elec & eltek international company limited 依利安達集團有限公司 · 2013. 11. 12. ·...

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in reliance upon the whole or any part of the contents of this announcement.

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any of the statements made, reports contained, or opinions expressed in this announcement.

Elec & Eltek International Company Limited依利安達集團有限公司*

(Incorporated in the Republic of Singapore with Limited Liability)

Singapore Company Registration Number: 199300005H(Hong Kong Stock Code: 1151)(Singapore Stock Code: E16.SI)

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

Reference is made to the Existing Continuing Connected Transaction Agreementsentered into between certain members of the EEIC Group and certain members ofthe Kingboard Group, as described in the 2011 Listing Document. The annual capsunder the Existing Continuing Connected Transaction Agreements will expire on31 December 2013. The EEIC Group and the Kingboard Group would like to renewcertain Existing Continuing Connected Transaction Agreements and set out theproposed annual caps thereof for the three years commencing on 1 January 2014and ending on 31 December 2016 as more particularly described in thisannouncement.

As at the date of this announcement, Kingboard, through its wholly-ownedsubsidiaries, owns approximately 69.41% of the issued share capital of theCompany and is therefore a connected person of the Company. Accordingly, thetransactions contemplated under the New Rental Sharing and Cost ReimbursementAgreements, New Equipment Purchase Framework Agreement and New MasterSales and Purchases Agreement constitute continuing connected transactions of theCompany under Chapter 14A of the HK Listing Rules.

— 1 —

14.58(1)

13.52(Note 5)

13.51A

As each of the applicable percentage ratios (under Chapter 14A of the HK ListingRules) of the aggregate fees to be paid and received by the EEIC Group on anannual basis under the New Rental Sharing and Cost Reimbursement Agreementsfor each of the three years ending 31 December 2014, 2015 and 2016 equals to orexceeds 0.1% but is less than 5%, the transactions contemplated under the NewRental Sharing and Cost Reimbursement Agreements are exempt from theindependent shareholders’ approval requirement but are subject to the annualreview, reporting and announcement requirements under Rule 14A.34 of the HKListing Rules.

As one or more of the applicable percentage ratios (under Chapter 14A of the HKListing Rules) of the aggregate amount to be paid by the EEIC Group on an annualbasis under the New Equipment Purchase Framework Agreement for each of thethree years ending 31 December 2014, 2015 and 2016 is/are equal to or greaterthan 5%, the transactions contemplated under the New Equipment PurchaseFramework Agreement are subject to the annual review, reporting, announcementand independent shareholders’ approval requirements under Rule 14A.35 of theHK Listing Rules.

As one or more of the percentage ratios (under Chapter 14A of the HK ListingRules) of the aggregate amount to be paid or received by the EEIC Group (as thecase may be) on an annual basis under the New Master Sales and PurchasesAgreement for each of the three years ending 31 December 2014, 2015 and 2016is/are equal to or greater than 5%, the transactions contemplated under the NewMaster Sales and Purchases Agreement are subject to the annual review, reporting,announcement and independent shareholders’ approval requirements under Rule14A.35 of the HK Listing Rules.

A circular containing, inter alia, (i) further details of the New Equipment PurchaseFramework Agreement, the New Master Sales and Purchases Agreement and thetransactions and the Proposed Annual Caps contemplated thereunder, respectively;(ii) the opinion from the independent financial adviser; (iii) the recommendationfrom the independent board committee (comprising the INEDs); and (iv) the noticeof the EGM and other information as required under the HK Listing Rules isexpected to be despatched by the Company to the Shareholders within 15 businessdays after the publication of this announcement.

— 2 —

A. INTRODUCTION

Reference is made to the Existing Continuing Connected Transaction Agreements

entered into between certain members of the EEIC Group and certain members of the

Kingboard Group, as described in the 2011 Listing Document. The annual caps under

the Existing Continuing Connected Transaction Agreements will expire on 31

December 2013. The EEIC Group and the Kingboard Group would like to renew

certain Existing Continuing Connected Transaction Agreements and set out the

proposed annual caps thereof for the three years commencing on 1 January 2014 and

ending on 31 December 2016 as more particularly described in this announcement.

B. NEW RENTAL SHARING AND COST REIMBURSEMENTAGREEMENTS

On 12 November 2013, certain members of the EEIC Group entered into various

agreements with certain members of the Kingboard Group (together, the “NewRental Sharing and Cost Reimbursement Agreements”) in relation to the sharing

of office space and office expenses and the sharing of corporate and administrative

services. The details of New Rental Sharing and Cost Reimbursement Agreements are

set out below:

1. Rental sharing agreement (Hong Kong)

Date: 12 November 2013

Parties: (1) The Company

(2) EE Multilayer, a wholly-owned subsidiary of theCompany and a member of the EEIC Group

(3) EECSL, a wholly-owned subsidiary of EEIH anda member of the EEIH Group (and hence amember of the Kingboard Group)

Nature of transaction: The Company and EECSL agree to share between theEEIC Group and the EEIH Group the rent and servicecharges relating to a space located at 1st Floor, No. 12Science Park East Avenue, Phase Two, Hong KongScience Park, Pak Shek Kok, Tai Po, New Territories,Hong Kong (the “Science Park Premise”).

