CNMC Group) and other financial services as agreed by | ||
the parties from time to time. | ||
The CNMC Group shall provide to the Group the following | ||
financial services: loans, guarantees and integrated credit | ||
facilities, bills acceptance and settlement, foreign exchange | ||
settlement and sales and such other financial services as | ||
agreed by the parties from time to time. | ||
Term: | 1 January 2020 to 31 December 2022. | |
Price of services: | With reference to the fees charged by commercial banks | |
for similar services, subject to compliance with applicable | ||
laws and regulations and provisions of the People's Bank of | ||
China on interest rate management. | ||
Time and method of payment: | Based on market practice. | |
Deposit and loan amounts: | The average daily amount of deposits placed by the Group | |
with the CNMC Group must not exceed the average daily | ||
amount of outstanding loans extended by the CNMC Group | ||
to the Group. | ||
Set-off upon default | If the CNMC Group is unable to return on time the deposits | |
on deposits: | (including accrued interest) placed to it by the Group, the | |
Group shall have the right to: (i) terminate the CNMC | ||
Financial Services Framework Agreement; and (ii) set | ||
off such deposits (including accrued interest) against the | ||
outstanding loans (including accrued interest) extended by | ||
the CNMC Group to the Group. | ||
Compensation for losses | CNMC shall fully compensate the Group for any loss | |
suffered by the Group: | incurred by the Group (including in relation to the amount | |
of outstanding deposits or loans and accrued interest or | ||
any | related expenses incurred) as a result of any of the |
following: (i) the CNMC Group breaches, or is likely to breach, any PRC laws or regulations; (ii) the occurrence of, or likely occurrence of, any material problem in the CNMC Group's operations or difficulties in payment; or (iii) the CNMC Group does not comply or breaches the CNMC Financial Services Framework Agreement.
28
Undertaking by the | The CNMC Group undertakes to the Group that if the |
CNMC Group: | CNMC Financial Company experiences or foresees any |
difficulties in payment, the CNMC Group will inject capital | |
into the CNMC Financial Company based on the latter's | |
needs in order to ensure the latter's normal operations. | |
Proposed Annual Caps |
- Deposit services
The Proposed Annual Caps in respect of the deposit services to be provided by the Group to the CNMC Group under the CNMC Financial Services Framework Agreement are:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
2,681,869 | 2,885,041 | 3,110,325 | ||
The above Proposed Annual Caps were determined with reference to the: (i) amount of deposits (including accrued interests) historically made by the Group; (ii) estimated daily cash flow of the Group for the three years ending 31 December 2022, having considered the business operations needs and expected development of the Group; and
- expected interest rate by reference to prevailing interest rates on deposits offered by other finance companies in the PRC.
As the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 25%, the deposit services under the CNMC Financial Services Framework Agreement constitute (i) continuing connected transactions that is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules; and (ii) a major transaction that is subject to the reporting, announcement, annual review and shareholders' approval requirements under Chapter 14 of the Listing Rules.
- Loans, guarantees and integrated credit facilities services
The loans, guarantees and integrated credit facilities services will be provided by the CNMC Group for the benefit of the Company on normal commercial terms similar to those for comparable services in the PRC and no security over the assets of the Group will be granted. Therefore, the provision of such services will constitute continuing connected transactions that are exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.90 of the Listing Rules.
29
- Bills acceptance and settlement and foreign exchange settlement and sales services
The Proposed Annual Caps in respect of the bills acceptance and settlement and foreign exchange settlement and sales services to be provided by the CNMC Group to the Group under the CNMC Financial Services Framework Agreement are:
Year ending | Year ending | Year ending | ||
31 December 2020 | 31 December 2021 | 31 December 2022 | ||
Proposed annual cap | Proposed annual cap | Proposed annual cap | ||
(RMB' 000) | (RMB' 000) | (RMB' 000) | ||
41,482 | 82,673 | 92,491 | ||
The above Proposed Annual Caps were determined with reference to the: (i) fees of bills acceptance, settlement services and foreign exchange settlement and sales historically received by the Group; and (ii) cost of similar financial services charged by other independent commercial banks taking into account the benchmark interest rates quoted by the PBOC from time to time.
