Basic HTML Version
Notes To The Consolidated Financial Statements
(Expressed in Renminbi)
Annual Report 2011 /
1
45 Related parties
(continued)
(a) Transactions with CTC Group
(continued)
(5)
The Group has entered into Suppl ies Procurement Services Framework agreement for
procurement of telecommunication and non – telecommunication supplies, agency services
of supplies procurement, sales of telecommunication supplies and management of biddings,
verification of technical specifications, warehousing transportation and installation service.
Pursuant to the agreement, the Group charges CTC Group for these services in accordance
with the following terms:
–
max imum 1% of the cont ract va l ue for procurement serv i ces on impor ted
telecommunication supplies;
–
max imum 3% of the cont ract va l ue for procurement serv i ces on domest i c
telecommunication and non-telecommunication supplies and materials;
–
government prescribed price;
–
where there is no government prescribed prices but where there is a government
guided price, the government guided price will apply;
–
where there is neither a government prescribed price nor a government guided price,
the market price will apply; and
–
where none of the above is available, the pre is to be agreed between the relevant
parties, which shall be based on the cost incurred in providing the services plus a
reasonable profit margin.
(6)
On 10 April 2011, the Company, through Zhejiang Communications Services Company Limited
(“Zhejiang CCS”), a direct wholly-owned subsidiary of the Company, entered into the Equity
Transfer Agreement with the Difo Telecommunications Group Limited (“Difo Telecom”),
an indirect wholly-owned subsidiary of CTC pursuant to which Zhejiang CCS agrees to sell,
and the Difo Telecom agrees to acquire 100% equity interest in Zhejiang Nantian Post and
Communications Technology Company Limited (“Zhejiang Nantian”) for a total consideration
of RMB194 million payable in cash. After the completion of the Disposal, Zhejiang Nantian will
cease to be a subsidiary of the Company. Difo Telecom is an indirect wholly-owned subsidiary
of CTC which is the controlling shareholder of the Company, so Difo Telecom was a connected
person of the Company under the Listing Rules. Accordingly, the disposal constituted a
connected transaction of the Company. The Company has complied with the relevant Listing
Rules requirements in respect of such connected transaction and made corresponding
announcement on 11 April 2011.
On 5 September 2011, Tianxun Ruida Communications Technology Company Limited (“Tianxun
Ruida”), an indirectly wholly-owned subsidiary of the Company, entered into the Asset and
Business Acquisition Agreement with E-Surfing Electronic Commerce Company Limited
(“E-Surfing Electronic”), an indirectly wholly-owned subsidiary of CTC. Pursuant to the Asset
and Business Acquisition Agreement, Tianxun Ruida will sell, and E-Surfing Electronic will
acquire the assets and business in relation to the payment business of Tianxun Ruida, which
include all the assets, liabilities, rights and obligations associated with the payment business,
for a total consideration of RMB15 million payable in cash, subject to adjustment. E-Surfing
Electronic is an indirect wholly-owned subsidiary of CTC which is the controlling shareholder
of the Company, so E-Surfing Electronic was a connected person of the Company under the
Listing Rules. Accordingly, the disposal constituted a connected transaction of the Company.
The Company has complied with the relevant Listing Rules requirements in respect of such
connected transaction and made corresponding announcement on 5 September 2011.