— 3 —

14.58(3)14.58(4)14A.56(2)

14.60(1)

Term: One year from 1 January 2014 to 31 December 2014.

Consideration: The Company and EECSL shall share the rent andservice charges relating to the Science Park Premisein proportion to their respective usage rates of theScience Park Premise as mutually agreed by theCompany and EECSL from time to time. The paymentof the rent and service charges attributable to theCompany shall be made by EE Multilayer or suchother subsidiary as designated by the Company toEECSL on a monthly basis. The estimated amount ofusage attributable to the Company will not exceedUSD45,000 for the year ending 31 December 2014.

2. Cost reimbursement agreement (Hong Kong)



(2) EECSL, a wholly-owned subsidiary of EEIH anda member of the EEIH Group (and hence amember of the Kingboard Group)

Nature of transaction: EECSL will provide corporate services such as (i)legal and company secretarial services; (ii) officeadministration; (iii) financial services; and (iv) anyother services as may be within the capacity, powerand objects of EECSL and may reasonably berequired from time to time by the EEIC Group uponmutual agreement between EECSL and the Company.

Term: Three years from 1 January 2014 to 31 December2016.

— 4 —

14.58(3)14.58(4)14A.56(2)

14.60(1)

Consideration: The Company and EECSL agree to share between theEEIC Group and the EEIH Group the operationalcosts to be incurred, directly or indirectly, in theperformance of the services at the prescribed usagerates based on the total headcount of employees ofEECSL in its Hong Kong office or such otherprescribed resource allocation method as mutuallyagreed by the Company and EECSL. Such prescribedresource allocation method may be modified, alteredand re-negotiated by the Company and EECSL fromtime to time. The payment of service fee shall bemade by the Company or any of its subsidiaries asdetermined by the Company on a monthly basis. TheCompany and EECSL estimate that EECSL willprovide the services to the EEIC Group at an annualaggregate fee of not more than USD481,000,USD473,000 and USD491,000 for each of the threeyears ending 31 December 2014, 2015 and 2016,respectively.

3. Office rental agreements (Shanghai)


Parties: (1) Zhande, a wholly-owned subsidiary of Kingboard(a member of the Kingboard Group)

(2) Joyful, a wholly-owned subsidiary of Kingboard(a member of the Kingboard Group)

(3) Yisheng Branch, a branch company of Yisheng.Yisheng is a wholly-owned subsidiary of theCompany (a member of the EEIC Group)

(4) EE Multilayer, a wholly-owned subsidiary of theCompany (a member of the EEIC Group)

Nature of transaction: Pursuant to a rental agreement dated 12 November2013 entered into by Zhande and Yisheng Branch (the“Rental Agreement”), Yisheng Branch shall rent anoffice space owned by Zhande which is located atRoom 2903A, Tower 1, 369 Xian Xia Road,Changning District, Shanghai, PRC (the “ShanghaiPremise”).

— 5 —

14.58(3)14.58(4)14A.56(2)

14.60(1)


Consideration: Under the Rental Agreement, Yisheng Branch shallpay a monthly rent in the amount of RMB7,000(equivalent to approximately USD1,148) subject toadjustments (if any) as mutually agreed between theparties (the “Monthly Rent”) to Zhande for theShanghai Premise. Yisheng Branch is responsible forthe property management fees, utilities and certainmaintenance fees. On 12 November 2013, Zhande andYisheng Branch entered into a supplementalagreement to the Rental Agreement, pursuant towhich Yisheng Branch shall pay an extra amount ofHK$10,000 (equivalent to approximately USD1,290)subject to adjustments (if any) as mutually agreedbetween the parties in addition to the Monthly Rentrelating to the Shanghai Premise (the “AdditionalMonthly Rent”). Pursuant to an agreement dated 12November 2013 entered into by Zhande, Joyful,Yisheng Branch and EE Multilayer, Zhande wouldappoint Joyful as its designated payee and YishengBranch would appoint EE Multilayer as its designatedpayer for the Additional Monthly Rent. All paymentsto be made under these agreements shall be made ona monthly basis.

The estimated Monthly Rent for each of the threeyears ending 31 December 2014, 2015 and 2016 willbe approximately USD15,000, USD17,000 andUSD18,000, respectively. The estimated AdditionalMonthly Rent for each of the three years ending 31December 2014, 2015 and 2016 will be approximatelyUSD17,000, USD19,000 and USD21,000,respectively.