As the highest applicable percentage ratios in respect of the bills acceptance and settlement services and foreign exchange settlement and sales under the CNMC Financial Services Framework Agreement exceeds 5%, the bills acceptance and settlement services and foreign exchange settlement and sales under the Financial Services Framework Agreement are subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
Reasons for the transactions
CNMC Financial Company is a non-wholly owned subsidiary of CNMC. It is regulated by PBOC and CBRC to provide financial services to other members of the Parent Group and the CNMC Group. The Directors consider there are numerous advantages of utilising the financial services provided by the CNMC Financial Company over similar services provided by other independent commercial banks in the PRC for the following reasons:
- similar to other independent commercial banks in the PRC, the CNMC Financial Company will be regulated by the PBOC and the CBRC, and will provide services pursuant to the relevant rules and requirements, including capital risk guidelines and requisite capital adequacy ratios of such regulatory authorities;
- the regulation of finance companies (such as the CNMC Financial Company) by the CBRC is more stringent than the regulation of commercial banks in the PRC in certain aspects, for example, finance companies are required to have a higher capital adequacy ratio;
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-
the CBRC will review the operations and management of finance companies in the PRC
pursuant to the Guideline of Risk Assessment and Classified Regulation on Financial Companies of Enterprise Groups (企業集團財務公司風險評價和分類監管指引) which covers areas including a finance company's internal management, operating conditions and the related group's influence over and support to the finance company; and - the CNMC Financial Services Framework Agreement provides the Group with numerous rights and sets out numerous internal control and risk management measures that safeguard the interests of the Company and the Shareholders. For example, the average daily deposits placed by the Group with the CNMC Group must not exceed the average daily outstanding loans. The Group may also set-off any defaulted deposits against any outstanding loans extended by the CNMC Group to the Group and has various rights of compensation. In addition, the CNMC Financial Company shall (and CNMC shall ensure that the CNMC Financial Company shall):
- implement stringent internal control and effective risk management measures (the efficiency and effectiveness of which will be regularly reviewed by the CBRC);
- comply with applicable laws and regulations, and in particular strictly comply with any requirements relating to the management of financial companies under all PRC laws and regulations (including any PRC laws and regulations), as amended from time to time;
- provide the Group with access to the books and accounts of the CNMC Financial Company for inspection as soon as practicable upon the Group's request; and
- when providing financial services to members of the Group, exercise its own judgment and prudent approval process to determine whether to provide such financial services to such members of the Group.
Further, the provision of financial services under the CNMC Financial Services Framework Agreement is expected to render more expedient and efficient financial services to the Group, especially due to the multiple financing channels offered by the CNMC Group. In addition, it is expected that any applicable interest rates for the financial services will be equal to or more favourable to the Group than the benchmark interest rates quoted by the PBOC from time to time, while any other applicable fees and terms will also be equal to or more favourable to the Group than that offered by other independent commercial banks in the PRC, which would reduce the overall financial costs of the Group.
-
INTERNAL CONTROL
The Company has established the connected transactions management committee, which is the discussion and decision-making body for the connected transactions management, and is led by the Board which directly and comprehensively manages the relevant matters of the connected transactions.
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The Company has implemented stringent measures to monitor the pricing standards for the continuing connected transactions of the Group. The department heads of the relevant business departments are responsible for the initial price determination of the proposed connected transactions of the Group. Such initial price determination will be reported to and approved by the finance department of the Company. Then, these prices will be reported to the legal department of the Company, which is responsible for collating from the various business departments such information regarding the proposed connected transactions of the Group, and ensuring that the terms of any such proposed connected transactions are in compliance with applicable laws, rules and regulations. After all these review processes, the legal representative or authorised representative of the Company will execute such connected transactions on behalf of the Company. The capital operation department, finance department and legal department of the Company are responsible for monitoring each of the connected transactions of the Group to ensure that they are conducted in accordance with its terms, including the relevant pricing mechanism and the periodic reporting of the relevant transaction amounts.
