Glorious Sun Enterprises : Connected Transaction in relation to Provision of Consulting Services

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GLORIOUS SUN ENTERPRISES LIMITED

旭日企業有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 393)

CONNECTED TRANSACTION

IN RELATION TO PROVISION OF CONSULTING SERVICES

CONNECTED TRANSACTION IN RELATION TO PROVISION OF CONSULTING SERVICES

The Board is pleased to announce that on 3 August 2020, Smart Empire, a wholly-owned subsidiary of the Company, entered into the New Consulting Service Agreement with Glory Star, pursuant to which Smart Empire has agreed to provide certain consulting services to Glory Star in relation to financial investments at a consideration of HK$6,000,000 (the "New Transaction").

LISTING RULES IMPLICATION

As at the date of this announcement, Glory Star is held as to 51% by Dr. Charles Yeung and 34% by Mr. Yeung Chun Fan. As each of Dr. Charles Yeung and Mr. Yeung Chun Fan is Director and substantial shareholder of the Company, Glory Star constitutes a connected person of the Company under Chapter 14A of the Listing Rules. Therefore, the New Transaction constitutes a connected transaction of the Company.

On 2 December 2019, Smart Empire entered into the Previous Consulting Service Agreement (together with the New Consulting Service Agreement, the "Consulting Service Agreements") with Glory Star, pursuant to which Smart Empire had agreed to provide certain consulting services to Glory Star in relation to financial investments at a consideration of HK$2,000,000 (the "Previous Transaction"). As the Previous Transaction was conducted on normal commercial terms and one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Previous Transaction were more than 0.1% but less than 5% and the consideration was less than HK$3,000,000, the Previous Transaction was fully exempt from the shareholders' approval and all disclosure requirements under Chapter 14A of the Listing Rules.

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Pursuant to Rule 14A.81 of the Listing Rules, the Previous Transaction and the New Transaction (collectively, the "Transactions") have been aggregated and the total consideration is HK$8,000,000. As the applicable percentage ratios (as defined in the Listing Rules), calculated on an aggregate basis in respect of the Transactions, are more than 0.1% but less than 5%, the Transactions are only subject to the reporting and announcement requirements, but are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

THE NEW CONSULTING SERVICE AGREEMENT

On 3 August 2020, Smart Empire, a wholly-owned subsidiary of the Company, entered into the New Consulting Service Agreement with Glory Star, pursuant to which Smart Empire has agreed to provide certain consulting services to Glory Star in relation to financial investments at a consideration of HK$6,000,000.

The principal terms of the New Consulting Service Agreement are set out below:-

Date of	3 August 2020
agreement
Parties	(i)	Smart Empire, as consulting service provider
	(ii)	Glory Star, as client
Term	3 August 2020 to 31 December 2020 (the "Termination Date"), which
	may be pre-determined by either party upon service of a written notice
	on the other party not less than 30 days in advance
Scope of services	(i)	to provide six research reports (the "Reports", each a "Report")
to be provided by		on various topics relating to global economy and financial
Smart Empire		investments in accordance with the time schedule as detailed in
		the New Consulting Service Agreement, including necessary and
		ancillary services such as one interim report for each Report on
		the progress of report preparation and one round of modification
		after delivery of the Reports upon request
	(ii)	if requested, to provide assistance in Glory Star's investment
		decision making and strategy development based on the
		content/findings/recommendations of the Reports for a period of
		three months after the date of delivery of the Report, subject to
		the Termination Date
Consulting fees	A separate fee in different amount is payable for each Report as detailed
	in the New Consulting Service Agreement, totaling HK$6,000,000 for
	all six Reports

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Payment	Smart Empire shall send an invoice to Glory Star at the same time as a
	Report is being provided, on or before the Termination Date. The
	invoice is due and payable by Glory Star within 30 days of receipt

THE PREVIOUS CONSULTING SERVICE AGREEMENT

On 2 December 2019, Smart Empire entered into the Previous Consulting Service Agreement with Glory Star, pursuant to which Smart Empire had agreed to provide certain consulting services to Glory Star in relation to financial investments at a consideration of HK$2,000,000.

The principal terms of the Previous Consulting Service Agreement are set out below:-

Date of	2 December 2019
agreement
Parties	(i)	Smart Empire, as consulting service provider
	(ii)	Glory Star, as client
Term	2 December 2019 to 20 December 2019
Scope of services	to provide a research report on investment strategies as detailed in the
provided by	Previous Consulting Service Agreement
Smart Empire
Consulting fees	HK$2,000,000
Payment	Smart Empire shall send an invoice to Glory Star when delivering the
	report. The invoice is due and payable by Glory Star within 30 days of
	receipt

Under the Previous Transaction, the research report was delivered to Glory Star on 20 December 2019 and a consulting fee of HK$2,000,000 was paid by Glory Star.

REASONS FOR AND BENEFITS OF ENTERING INTO THE CONSULTING SERVICE AGREEMENTS AND THE TRANSACTIONS

The Group is principally engaged in (a) the retailing and export of casual wear; (b) financial investments; and (c) interior decoration and renovation. Smart Empire is an indirect wholly- owned subsidiary of the Company and is principally engaged in the provision of financial consulting services. The Board considers that the provision of consulting services by Smart Empire to Glory Star is in the usual and ordinary course of business of the Group and is expected to generate reasonable income for the Group.