4. Cost reimbursement agreement (Malaysia)


Parties: (1) EEMCO, a wholly-owned subsidiary of theCompany and a member of the EEIC Group

(2) EEDTL, a wholly-owned subsidiary of EEIH anda member of the EEIH Group (hence a member ofthe Kingboard Group)

— 6 —

Nature of transaction: EEMCOMRO, a representative office of EEMCOwhich is registered in Malaysia, shall share an officespace with EEDTL which is located at No.3 (2ndfloor), Jalan Todak 2, 13700 Bandar Sunway,Seberang Jaya, Pulau Pinang, Malaysia (“MalaysiaPremise”) (or, as the case may be, certain officespace of the Malaysia Premise or any other premise inMalaysia as mutually agreed by EEMCO and EEDTLfrom time to time). Pursuant to the agreement,EEDTL agrees to reimburse the attributable rent,service charges (including but not limited tohousekeeping services and utilities), other commonoffice expenses, staff related costs and administrativeservice fee to EEMCOMRO.

Term: Three years from 1 January 2014 to 31 December2016

Consideration: EEDTL agrees to reimburse the attributable rent,service charges (including but not limited tohousekeeping services and utilities) in proportion toits respective usage rates of the Malaysia Premise (or,as the case may be, certain office space of theMalaysia Premise or any other premise in Malaysia asmutually agreed by EEMCO and EEDTL from time totime), other common office expenses relating to theheadcount in the Malaysia Premise (or, as the casemay be, certain office space of the Malaysia Premiseor any other premise in Malaysia as mutually agreedby EEMCO and EEDTL from time to time), staffrelated costs based on actual payroll expenses of theconcerned employee(s), and administrative servicefee which would be a nominal charge, toEEMCOMRO on a monthly basis. The estimated totalamount of reimbursement will be approximately notmore than USD46,000, USD54,000 and USD60,000for each of the three years ending 31 December 2014,2015 and 2016, respectively.

— 7 —

5. Property management services agreement


Parties: (1) PIC, a wholly-owned subsidiary of the Companyand a member of the EEIC Group

(2) EE Computers, a wholly-owned subsidiary ofEEIH and a member of the EEIH Group (hence amember of the Kingboard Group)

Nature of transaction: Upon entering into a tenancy agreement between EEComputers and a proposed tenant in relation to apremise owned by EE Computers located at Unit B10on 3rd Floor of Merit Industrial Centre, No. 94 ToKwa Wan Road, Kowloon, Hong Kong (the “EEComputers Premise”), PIC shall provide propertymanagement services to EE Computers in respect ofthe EE Computers Premise and EE Computers shallpay PIC a monthly management fee.


Consideration: Pursuant to the agreement, EE Computers agrees topay PIC a monthly management fee (the“Management Fee”) to PIC equivalent to themonthly rental income (the “Monthly Rent”)received by EE Computers under a tenancy agreementin respect of the EE Computers Premise entered intobetween EE Computers as landlord and a proposedtenant (if any). EE Computers shall authorise theproposed tenant (if any) in writing to pay the MonthlyRent directly to PIC’s bank account as payment of theManagement Fee on a monthly basis. The estimatedannual fee for the provision by PIC of such propertymanagement services to EE Computers for each of thethree years ending 31 December 2014, 2015 and 2016will be approximately not more than USD57,000.

— 8 —

Historical figures, Existing Annual Caps and Proposed Annual Caps

The table below sets out the historical figures and the Existing Annual Caps in

relation to the fees payable by the EEIC Group to the Kingboard Group (namely

category 1a as stated on page 150 of the 2011 Listing Document) under the relevant

Existing Rental Sharing and Cost Reimbursement Agreements and the Proposed

Annual Caps under the New Rental Sharing and Cost Reimbursement Agreements.

Year ended31 December 2011

Year ended31 December 2012 Year ending 31 December 2013

Year ending31 December

2014


2015


2016

Annualcap

Actualamount

Annualcap

Actualamount

Annualcap

Actualamount

(up to30 September

2013)

Estimatedamount

(up to31 December

2013)Proposed

annual capProposed

annual capProposed

annual cap

(USD’000) (USD’000) (USD’000) (USD’000) (USD’000) (USD’000) (USD’000) (USD’000) (USD’000) (USD’000)

967 813 1,014 734 1,065 553 740 558 509 530


relation to the fees payable by the Kingboard Group to the EEIC Group (namely

category 1b as stated on page 150 of the 2011 Listing Document) under the relevant

Existing Rental Sharing and Cost Reimbursement Agreements (note) and the

Proposed Annual Caps under the New Rental Sharing and Cost Reimbursement

Agreements.




2014


2015


2016

Annualcap

Actualamount

Annualcap

Actualamount

Annualcap

Actualamount

(up to30 September

2013)

Estimatedamount

(up to31 December

2013)Proposed

annual capProposed

annual capProposed

annual cap


272 179 600 108 694 63 84 103 111 117

Note: As disclosed in the 2011 Listing Document, the EEIC Group and the Kingboard Group entered

into a cost reimbursement agreement for the sharing of an office space and certain office

expenses in relation to a premise in Singapore. The agreement will expire on 31 December

2013 and will not be renewed by the parties.