Further, each of the Exempt Continuing Connected Transactions and the Non-Exempt Continuing Connected Transactions is subject to the reporting requirements and the annual review by the independent non-executive Directors and the auditors of the Company to ensure that the transactions are conducted in accordance with its terms (including the pricing mechanism) as set out in the Connected Transaction Agreements.
The Board is of the view that the above internal control measures can ensure that the continuing connected transactions of the Group under the Connected Transaction Agreements are conducted on normal commercial terms, 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
In addition to the reasons set out above, the Directors are of the view that the continuing connected transactions set out in this announcement have been and will continue to be beneficial to the Group and will facilitate the growth and development of the Group.
Regarding each of the Exempt Continuing Connected Transactions, the Directors (including the independent non-executive Directors) are of the view that they have been entered into on normal commercial terms, in the ordinary and usual course of business of the Group, and together with the Proposed Annual Caps, are fair and reasonable and in the interest of the Company and the Shareholders as a whole.
Regarding each of the Non-Exempt Continuing Connected Transactions, the Directors (other than the independent non-executive Directors, who will express their views after receiving advice from the independent financial adviser) are of the view that they have been entered into on normal commercial terms, in the ordinary and usual course of business of the Group, and together with the Proposed Annual Caps, are fair and reasonable and in the interest of the Company and the Shareholders as a whole.
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Mr. Wang Yan and Mr. Long Zhong Sheng, who are executive Directors, is also a director of the Parent Company and a director of China Times, respectively. As such, each of Mr. Wang Yan and Mr. Long Zhong Sheng was deemed to have a material interest in, and they have abstained from voting on, the resolutions passed by the Board to approve the Connected Transaction Agreements (other than the Bangfuduo Purchase Framework Agreement) and the transactions contemplated thereunder. Save as disclosed above, none of the Directors has any material interest in, or is required to abstain from voting on the resolutions passed by the Board to approve the Connected Transaction Agreements and the transactions contemplated thereunder.
-
LISTING RULES IMPLICATIONS
As at the date of this announcement, China Times directly held 11,962,999,080 Shares, representing approximately 66.85% of the issued share capital of the Company, and is a wholly owned subsidiary of the Parent Company. Accordingly, the Parent Company is a controlling shareholder of the Company indirectly interested in approximately 66.85% of the issued share capital of the Company, and CNMC is the controlling shareholder of the Parent Company holding approximately 57.99% of the equity interests in the Parent Company. Therefore, each of China Times, the Parent Company and CNMC is a connected person of the Company. Each of Huangshi Xingang and Hubei Gold is indirectly owned by the Parent Company as to more than 30% and are therefore associates of the Parent Company and connected persons of the Company. Zhongse Aobote is indirectly owned by CNMC as to more than 30% and is therefore an associate of CNMC and a connected person of the
Company. Bangfuduo International Trade is a non-wholly owned subsidiary of Huangshi State-owned Assets Management Co., Ltd.* (黃石市國有資產經營有限公司), which directly and indirectly interested in 24% of the equity interests in a joint venture company which will be a subsidiary of the Company upon its establishment, as described in the circular of the Company dated 25 October 2019 in relation to very substantial acquisition and connected transaction. Accordingly, Bangfuduo International Trade is a connected person of the Company at the subsidiary level. Therefore, the transactions contemplated under each of the framework agreements set out in this announcement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.