The terms of the Consulting Service Agreements and the Transactions contemplated thereunder, including the amount of consulting fees chargeable, were determined after arm's length negotiations by Smart Empire and Glory Star with reference to the prevailing market conditions for comparable consulting services. In particular, when determining the level of

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consulting fees chargeable, the estimated manpower and resources to be involved in the preparation for each Report and the standard hourly rates charged by the relevant research analysts responsible for the project was taken into account. The Board (including the independent non-executive Directors) considers that the Consulting Service Agreements were entered into in the ordinary and usual course of business of the Group, and the terms of the Consulting Service Agreements and the Transactions contemplated thereunder are on normal commercial terms and not more favourable as compared to those to be offered to independent third parties, are fair and reasonable and in the interests of the Company and the Company's shareholders as a whole.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Glory Star is held as to 51% by Dr. Charles Yeung and 34% by Mr. Yeung Chun Fan. As each of Dr. Charles Yeung and Mr. Yeung Chun Fan is Director and substantial shareholder of the Company, Glory Star constitutes a connected person of the Company under Chapter 14A of the Listing Rules. Therefore, the New Transaction contemplated under the New Consulting Service Agreement constitutes a connected transaction of the Company.

On 2 December 2019, Smart Empire entered into the Previous Consulting Service Agreement with Glory Star, pursuant to which Smart Empire had agreed to provide certain consulting services to Glory Star in relation to financial investments at a consideration of HK$2,000,000. As the Previous Transaction was conducted on normal commercial terms and one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Previous Transaction were more than 0.1% but less than 5% and the consideration was less than HK$3,000,000, the Previous Transaction was fully exempt from the shareholders' approval and all disclosure requirements under Chapter 14A of the Listing Rules.

Pursuant to Rule 14A.81 of the Listing Rules, the Transactions have been aggregated and the total consideration is HK$8,000,000. As the applicable percentage ratios (as defined in the Listing Rules), calculated on an aggregate basis in respect of the Transactions, are more than 0.1% but less than 5%, the Transactions are only subject to the reporting and announcement requirements, but are exempt from the circular (including independent financial advice) and shareholders' approval requirements under Chapter 14A of the Listing Rules.

INFORMATION ON THE PARTIES

The Group is principally engaged in (a) the retailing and export of casual wear; (b) financial investments; and (c) interior decoration and renovation. Smart Empire is an indirect wholly- owned subsidiary of the Company and is principally engaged in the provision of financial consulting services and is a licensed corporation permitted to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities within the meaning of the SFO.

Glory Star is principally engaged in investment, design and development of apparel products and management services.

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GENERAL

Dr. Charles Yeung and Mr. Yeung Chun Fan, who have a material interest in the Consulting Service Agreements, and Ms. Cheung Wai Yee, a Director and the spouse of Mr. Yeung Chun Fan, did not attend the Board meeting at which the Board resolutions in respect of the Consulting Service Agreements and the Transactions contemplated thereunder were considered and passed nor vote on such Board resolutions. Ms. Yeung Yin Chi, Jennifer, a Director and a niece of Dr. Charles Yeung and Mr. Yeung Chun Fan, abstained from voting on the relevant resolutions at the Board meeting for approving the Consulting Service Agreements and the Transactions contemplated thereunder. Save as disclosed above, none of the other Directors was required to abstain from voting on the relevant Board resolutions according to the bye-laws of the Company or any applicable laws and regulations.

DEFINITIONS

In this announcement, the following expressions shall (unless the context otherwise requires) have the following meanings:

"Board"	the board of Directors
"Company"	Glorious Sun Enterprises Limited 旭 日 企 業 有 限 公 司 ,	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)",	each has the meaning ascribed to it under the Listing Rules
"subsidiary(ies)" and
"substantial shareholder"
"Directors"	the directors of the Company
"Glory Star"	Glory Star Investments Limited ( 安 星 投 資 有 限 公 司 ),	a
	company incorporated in Hong Kong with limited liability
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollar(s), the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the People's
	Republic of China
"Listing Rules"	the rules governing the listing of securities on the Stock
	Exchange
"New Consulting Service	the consulting service agreement dated 3 August 2020 and
Agreement"	entered into between Smart Empire and Glory Star
"Previous Consulting	the consulting service agreement dated 2 December 2019 and
Service Agreement"	entered into between Smart Empire and Glory Star
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"SFO"

"Smart Empire"

Securities and Futures Ordinance (Cap. 571 of the laws of Hong Kong)

Smart Empire Asset Management Limited (明堡資產管理有限 公司), a company incorporated in Hong Kong with limited liability

"Stock Exchange"The Stock Exchange of Hong Kong Limited

"%"

per cent

By Order of the Board

Glorious Sun Enterprises Limited

Hui Chung Shing, Herman, SBS, MH, JP

Director

Hong Kong, 3 August 2020

As at the date of this announcement, the directors of the Company are as follows:

Executive Directors:

Dr. Charles Yeung, GBS, JP, Mr. Yeung Chun Fan, Mr. Pau Sze Kee, Jackson, Mr. Hui Chung Shing, Herman, SBS, MH, JP, Ms. Cheung Wai Yee, Mr. Chan Wing Kan, Archie and Ms. Yeung Yin Chi, Jennifer

Independent Non-executive Directors:

Mr. Lau Hon Chuen, Ambrose, GBS, JP, Dr. Chung Shui Ming, Timpson, GBS, JP, Dr. Chan Chung Bun, Bunny, GBS, JP and Mr. Ng Wing Ka, Jimmy, BBS, JP

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