— 9 —

14A.56(4)

The Proposed Annual Caps under the New Rental Sharing and Cost Reimbursement

Agreements were determined with references to (i) the prevailing market rate; (ii) the

existing relative proportion of use of office space and office services; (iii) the number

of staff utilised; and (iv) inflation.

Reasons for and benefits of entering into the New Rental Sharing and CostReimbursement Agreements

The Directors consider that the sharing of the office space and office expenses and

corporate and administrative services arrangement will benefit the EEIC Group in

that both the EEIC Group and the Kingboard Group can enjoy economies of scale

brought by the sharing of expenses which will maximise cost efficiency and

management effectiveness.

The Directors are of the view that the New Rental Sharing and Cost ReimbursementAgreements are entered into on normal commercial terms, in the ordinary and usualcourse of business of the EEIC Group and that the terms of the New Rental Sharingand Cost Reimbursement Agreements are fair and reasonable and in the interests ofthe Shareholders as a whole.

C. NEW EQUIPMENT PURCHASE FRAMEWORK AGREEMENT

On 12 November 2013, the Company entered into a framework agreement for thepurchase of Equipment with Kingboard (the “New Equipment Purchase FrameworkAgreement”), details of which are set out below:

1. The New Equipment Purchase Framework Agreement



(2) Kingboard

— 10 —

14.58(5)

14.58(8)

14A.56(1)

14.58(3)14.58(4)14A.56(2)

Nature of transaction: Pursuant to the New Equipment Purchase FrameworkAgreement, the Kingboard Group (including, for thepurpose of this agreement, the associated companiesof Kingboard as defined in the Singapore ListingManual) will sell certain Equipment to the EEICGroup (including, for the purpose of this agreement,the associated companies of the Company as definedin the Singapore Listing Manual) from time to time inaccordance with the terms of such agreement. TheNew Equipment Purchase Framework Agreementcomprises the general terms and conditions uponwhich the EEIC Group may purchase Equipment fromthe Kingboard Group. The EEIC Group and theKingboard Group may from time to time enter intopurchase agreements or the EEIC Group may submitpurchase orders setting out the detailed terms for thepurchase of the Equipment provided that suchdetailed terms shall not be inconsistent with the termsof the New Equipment Purchase FrameworkAgreement. The Kingboard Group will not beobligated to sell any prescribed quantity ofEquipment or at any specific prices to the EEICGroup during the term of the New EquipmentPurchase Framework Agreement.


— 11 —

14.60(1)

Consideration: The prices at which the Equipment are to be suppliedby the Kingboard Group to the EEIC Group shall bethe market price mutually agreed between theKingboard Group and the EEIC Group, or if the sameis not available, a price which is not less favourableto the EEIC Group than the price at which theKingboard Group supplies similar Equipment toindependent third parties having regard to the quality,quantity and other conditions of the purchase. For thepurpose of the market price, the Company willconsider the price offered by independent third partysuppliers of similar Equipment (if any). In particular,the relevant purchasing department of the Companywill obtain quotations from such independent thirdparty suppliers (if any) and monitor the generalmovement of market price from time to time.

Terms of payment: Unless otherwise agreed between the parties to theagreement, the payment term shall be prescribed asfollows: (a) a deposit of 30% of the purchase pricepayable upon execution of the agreement or purchaseorder; (b) 50% of the purchase price will be duewithin one month upon the Equipment is received bythe EEIC Group (including, for the purpose of thisagreement, the associated companies of the Companyas defined in the Singapore Listing Manual); and (c)the balance of 20% of the purchase price will be duewithin one month following the certified acceptanceof the Equipment as suitable for use. Payment termfor different type of Equipment categories may besubject to other progressive payment terms asmutually agreed between the parties from time totime.



relation to the fees payable by the EEIC Group to the Kingboard Group under the

Existing Equipment Purchase Framework Agreement (namely category 2 as stated on

page 150 of the 2011 Listing Document) and the Proposed Annual Caps under the

New Equipment Purchase Framework Agreement.

— 12 —




2014


2015


2016

Annual capActual

amount Annual capActual

amount Annual cap

Actualamount

(up to30 September

2013)

Estimatedamount

(up to31 December

2013)Proposed

annual capProposed

annual capProposed

annual cap


22,568 9,053 28,586 6,707 30,918 8,385 9,385 15,733 19,009 20,393

The Proposed Annual Caps under the New Equipment Purchase FrameworkAgreement were determined with reference to the internal projection of the purchasesto be incurred having regard to (i) the average annual growth rate of 3.8% of theglobal PCB market, according to Prismark Partners LLC; (ii) normal wear-and-tearof the Equipment; (iii) the anticipated growth in demand for Equipment; (iv) theprevailing market prices of Equipment; (v) inflation; (vi) the expected sales of theEEIC Group; and (vii) the business development plan of the EEIC Group, includingthe expansion of the market share of certain PCB-related industries such as the highdensity interconnect PCB market and the automotive-related PCB market. Barringunforeseeable circumstances, the EEIC Group expects to increase their productioncapacity of PCB products by approximately 15%, 16% and 10% in 2014, 2015 and2016, respectively. It is assumed that total purchase of Equipment would amount toapproximately 9%-10% of total sales and approximately 28%-30% of the totalpurchase of Equipment would be from the Kingboard Group. The actual amount ofpurchase will be subject to prevailing market conditions and business environment.

