09:24 AEON STORES<00984> - Announcement (1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this 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. AEON STORES (HONG KONG) CO., LIMITED (Incorporated in Hong Kong with limited liability) (Stock Code: 984) CONTINUING CONNECTED TRANSACTION At the annual general meeting of the Company held on 20 June 2002, the independent shareholders of the Company approved a resolution authorising the Directors to remunerate Aeon Credit in respect of the Commission Payment Transactions which constitute connected transactions under the old Listing Rules (which ceased to be effective after 30 March 2004). The Stock Exchange granted a conditional waiver to the Company on 28 June 2002 from strict compliance with certain requirements under the old Listing Rules in respect of the Commission Payment Transactions for a period of three financial years. The Commission Payment Transactions constitute continuing connected transactions for the Company under Rule 14A.14 of the current Listing Rules and are subject to the reporting and announcement requirements under Rules 14A.45-47. In order to comply with Rule 14A.35(1) of the current Listing Rules, the Company entered into the Agreement on 15 April 2005 with Aeon Credit in respect of the Commission Payment Transactions for a fixed term of three years effective from 15 April 2005 to 14 April 2008. BACKGROUND At the annual general meeting of the Company held on 20 June 2002, the independent shareholders of the Company approved a resolution authorising the Directors to remunerate Aeon Credit in respect of the Commission Payment Transactions which constitute connected transactions under the old Listing Rules (which ceased to be effective after 30 March 2004) and the Stock Exchange granted a conditional waiver to the Company on 28 June 2002 from strict compliance with certain requirements under the old Listing Rules in respect of the Commission Payment Transactions for a period of three financial years. Continuing Connected Transaction As at the date of this announcement, AEON Co. Ltd. controls approximately 71.64% of the voting rights in the Company and approximately 66.22% of the voting rights in Aeon Credit. Aeon Credit is therefore a connected person of the Company under the Listing Rules and the Commission Payment Transactions therefore constitute continuing connected transactions for the Company under the Listing Rules. It is expected that the highest of the relevant percentage ratios as defined under Rule 14.07 of the Listing Rules (other than the profits ratio) in respect of the Commission Payment Transactions will, on an annual basis, be more than 0.1% but less than 2.5%. The Commission Payment Transactions are therefore subject to the reporting and announcement requirements under Rules 14A.45-47 of the Listing Rules but do not require the approval of the Company's independent shareholders. The Agreement and the Commission Payment Transactions Background In order to comply with Rule 14A.35(1) of the Listing Rules, the Company entered into the Agreement on 15 April 2005 with Aeon Credit in respect of the Commission Payment Transactions for a fixed term of three years effective from 15 April 2005 to 14 April 2008. The Agreement may be terminated prior to the expiry of such fixed term by either party giving not less than ninety days' prior written notice of its intention to do so to the other party. Subject to compliance with the Listing Rules, the Agreement may be renewed on such terms and conditions as the parties to the Agreement may mutually agree.