Regarding each of the Exempt Continuing Connected Transactions (other than the Bangfuduo Purchase Framework Agreement), as the highest applicable percentage ratio in respect of their Proposed Annual Caps exceeds 0.1% but is less than 5%, the Exempt Continuing Connected Transactions are subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
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Regarding the Bangfuduo Purchase Framework Agreement, the highest applicable percentage ratio in respect of the Proposed Annual Caps for the Bangfuduo Purchase Framework Agreement exceeds 5%, and Bangfuduo International Trade is a connected person of the Company at the subsidiary level. The Board has approved the transactions contemplated under the Bangfuduo Purchase Framework Agreement. The independent non-executive Directors have confirmed that the terms of the transactions under the Bangfuduo Purchase Framework Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. Therefore, the transactions under the Bangfuduo Purchase Framework Agreement and the Proposed Annual Caps for such transactions are subject to the reporting, annual review and announcement requirements but are exempt from the circular, independent financial advice and independent shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.
Regarding each of the Non-Exempt Continuing Connected Transactions, as the highest applicable percentage ratio in respect of their Proposed Annual Caps exceeds 5%, the Non-Exempt Continuing Connected Transactions are subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.
Regarding the loans, guarantees and integrated credit facilities services to be provided under the CNMC Financial Services Framework Agreement, such services will be provided by the CNMC Group for the benefit of the Company on normal commercial terms similar to those for comparable services in the PRC and no security over the assets of the Group will be granted. Therefore, the provision of such services will constitute a continuing connected transaction that is exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.90 of the Listing Rules.
Regarding the deposit services to be provided under the CNMC Financial Services Framework Agreement, as the highest applicable percentage ratio in respect of the Proposed Annual Caps exceeds 25%, the provision of such services will constitute (i) a continuing connected transaction that is subject to the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules; and (ii) a major transaction that is subject to the reporting, announcement, annual review and shareholders' approval requirements under Chapter 14 of the Listing Rules.
-
INFORMATION ON THE GROUP, THE PARENT GROUP, THE CNMC GROUP AND BANGFUDUO INTERNATIONAL TRADE
The Group
The Group is principally engaged in the exploitation of mineral resources, the mining and processing of mineral ores and the trading of metal products.
The Parent Group
The Parent Company is a state-owned conglomerate in the PRC. Its controlling shareholder is CNMC, a state-owned enterprise established in the PRC. The principal business of the Parent Group is copper mining and processing. The Parent Group has a fully integrated operation which enables it to undertake the different stages of copper production from mining, processing, smelting and plating, research and development, design to sales and trading.
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China Times is a company incorporated in the British Virgin Islands with limited liability and is principally engaged in investment holding. It is the immediate controlling Shareholder and is a wholly-owned subsidiary of the Parent Company.
Huangshi Xingang is a limited liability company established in the PRC and principally engaged in the businesses of development, construction and operation of a chemical berth and its port facilities (including the rear land area) in Huangshi Xingang.
Hubei Gold is a limited liability company established in the PRC and principally engaged in selecting, mining and sale of gold ore, procurement and sale of chemical products (other than inflammable and explosive materials and hazardous chemicals), construction materials and electromechanical equipment and design of mine engineering and mine technology consulting.
The CNMC Group
CNMC is a PRC state-owned enterprise directly administered by the State-owned Assets Supervision and Administration Commission of the State Council. The CNMC Group is principally engaged in the development of non-ferrous metal resources, construction and engineering, as well as related trade and services, both in the PRC and overseas.
Zhongse Aobote is a limited liability company established in the PRC and principally engaged in the businesses of manufacturing, processing and operation of self-manufactured products (copper and aluminum materials), the export business of technologies and the import business of self-required machinery and equipment, spare parts, raw materials and technologies.
Bangfuduo International Trade
Bangfuduo International Trade is a limited liability company established in the PRC and is principally engaged in the business of sale of mineral products.
-
SPECIAL GENERAL MEETING
The SGM will be convened for the purpose of considering, and if thought fit, approving by poll the Non-Exempt Continuing Connected Transactions and their Proposed Annual Caps. The Parent Company, CNMC and their respective associates will abstain from voting on the resolutions approving the Non-Exempt Continuing Connected Transactions, the transactions contemplated thereunder and the Proposed Annual Caps at the SGM.