Reasons for and benefits of entering into the New Equipment PurchaseFramework Agreement

The EEIC Group has been continuously expanding its PCB business and anticipatesthat more Equipment for the manufacture of PCBs will be required to further expandthe business. Taking into account a range of factors including the reduction intransportation costs, the quality and the price of the Equipment manufactured by theKingboard Group for the production of PCBs, the EEIC Group considers thatpurchase of Equipment under the New Equipment Purchase Framework Agreement isnecessary to facilitate its expansion plan and will improve the competitiveness, thequality and price of the PCBs manufactured by the EEIC Group.

The Directors (other than the INEDs whose opinion will be provided after reviewingthe opinion from the independent financial adviser) are of the view that the NewEquipment Purchase Framework Agreement are entered into on normal commercialterms, in the ordinary and usual course of business of the EEIC Group and that theterms of the New Equipment Purchase Framework Agreement are fair and reasonableand in the interests of the Shareholders as a whole.

— 13 —

14A.56(4)

14.58(5)

14.58(8)

14A.56(1)

D. NEW MASTER SALES AND PURCHASES AGREEMENT

On 12 November 2013, the Company entered into a sales and purchases agreementwith Kingboard (the “New Master Sales and Purchases Agreement”), details ofwhich are set out below:

The New Master Sales and Purchases Agreement



(2) Kingboard

Nature of transaction: Pursuant to New Master Sales and PurchasesAgreement, the Kingboard Group (including, for thepurpose of this agreement, the associated companiesof Kingboard as defined in the Singapore ListingManual) will sell certain goods and/or servicesincluding but not limited to copper foil, kraft paper,copper balls, laminates, glass fibre and prepreg etc. tothe EEIC Group (including, for the purpose of thisagreement, the associated companies of the Companyas defined in the Singapore Listing Manual) and theEEIC Group will sell certain goods and/or servicesincluding but not limited to drill maintenanceservices and green laminates etc. to the KingboardGroup from time to time in accordance with the termsof such agreement. The New Master Sales andPurchases Agreement comprises the general terms andconditions upon which the Kingboard Group maypurchase the goods and/or services from the EEICGroup and vice versa. The relevant party(ies) mayfrom time to time enter into purchase agreements orsubmit purchase orders setting out the detailed termsfor the purchase of the goods and/or services providedthat such detailed terms shall not be inconsistent withthe terms of the New Master Sales and PurchasesAgreement. The Kingboard Group will not beobligated to sell or purchase any prescribed quantityof goods and/or services or at any specific prices to orfrom the EEIC Group and the EEIC Group will not beobligated to sell or purchase any prescribed quantityof goods and/or services or at any specific prices to orfrom the Kingboard Group during the term of the NewMaster Sales and Purchases Agreement.

— 14 —

14.58(3)14.58(4)14A.56(2)

14.60(1)


Consideration: The prices at which the goods and/or services are tobe supplied by the relevant party to the other partyshall be the market price, or if the same is notavailable, a price which is not less favourable to theEEIC Group or the Kingboard Group (as the case maybe) than the price at which the relevant party suppliessimilar goods and/or services to independent thirdparties having regard to the quality, quantity andother conditions of the purchase. For the purpose ofthe market price, the Company will consider the priceoffered by independent third party suppliers andcustomers (as the case may be) of similar goodsand/or services (if any). In particular, the relevantpurchasing and sales (as the case may be) departmentof the Company will obtain quotations from suchindependent third party suppliers and customers (asthe case may be) (if any) and monitor the generalmovement of market price from time to time.

Terms of payment: Unless otherwise agreed between the parties to theagreement, the payment shall be made within 90 daysafter month-end settlement from the date when thegoods and/or services are received by the relevantparty. Payment term for different type of productcategories may be subject to shorter payment terms asmutually agreed between the parties, but shall not bemore than 120 days.



relation to the purchase of certain goods and/or services by the EEIC Group from

Kingboard Group under the Existing Master Sales and Purchases Agreement and the

Proposed Annual Caps under the New Master Sales and Purchases Agreement

(namely category 3a as stated on page 151 of the 2011 Listing Document).

