10:03 NWS HOLDINGS<00659> - 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. NWS Holdings Limited (incorporated in Bermuda with limited liability) (stock code: 0659) CONTINUING CONNECTED TRANSACTIONS In the ordinary course of its business, the Group regularly enters into certain continuing connected transactions with the NWD Group. In April 2003, the Company obtained the Conditional Waiver from strict compliance with the connected transactions requirements under the then Listing Rules and an annual cap as a percentage of the annual turnover of the Group was assigned to each category of continuing connected transactions for each of the three financial years ending 30 June 2005. It is expected that the transaction values of various categories of continuing connected transactions under the Conditional Waiver would exceed their respective annual caps (as a percentage of the expected turnover of the Group for the year ending 30 June 2005). Pursuant to the terms of the Conditional Waiver, the Company will seek to obtain Independent Shareholders' approval of new annual caps for certain categories of continuing connected transactions for the year ending 30 June 2005. The continuing connected transactions will continue following the expiry of the Conditional Waiver on 30 June 2005. The Directors announce that on 30 May 2005, the Company and NWD entered into the Master Services Agreement whereby (a) NWD agrees to, and agrees to procure that members of the NWD Group shall (to the extent practicable), engage members of the Group to provide the Operational Services and to sell food products to the NWD Group and (b) the Company agrees to, and agrees to procure that members of the Group shall (to the extent practicable), engage members of the NWD Group to rent properties, vehicles and vessels to the Group. As NWD holds approximately 54% of the total issued share capital of the Company, it is a substantial shareholder of the Company and hence, a connected person of the Company. Accordingly, the transactions contemplated under the Master Services Agreement will constitute continuing connected transactions of the Company under Rule 14A.14 of the Listing Rules. As one or more of the percentage ratios will exceed 2.5% on an annual basis, such transactions will be subject to the reporting, announcement and independent shareholders' approval requirements under Rules 14A.45 to 14A.48 of the Listing Rules. The Independent Board Committee has been formed to advise the Independent Shareholders in respect of the Continuing Connected Transactions. Commerzbank has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Continuing Connected Transactions. A circular containing, among other things, a notice convening the SGM, details of the Continuing Connected Transactions, a letter from the Independent Board Committee and a letter from Commerzbank will be despatched to the Shareholders as soon as practicable. 1. BACKGROUND In April 2003, the Company obtained the Conditional Waiver from strict compliance with the connected transactions requirements under the then Listing Rules and an annual cap as a percentage of the annual turnover of the Group was assigned to each category of continuing connected transactions for each of the three financial years ending 30 June 2005. Such continuing connected transactions will continue following the expiry of the Conditional Waiver on 30 June 2005. Pursuant to the Engagement Undertaking, NWD has, subject to certain qualifications, undertaken to engage the Group for the provision of the Operational Services for a period of 15 years from 29 January 2003. On 30 May 2005, the Company and NWD entered into the Master Services Agreement whereby (a) NWD agrees to, and agrees to procure that members of the NWD Group shall (to the extent practicable), engage members of the Group to provide the Operational Services and to sell food products to the NWD Group and (b) the Company agrees to, and agrees to procure that members of the Group shall (to the extent practicable), engage members of the NWD Group to rent properties, vehicles and vessels to the Group, during the term of the Master Services Agreement.