Amasse Capital Limited, a corporation licensed by the Securities and Futures Commission to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), has been appointed as the independent financial adviser to advise the independent board committee and the Independent Shareholders regarding the Non-Exempt Continuing Connected Transactions (together with the Proposed Annual Caps). An independent board committee, comprising all three of the independent non-executive Directors, has also be formed to advise the Independent Shareholders on whether or not the Non-Exempt Continuing Connected Transactions (together with the Proposed Annual Caps) are fair and reasonable, on normal commercial terms and in the ordinary and usual course of business of the Group and in the interest of the Company and the Shareholders as a whole.
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A circular containing, among others, (i) further details of the Non-Exempt Continuing Connected Transactions and the Proposed Annual Caps; (ii) the letter of advice from the independent financial adviser; (iii) the letter of recommendation from the independent board committee; (iv) the notice of the SGM; and (v) other information as required under the Listing Rules, is expected to be despatched to the Shareholders on or before 12 December 2019 in accordance with the Listing Rules.
- DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions have the following meanings:
"Asset Lease Framework | the asset lease framework agreement dated 22 November 2019 |
Agreement" | entered into between the Company and the Parent Company, |
the details of which are set out in this announcement | |
"associate(s)" | has the meaning ascribed to it under the Listing Rules |
"Bangfuduo International | Hubei Edong Bangfuduo International Trade Co., Ltd.* (湖 |
Trade" | 北鄂東邦福多國貿有限公司), a limited company established |
in the PRC and is a connected person of the Company at the | |
subsidiary level | |
"Bangfuduo Purchase | the product purchase framework agreement dated 22 November |
Framework Agreement" | 2019 entered into between the Company and Bangfuduo |
International Trade, the details of which are set out in this | |
announcement |
"Board"
"CBRC"
"China Times"
the board of Directors
China Banking Regulatory Commission (中國銀行業監督管理 委員會)
China Times Development Limited, a company incorporated in the British Virgin Islands with limited liability and the immediate controlling Shareholder
"CNMC" | China Nonferrous Metal Mining (Group) Co., Ltd* (中國有色 |
礦業集團有限公司), a limited liability company incorporated | |
in the PRC and a controlling Shareholder | |
"CNMC Financial | Nonferrous Mining Group Finance Company Limited* (有 |
Company" | 色礦業集團財務有限公司), a limited liability company |
incorporated in the PRC and a non-wholly owned subsidiary of | |
CNMC |
36
"CNMC Financial Services | the financial services framework agreement dated 22 November |
Framework Agreement" | 2019 entered into between the Company and CNMC, the |
details of which are set out in this announcement | |
"CNMC Group" | CNMC and its subsidiaries |
"CNMC Group Purchase | the purchase and production services framework agreement |
and Production Services | dated 22 November 2019 entered into between the Company |
Framework Agreement" | and CNMC, the details of which are set out in this |
announcement | |
"Combined Ancillary | the combined ancillary services framework agreement dated |
Services Framework | 22 November 2019 entered into between the Company and |
Agreement" | the Parent Company, the details of which are set out in this |
announcement | |
"Company" | China Daye Non-Ferrous Metals Mining Limited (Stock |
code: 661), a company incorporated in Bermuda with limited | |
liability, the shares of which are listed on the Main Board of | |
the Stock Exchange | |
"connected person(s)" | has the meaning ascribed to it under the Listing Rules |
"connected transaction(s)" | has the meaning ascribed to it under the Listing Rules |
"Connected Transaction | collectively, (i) the Parent Group Sales Framework Agreement, |
Agreements" | (ii) the Huangshi Xingang Sales Framework Agreement, |
(iii) the Zhongse Aobote Sales Framework Agreement, (iv) | |
the Parent Group Services Framework Agreement, (v) the | |
