09:30 SINO GOLF HOLD<00361> - 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. SINO GOLF HOLDINGS LIMITED (a company incorporated in Bermuda with limited liability) (Stock Code: 361) NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS The Group is principally engaged in the manufacture and trade of golf equipment and accessories and golf bags. The Group has been engaging since 1990, and will continue to engage in the transactions involving the sales of certain golf products to Nikko Bussan (Japan) which constitute continuing connected transactions of the Group under Chapter 14A of the Listing Rules. Nikko Bussan (Japan) is a connected person (as defined in the Listing Rules) of the Company by virtue of the fact that it is a company owned as to 58.75% by Mr. Takanori Matsurra, a Director. Transactions between Nikko Bussan (Japan) and the Group therefore constitute connected transaction for the Group under the Listing Rules. The Continuing Connected Transactions will be subject to reporting, announcement and independent Shareholders' approval requirements under Rule 14A.35 of the Listing Rules. An Independent Board Committee, comprising the three independent non-executive Directors, has been established to advise the independent Shareholders in relation to the terms of the Supply Agreement and the Continuing Connected Transactions contemplated. An independent financial adviser has been appointed to advise the Independent Board Committee and independent Shareholders. The Circular will also contain the letter of advice from the independent financial adviser to the Independent Board Committee and independent Shareholders in relation to the terms of the Supply Agreement and the Continuing Connected Transactions contemplated, as well as the letter of advice from the Independent Board Committee to the Shareholders in relation to the same. Reference is made to (i) the announcement of the Company dated 11 July 2002 and (ii) the circular of the Company dated 16 July 2002. I. Background The Group is principally engaged in the manufacture and trade of golf equipment and accessories and golf bags. The Group has been engaging since 1990, and will continue to engage in the transactions involving the sales of certain golf products to Nikko Bussan (Japan) which constitute continuing connected transactions of the Group under Chapter 14A of the Listing Rules. Details of the Continuing Connected Transactions The Supply Agreement Date: 18 April 2005 Parties: (i) Sino Golf Macau (ii) Nikko Bussan (Japan) supply golf products to the Nikko Bussan (Japan) as required. Term: The Supply Agreement has a fixed term of not exceeding 3 years and will be effective as from the date of approval by the independent Shareholders at the SGM and will continue until 31 December 2007 (both dates inclusive). Price: The prices of purchases will be arrived at through arm's length negotiations taking into account (i) costs; (ii) selling prices of sales of similar products to other customers who are independent and not connected persons of the Company; and (iii) selling prices of similar products previously sold to Nikko Bussan (Japan) on a case-by-case basis to reflect the fair market value. The transactions contemplated under the Supply Agreements are referred to as the "Continuing Connected Transactions". Transactions in respect of the purchase of golf products by Nikko Bussan (Japan) from the Group were disclosed in the announcement and the circular of the Company dated 11 July 2002 and 16 July 2002 respectively, and were approved by the then independent Shareholders at