09:09 HANG TEN GROUP<00448> - Announcement (3) disclosure and shareholders' approval requirements applicable to these transactions under the Listing Rules then in force. This waiver expired on 31 March 2005. The transactions between Hang Ten Enterprises on the one part and Chua and company and/or their associates on the other part have continued after the expiry of the waiver. The Directors confirm that these transactions carried out since 1 April 2005 up to date are on normal commercial terms and the value of these transactions has not exceeded the 0.1% threshold provided under Rule 14A.33 of the Listing Rules and, accordingly, they are exempt from the reporting, announcement and independent shareholders' approval requirements of Chapter 14A of the Listing Rules. Since such transactions involve the provision of goods which is carried out on a continuing or recurring basis in the ordinary and usual course of business of the Group, they constitute continuing connected transactions of the Company. To comply with the Listing Rules as currently in effect, Hang Ten Enterprises and the associates of Chua and company entered into the First Supply Agreement in respect of these transactions for a fixed term of 3 years commencing from 1 April 2005. As each of the relevant percentage ratios (other than the profits ratio and equity capital ratio which are inapplicable) set out in the Listing Rules in respect of the value of the transactions under the First Supply Agreement is, on an annual basis, less than 2.5%, the First Supply Agreement constitutes a continuing connected transaction of the Company under Rule 14A.34 of the Listing Rules and is subject to the reporting and announcement requirements set out in Rules 14A.45 to 14A.47 of the Listing Rules, but is exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules. Particulars of the First Supply Agreement are described below. Particulars Date: 23 May 2005 Effective period: 3 years commencing from 1 April 2005 Seller: Hang Ten Enterprises, which is principally engaged in the wholesaling and retailing of products bearing the 'Hang Ten' brand name in Taiwan as well as overseas wholesaling Buyers: Outfit Specialists Inc. and Avon Dale Garments Inc., which are principally engaged in the distribution and sales of garments, apparel and accessories Nature of transaction: Hang Ten Enterprises will sell garments, apparel and/or accessories to the buyers on a non-exclusive basis in accordance with any written quotation of Hang Ten Enterprises which is accepted by the buyers, or any written order of the buyers which is accepted by Hang Ten Enterprises. Payment terms: The price of the goods will be Hang Ten Enterprises' quoted price which will be determined based on the actual cost of the goods and a reasonable profit margin determined by Hang Ten Enterprises taking into account the following: (a) the quoted price shall not be less than the price charged by Hang Ten Enterprises to an Independent Third Party when dealing on an arm's length basis having regard to any other special circumstances such as arm's length negotiated volume discounts; and (b) if no such comparable reference prices are available, the quoted price shall be determined by agreement between the parties based on (i) normal commercial terms that are considered to be fair and reasonable by the parties; and (ii) terms no less favourable to Hang Ten Enterprises than terms available from Independent Third Parties. Annual cap: US$1,900,000 (equivalent to approximately HK$14,820,000) Basis of annual cap: The aggregate value of the transactions between Hang Ten Enterprises on the one part and associates of Chua and company on the other part amounted to approximately US$1,389,000 (equivalent to approximately HK$10,834,200), US$1,363,000 (equivalent to approximately HK$10,631,400) and US$1,642,000 (equivalent to approximately HK$12,807,600) for the three years ended 31 March 2005 respectively. In determining the annual cap, the Directors have taken into consideration the value of such transactions over the past three years ended 31 March 2005 and an expected increase in sales to the associates of Chua and company in the ensuing years estimated based on an average growth rate of approximately 18% in the relevant sales volume for the past three years ended 31 March 2005, and accordingly consider the annual cap reasonable. Reason for the transaction: One of the principal businesses of the