Parent Group Purchase and Production Services Framework | |
Agreement, (vi) the Hubei Gold Purchase Framework | |
Agreement, (vii) the Huangshi Xingang Services Framework | |
Agreement, (viii) the CNMC Group Purchase and Production | |
Services Framework Agreement, (ix) the Bangfuduo Purchase | |
Framework Agreement, (x) the Combined Ancillary Services | |
Framework Agreement, (xi) the Asset Lease Framework | |
Agreement and (xii) the CNMC Financial Services Framework | |
Agreement | |
"Director(s)" | directors of the Company |
"Exempt Continuing | the continuing connected transactions contemplated under each |
Connected Transactions" | of (i) the Parent Group Services Framework Agreement, (ii) the |
Huangshi Xingang Services Framework Agreement, (iii) the | |
Asset Lease Framework Agreement; and (iv) the Bangfuduo | |
Purchase Framework Agreement |
37
"Existing Continuing | collectively, the continuing connected transactions under the | |
Connected Transactions" | following agreements: | |
(i) | the sales framework agreement dated 3 November | |
2016 entered into between the Company and the Parent | ||
Company; | ||
(ii) | the services framework agreement 3 November 2016 | |
entered into between the Company and the Parent | ||
Company; | ||
(iii) | the purchase and production services framework | |
agreement dated 3 November 2016 entered into between | ||
the Company and the Parent Company; | ||
(iv) | the purchase framework agreement dated 3 November | |
2016 entered into between the Company and the Hubei | ||
Gold; | ||
(v) | the purchase and production services framework | |
agreement dated 3 November 2016 entered into between | ||
the Company and CNMC; | ||
(vi) | the combined ancillary services framework agreement | |
dated 3 November 2016 entered into between the | ||
Company and the Parent Company; | ||
(vii) | the asset lease framework agreement dated 3 November | |
2016 entered into between the Company and the Parent | ||
Company; and | ||
(viii) the Land Lease Framework Agreement | ||
"Group" | the Company and its subsidiaries | |
"HKFRS" | the Hong Kong Financial Reporting Standards | |
"Hong Kong" | the Hong Kong Special Administrative Region of the PRC | |
"Huangshi Xingang" | Huangshi Xingang Nonferrous Chemical Terminal Co., Ltd.* | |
(黃石新港有色化工碼頭有限公司), a limited liability company | ||
incorporated in the PRC and an associate of the Parent | ||
Company | ||
"Huangshi Xingang Sales | the sales framework agreement dated 22 November 2019 | |
Framework Agreement" | entered into between the Company and Huangshi Xingang, the | |
details of which are set out in this announcement | ||
"Huangshi Xingang | the services framework agreement dated 22 November 2019 | |
Services Framework | entered into between the Company and Huangshi Xingang, the | |
Agreement" | details of which are set out in this announcement |
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"Hubei Gold" | Hubei Jilong Mountain Gold Mining Company Limited* (湖 |
北雞籠山黃金礦業有限公司), a limited liability company | |
established in the PRC and an associate of the Parent Company | |
"Hubei Gold Purchase | the purchase framework agreement dated 22 November 2019 |
Framework Agreement" | entered into between the Company and Hubei Gold, the details |
of which are set out in this announcement | |
"Independent | the Shareholders other than China Times, the Parent Company, |
Shareholders" | CNMC and their respective associates |
"independent third party" | a person or entity who is not a connected person of the |
Company | |
"Land Lease Framework | the land lease framework agreement dated 23 December 2011 |
Agreement" | entered into between the Company and the Parent Company |
"Listing Rules" | the Rules Governing the Listing of Securities on The Stock |
Exchange of Hong Kong Limited | |
"Market Price" | means such price(s) that: |
(1) the contracting party (as the supplier of products or | |
service) provides such products or services to independent | |
third parties for the same or similar products or services; | |
(2) independent third parties provides such products or | |
services to other independent third parties for the same or | |
similar products or services; or | |