— 15 —




2014


2015


2016

Annual capActual


amount Annual cap

Actualamount

(up to30 September

2013

Estimatedamount

(up to31 December

2013)Proposed

annual capProposed

annual capProposed

annual cap


198,327 159,768 244,412 133,791 300,536 91,374 121,832 159,688 184,954 215,151


relation to the sale of certain goods and/or services by the EEIC Group to Kingboard

Group under the Existing Master Sales and Purchases Agreement and the Proposed

Annual Caps under the New Master Sales and Purchases Agreement (namely category

3b as stated on page 151 of the 2011 Listing Document).




2014


2015


2016

Annual capActual


amount Annual cap

Actualamount

(up to30 September

2013)

Estimatedamount

(up to31 December

2013)Proposed

annual capProposed

annual capProposed

annual cap


30,803 22,555 36,963 10,834 44,356 5,119 6,825 16,316 18,760 21,660

The Proposed Annual Caps under the New Master Sales and Purchases Agreement

have been determined with reference to the internal projection of the sales and

purchases to be incurred having regard to (i) the average annual growth rate of 3.8%

of the global PCB market, according to Prismark Partners LLC; (ii) the anticipated

growth in demand of goods and/or services; (iii) the prevailing market prices of

goods and/or services; (iv) inflation; and (v) the business development plan of the

EEIC Group, including the expansion of the market share of certain PCB-related

industries such as the high density interconnect PCB market and the

automotive-related PCB market. Barring unforeseeable circumstances, the EEIC

Group expects to increase their production capacity of PCB products by

approximately 15%, 16% and 10% in 2014, 2015 and 2016, respectively. It is

assumed that total purchase of goods/services would amount to approximately 61%

of total sales and approximately 45%-46% of the total purchase of goods/services

would be from the Kingboard Group. It is assumed that total sales of goods/services

would amount to approximately 4% of total sales and approximately 3% of the total

sales would be attributable to the Kingboard Group. The actual amount of sales and

purchases will be subject to prevailing market conditions and business environment.

— 16 —

14A.56(4)

14.58(5)

Reasons for and benefits of entering into the New Master Sales and PurchasesAgreements

The EEIC Group is engaged in the manufacture of PCBs, which requires materialsincluding but not limited to copper foil, kraft paper, copper balls, laminates, glassfibre and prepreg (the “EEIC Group Required Materials”) as key components of itsproducts. The Kingboard Group is engaged in, among others, the manufacture oflaminates and PCBs, which requires materials and services, including but not limitedto green laminates and drill maintenance services, as a component for its production.The provision of the EEIC Group Required Materials by the Kingboard Group to theEEIC Group secures a steady supply of the EEIC Group Required Materials to theEEIC Group which facilitates its production of PCBs. The EEIC Group considers thatthe Kingboard Group is a reliable business co-operation partner and suchco-operation is beneficial to the business of the EEIC Group.

The Directors (other than the INEDs whose opinion will be provided after reviewingthe opinion from the independent financial adviser) are of the view that the NewMaster Sales and Purchases Agreement are entered into on normal commercial terms,in the ordinary and usual course of business of the EEIC Group and that the terms ofthe New Master Sales and Purchases Agreement are fair and reasonable and in theinterests of the Shareholders as a whole.

E. LISTING RULES IMPLICATIONS

As at the date of this announcement, Kingboard, through its wholly-ownedsubsidiaries, owns approximately 69.41% of the issued share capital of the Companyand is therefore a connected person of the Company. Accordingly, the transactionscontemplated under the New Rental Sharing and Cost Reimbursement Agreements,New Equipment Purchase Framework Agreement and New Master Sales andPurchases Agreement constitute continuing connected transactions of the Companyunder Chapter 14A of the HK Listing Rules.

1. The New Rental Sharing and Cost Reimbursement Agreements

As each of the applicable percentage ratios (under Chapter 14A of the HK ListingRules) of the aggregate fees to be paid and received by the EEIC Group on an annualbasis under the New Rental Sharing and Cost Reimbursement Agreements for each ofthe three years ending 31 December 2014, 2015 and 2016 equals to or exceeds 0.1%but is less than 5%, the transactions contemplated under the New Rental Sharing andCost Reimbursement Agreements are exempt from the independent shareholders’approval requirement but are subject to the annual review, reporting andannouncement requirements under Rule 14A.34 of the HK Listing Rules.

— 17 —

14.58(8)14A.56(2)

14A.56(1)

14A.56(2)

14A.56(3)

2. The New Equipment Purchase Framework Agreement

As one or more of the applicable percentage ratios (under Chapter 14A of the HKListing Rules) of the aggregate amount to be paid by the EEIC Group on an annualbasis under the New Equipment Purchase Framework Agreement for each of the threeyears ending 31 December 2014, 2015 and 2016 is/are equal to or greater than 5%,the transactions contemplated under the New Equipment Purchase FrameworkAgreement are subject to the annual review, reporting, announcement andindependent shareholders’ approval requirements under Rule 14A.35 of the HKListing Rules.

