OREANDA-NEWS. February 14, 2011. The Original Service and Supply Agreement entered into between the Company and the Parent Company on 22 January 2008 has expired on 31 December 2010. In order to ensure the continuous supply of services, products and raw materials, lease of factory premises and welfare services, the Company has entered into the New Service and Supply Agreement with the Parent Company, reported the press-centre of Chongqing Iron & Steel Company.

As at the date of this announcement, Parent Company is interested in approximately 48.23% of the issued share capital of the Company, the provision and receipt of services, products and raw materials, lease of factory premises and welfare services by Parent Group under the New Service and Supply Agreement constitute continuing connected transactions for the Company under the Listing Rules. As each of the applicable percentage ratios for the aggregate amount of the transactions contemplated under New Service and Supply Agreement, on an annual basis, is more than 5% and the respective Annual Caps exceeds HKD10,000,000, the transactions contemplated under the New Service and Supply Agreement constitute non-exempt continuing connected transactions under Rule 14A.35 of the Listing Rules and are subject to the requirements of reporting and announcement, Independent Shareholders’ approval and annual review under Rules 14A.35(3), 14A.35(4) and 14A.35(5) of the Listing Rules.

A circular including, among other things, details of the New Service and Supply Agreement (including the Annual Caps) and the transactions contemplated thereunder, the recommendation letter from the Independent Board Committee, the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders and, a notice convening the EGM to approve the New Service and Supply Agreement (including the Annual Caps) and the transactions contemplated thereunder, is expected to be dispatched to the Shareholders on or before 22 February 2011 pursuant to Chapter 14A of the Listing Rules.

BACKGROUND
Reference is made to the announcement of the Company dated 22 January 2008 in respect of the continuing connected transactions in relation to the Original Service and Supply Agreement entered into between the Company and Parent Company. In order to achieve stable production operation in Changshou New District and smooth relocation of the steel production of the Company from Dadukou District, Chongqing City to Changshou New District, and in order to ensure the continuous supply of services, products and raw materials, lease of factory premises and welfare services, the Board hereby announces that on 31 January 2011, the Company and Parent Company entered into the New Service and Supply Agreement for a further term of three years commencing from 1 January 2011 and expiring on 31 December 2013.