Th e S t o c k E x c h a n g e o f Ho n g K o n g Li mi t e d t a k e s n o re sp o n si b i l i t y f o r t h e c o n t e n t s o f t h i s announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
On 10 September 2012, Zhongnuo, a non-wholly owned subsidiary
of the Company, entered into the Master Agreement with
Guangdong Titan in relation to the sale and purchase of the
Antibiotics Products for a term commencing from 10 September
2012 and expiring on 9 September 2015. Guangdong Titan is a
wholly-owned subsidiary of a substantial shareholder of
Siping, a non- wholly owned subsidiary of the Company,
accordingly a connected person of the Company and the
Transactions constitute continuing connected transactions of
the Company under the Listing Rules.
Since the applicable percentage ratios are, on an annual
basis, more than 1% but less than 5%, the Transactions are
only subject to reporting, announcement and annual review
requirements and are exempt from the independent
shareholders' approval requirement under Chapter 14A of the
Listing Rules.
10 September 2012
Parties
1. Zhongnuo, a non-wholly owned subsidiary of the Company, as
seller
2. Guangdong Titan, a connected person of the Company, as
purchaser
A term commencing from 10 September 2012 to 9 September
2015
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Sale and purchase of the Antibiotics Products
TermsThe Master Agreement sets out the general terms and conditions for the sale and purchase of the Antibiotics Products by Zhongnuo to Guangdong Titan. The prices and payment terms of the Transactions shall be negotiated by Zhongnuo and Guangdong Titan from time to time with reference to prevailing market prices, on normal commercial terms and on terms no less favourable to Zhongnuo than those available to Zhongnuo from independent third parties.
Historical transactionsThe amount of sales from Zhongnuo to Guangdong Titan for the Antibiotics Products for the two financial years ended 31 December 2010 and 2011 amounted to approximately RMB11,439,000 and RMB30,492,000 respectively.
Annual Caps
The annual caps for the Transactions during the term of the
Master Agreement are as follows:
For the period from 10 September 2012 to 31 December 2012
RMB20,000,000 (approximately HK$24,390,000)
For the year ending 31 December 2013 RMB37,000,000
(approximately HK$45,122,000)
For the year ending 31 December 2014 RMB37,000,000
(approximately HK$45,122,000)
For the period from 1 January 2015 to 9 September 2015
RMB30,000,000 (approximately HK$36,585,000)
The annual caps are determined by reference to the historical sales amounts for the Transactions and the expected growth in business between Zhongnuo and Guangdong Titan.
REASONS FOR AND BENEFITS OF THE TRANSACTIONS
Guangdong Titan is an existing customer of the Group. By
entering into the Master Agreement, the
Group will be able to maintain its business relationship with
Guangdong Titan.
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The Board (including the independent non-executive Directors)
is of the opinion that the Master Agreement was entered into
(i) in the ordinary and usual course of business of the
Group, (ii) on normal commercial terms agreed after arm's
length negotiation between the parties; and (iii) on terms
that are fair and reasonable and in the interests of the
Company and its shareholders as a whole.
Zhongnuo is a non-wholly owned subsidiary of the Company.
Guangdong Titan is a wholly-owned subsidiary of a substantial
shareholder of Siping, a non-wholly owned subsidiary of the
Company. Accordingly, Guangdong Titan is a connected person
of the Company and the Transactions constitute continuing
connected transactions of the Company under the Listing
Rules.
Since the applicable percentage ratios are, on an annual
basis, more than 1% but less than 5%, the Transactions are
only subject to reporting, announcement and annual review
requirements and are exempt from the independent
shareholders' approval requirement under Chapter 14A of the
Listing Rules.
None of the Directors has a material interest in the
Transactions which requires him to abstain from voting on the
resolution of the Board approving the Master Agreement and
the Transactions pursuant to Rule 13.44 of the Listing Rules
and the Articles of Association of the Company.
The principal activity of the Company is investment holding.
The principal activities of the subsidiaries of the Company
include the manufacture and sales of pharmaceutical
products.
Guangdong Titan is principally engaged in the manufacture and
sales of bulk cephalosporin products and fine chemicals in
Guangdong Province of the PRC.
"Antibiotics Products" various intermediate and bulk
antibiotics products, including without limitation D-7ACA
"Board" the board of Directors
"Company" China Pharmaceutical Group Limited, a company
incorporated in Hong Kong with limited liability, the shares
of which are listed on the Stock Exchange
"Directors" the directors of the Company
"Group" the Company and its subsidiaries
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"Guangdong Titan" J1 * iL