3. The New Master Sales and Purchases Agreement

As one or more of the percentage ratios (under Chapter 14A of the HK Listing Rules)of the aggregate amount to be paid or received by the EEIC Group (as the case maybe) on an annual basis under the New Master Sales and Purchases Agreement for eachof the three years ending 31 December 2014, 2015 and 2016 is/are equal to or greaterthan 5%, the transactions contemplated under the New Master Sales and PurchasesAgreement are subject to the annual review, reporting, announcement andindependent shareholders’ approval requirements under Rule 14A.35 of the HKListing Rules.

F. APPROVAL BY INDEPENDENT SHAREHOLDERS

The Company will seek independent Shareholders’ approval at an extraordinarygeneral meeting (“EGM”) for (i) the New Equipment Purchase FrameworkAgreement and the transactions and the Proposed Annual Caps contemplatedthereunder; and (ii) the New Master Sales and Purchases Agreement and thetransactions and the Proposed Annual Caps contemplated thereunder (together, the“Relevant Transactions”). Kingboard and its associates will abstain from voting atthe EGM. Karl Thomson Financial Advisory Limited has been appointed as theindependent financial adviser to advise the independent board committee (comprisingthe INEDs) and the independent Shareholders in relation to the RelevantTransactions. Mr Chadwick Mok Cham Hung, Mr Cheung Kwok Wing, Mr ChanWing Kwan and Mr Chang Wing Yiu, who are directors of the Company and alsodirectors of Kingboard, and Mr Chan Wai Leung who is a director of the Companyand also holds directorship in certain member(s) of the Kingboard Group, arerequired to abstain from voting for the transactions contemplated under the NewRental Sharing and Cost Reimbursement Agreements, New Equipment PurchaseFramework Agreement and New Master Sales and Purchases Agreement and theProposed Annual Caps contemplated thereunder at the board meeting of theCompany.

— 18 —

14A.56(3)

14A.56(3)

14A.56(9)

A circular containing, inter alia, (i) further details of the New Equipment Purchase

Framework Agreement, the New Master Sales and Purchases Agreement and the

transactions and the Proposed Annual Caps contemplated thereunder, respectively;

(ii) the opinion from the independent financial adviser; (iii) the recommendation

from the independent board committee (comprising the INEDs); and (iv) the notice

of the EGM and other information as required under the HK Listing Rules is expected

to be despatched by the Company to the Shareholders within 15 business days after

the publication of this announcement.

G. GENERAL

The EEIC Group

The Company is an investment holding company which through its subsidiaries are

primarily engaged in the design, development, manufacture and distribution of

high-density, double-sided and multi-layered PCBs.

EE Multilayer is principally engaged in manufacturing and distribution of PCBs.

Yisheng Branch is engaged in the provision of consultation and liaison services

within the business scope of Yisheng which is principally engaged in international

trade and wholesale and distribution of copper products, electronic components and

parts.

The Kingboard Group

Kingboard is an investment holding company. The Kingboard Group is principally

engaged in the manufacture and sale of laminates, copper foil, glass fabric, glass

yarn, bleached kraft paper, packing cartons, PCBs, chemicals, liquid crystal displays

and magnetic products, and property development and investment.

EECSL provides centralized corporate service functions including legal & company

secretarial, office administration and financial services.

Zhande is principally engaged in property investment.

Joyful is principally engaged in providing management services.

— 19 —

14A.56(10)

14.58(2)

H. DEFINITIONS

In this announcement, unless otherwise indicated or the context otherwise requires,

the following expressions shall have the following meanings:

“2011 ListingDocument”

the listing document of the Company dated 30 June2011

“Board” the board of Directors

“Company” Elec & Eltek International Company Limited (依利安達集團有限公司*), a company incorporated in Singaporewith limited liability, the shares of which are listed onthe main board of the Singapore Exchange SecuritiesTrading Limited and the main board of SEHK

“connected person” has the meaning ascribed to it under the HK ListingRules

“Director(s)” the director(s) of the Company

“EECSL” Elec & Eltek Corporate Services Limited, a companyincorporated in Hong Kong with limited liability and awholly-owned subsidiary of EEIH

“EEDTL” Elec & Eltek Display Technology Limited, a companyincorporated in the British Virgin Islands with limitedliability and a wholly-owned subsidiary of EEIH

“EEIC Group” the Company and its subsidiaries

“EEIH” Elec & Eltek International Holdings Limited (依利安達國際集團有限公司*), a company incorporated inBermuda with limited liability and a wholly-ownedsubsidiary of Kingboard

“EEIH Group” EEIH and its subsidiaries

“EEMCO” Elec & Eltek Company (Macao Commercial Offshore)Limited, a company incorporated in Macao with limitedliability and a wholly-owned subsidiary of the Company