(3) as determined by industry standards or practice for the | |
same or similar products or services | |
"New Continuing | the continuing connected transactions consisting of the |
Connected Transactions" | transactions contemplated under each of (i) the Huangshi |
Xingang Sales Framework Agreement, (ii) the Zhongse Aobote | |
Sales Framework Agreement, (iii) the Huangshi Xingang | |
Services Framework Agreement, (iv) the Bangfuduo Purchase | |
Framework Agreement and (v) the CNMC Financial Services | |
Framework Agreement |
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"Non-Exempt Continuing | the continuing connected transactions consisting of the |
Connected Transactions" | provision of deposit services by the Group to the CNMC Group |
and the bills acceptance and settlement and foreign exchange | |
settlement and sales services by the CNMC Group to the Group | |
under the CNMC Financial Services Framework Agreement | |
and the transactions contemplated under each of (i) the Parent | |
Group Sales Framework Agreement, (ii) the Huangshi Xingang | |
Sales Framework Agreement, (iii) the Zhongse Aobote Sales | |
Framework Agreement, (iv) the Parent Group Purchase and | |
Production Services Framework Agreement, (v) the Hubei | |
Gold Purchase Framework Agreement, (vi) the CNMC Group | |
Purchase and Production Services Framework Agreement, (vii) | |
the Combined Ancillary Services Framework Agreement, and | |
(viii) the Land Lease Framework Agreement | |
"Parent Company" | Daye Nonferrous Metals Group Holdings Company Limited* |
(大冶有色金屬集團控股有限公司), a limited liability company | |
incorporated in the PRC and a controlling Shareholder | |
"Parent Group" | the Parent Company and its subsidiaries |
"Parent Group Purchase | the purchase and production services framework agreement |
and Production Services | dated 22 November 2019 entered into between the Company |
Framework Agreement" | and the Parent Company, the details of which are set out in this |
announcement | |
"Parent Group Sales | the sales framework agreement dated 22 November 2019 |
Framework Agreement" | entered into between the Company and the Parent Company, |
the details of which are set out in this announcement | |
"Parent Group Services | the services framework agreement dated 22 November 2019 |
Framework Agreement" | entered into between the Company and the Parent Company, |
the details of which are set out in this announcement | |
"PBOC" | The People's Bank of China |
"percentage ratio" | has the meaning ascribed to it under Chapter 14 of the Listing |
Rules | |
"PRC" | the People's Republic of China, which for the purpose of |
this announcement, excludes Hong Kong, the Macau Special | |
Administration of the People's Republic of China and Taiwan | |
"Proposed Annual Caps" | the proposed annual caps for each of the three years ending 31 |
December 2022 |
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"RMB"
"SGM"
"Shareholder(s)"
"Stock Exchange"
"Zhongse Aobote"
"Zhongse Aobote Sales Framework Agreement"
"%"
Hong Kong, 22 November 2019
Renminbi, the lawful currency of the PRC
a special general meeting of the Company to be held to consider and if thought fit, approve the Non-Exempt Continuing Connected Transactions and their Proposed Annual Caps
holder(s) of the share(s) of the Company
The Stock Exchange of Hong Kong Limited
Zhongse Aobote Copper Aluminum Co., Ltd.* (中色奧博特銅 鋁業有限公司), a limited liability company incorporated in the PRC and an associate of CNMC
the sales framework agreement dated 22 November 2019 entered into between the Company and Zhongse Aobote, the details of which are set out in this announcement
per cent
By order of the Board
China Daye Non-Ferrous Metals Mining Limited
Wang Yan
Chairman
As at the date of this announcement, the Board comprises four executive directors, namely Mr. Wang Yan, Mr. Long Zhong Sheng, Mr. Yu Liming and Mr. Chen Zhimiao; and three independent non-executive directors, namely Mr. Wang Qihong, Mr. Wang Guoqi and Mr. Liu Jishun.
- for identification purpose only
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China Daye Non-Ferrous Metals Mining Ltd. published this content on 22 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 November 2019 14:26:06 UTC