”EEMCOMRO” a representative office of EEMCO which is registeredand situated at No. 3 (2nd floor), Jalan Todak 2, 13700Bandar Sunway, Seberang Jaya, Pulau Pinang, Malaysia

— 20 —

”EE Computers” Elec & Eltek Computers Limited, a companyincorporated in Hong Kong with limited liability and awholly-owned subsidiary of EEIH

“EE Multilayer” Elec & Eltek Multilayer PCB Limited, a companyincorporated in Hong Kong with limited liability and awholly-owned subsidiary of the Company

“Equipment” all kinds of machineries and equipment for use in thePCB industry

“Existing Annual Caps” the annual caps for the Existing Continuing ConnectedTransaction Agreements for the three years ending 31December 2013

“Existing ContinuingConnectedTransactionAgreements”

the Existing Rental Sharing and Cost ReimbursementAgreements, Existing Equipment Purchase FrameworkAgreement and Existing Master Sales and PurchasesAgreement

“Existing EquipmentPurchase FrameworkAgreement”

an agreement dated 27 June 2011 for the purchase ofcertain Equipment, details of which are described in the2011 Listing Document

“Existing Master Salesand PurchasesAgreement”

an agreement dated 27 June 2011 for the sale andpurchase of certain goods and/or services, details ofwhich are described in the 2011 Listing Document

“Existing RentalSharing and CostReimbursementAgreements”

various agreements dated 27 June 2011 relating tosharing of office space and corporate and administrativeservices, details of which are described in the 2011Listing Document

“HK Listing Rules” the Rules Governing the Listing of Securities on SEHK

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Hong Kong” the Hong Kong Special Administrative Region of PRC

“INEDs” the independent non-executive Directors

“Joyful” Joyful Source Group Limited, a company incorporatedin the British Virgin Islands with limited liability and awholly-owned subsidiary of Kingboard

— 21 —

“Kingboard” Kingboard Chemical Holdings Limited (stock code:148), a company incorporated in the Cayman Islandswith limited liability, the shares of which are listed onthe main board of SEHK

“Kingboard Group” Kingboard and its subsidiaries (other than the EEICGroup)

“PCB(s)” acronym for printed circuit board, a flat panelcomposite with alternating layers of printed conductorsand electrical insulation, typically interconnected byconductive holes; PCBs provide platforms to connectsemiconductors and other electronic, optical ormechanical devices to form a circuit or functionalsystem

“PIC” PIC Corporate Services Limited, a companyincorporated in Hong Kong with limited liability and awholly-owned subsidiary of the Company

“PRC” the People’s Republic of China (which, for the purposeof this announcement, excludes Hong Kong, the MacauSpecial Administrative Region of the PRC and Taiwan)

“Proposed AnnualCaps”

the proposed annual caps for the three years ending 31December 2016 as more particularly described in thisannouncement

“RMB” Renminbi, the lawful currency of PRC

“Shareholder(s)” holder(s) of the share(s) in the Company

“Singapore ListingManual”

the listing manual of Singapore Exchange SecuritiesTrading Limited, as amended, modified orsupplemented from time to time

“SEHK” The Stock Exchange of Hong Kong Limited

“USD” United States dollars, the lawful currency of the UnitedStates of America

“Yisheng” Yi Sheng Trading (Shanghai) Co., Ltd.* (弈升貿易(上海)有限公司), a company incorporated in PRC withlimited liability and a wholly-owned subsidiary of theCompany

— 22 —

“Yisheng Branch” Yi Sheng Trading (Shanghai) Co., Ltd. BranchCompany* (弈升貿易(上海)有限公司分公司), a branchcompany of Yisheng

“Zhande” Zhande Property Operation and Management(Shanghai) Limited* (展德物業經營管理(上海)有限公司), a company incorporated in PRC with limitedliability and a wholly-owned subsidiary of Kingboard

“%” per cent

By Order of the BoardElec & Eltek International Company Limited

Claudia Heng Nguan LengCompany Secretary

Hong Kong, 12 November 2013

As at the date hereof, the Board comprises the following Directors:—

Executive Directors:Chadwick Mok Cham Hung (Vice Chairman)Chan Wai Leung

Non-executive Directors:Cheung Kwok Wing (Chairman)Chan Wing KwanChang Wing Yiu

Independent non-executive Directors:Larry Lai Chong TuckRaymond Leung Hai MingStanley Chung Wai Cheong

For the purpose of this announcement, amounts denominated in RMB have been converted (for

informational purposes only) in USD at the exchange rate of RMB1 to USD0.164 and amounts

denominated in HK$ have been converted (for informational purposes only) in USD at the exchange

rate of HK$ to USD0.129. Such conversion shall not be construed as a representation that amounts

in RMB or HK$, as the case may be, were or may have been converted into USD at such exchange rates

or any other exchange rates.

* For identification purpose only

— 23 —

LR2.14

elec & eltek international company limited 依利安達集團有限公司 · 2013. 11. 12. ·...

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