Annual Report 2011 - Goodbaby International Holdings Limited

During the year under review, the total
amounts paid by GCCL to GCPC for the
Products under the GCCL Supply
Agreement was RMB309,955,962 and the
annual cap amount granted by the Stock
Exchange was RMB310,643,000. Details
of such transaction were disclosed in the
Company’s Prospectus under the section
headed “Connected Transactions” and
the circular of the Company dated 22
November 2011.
GCCL is a wholly owned subsidiary of G-
Baby Holdings Limited, which in turn is
held as to approximately 36.1% by CRF
Enterprise, a substantial shareholder of
the Company, and as to approximately
63.9% by companies ultimately
controlled by Mr. Song Zhenghuan, the
chairman of the Company, and his
spouse, including PUD, another
substantial shareholder of the Company.
Accordingly, GCCL is an associate of Mr.
Song Zhenghuan and CRF Enterprise
under the Listing Rules and thus is
regarded as a connected person of the
Company under the Listing Rules.
Pursuant to Rule 14A.38 of the Listing
Rules, the Board has engaged the
auditors of the Company to perform
certain agreed-upon procedures on the
aforesaid continuing connected
transactions. Based on the work
performed, the auditors of the Company
/ 59
have provided a letter to the Board
confirming that the aforesaid continuing
connected transactions:
(i) have been approved by the
Directors;
(ii) were entered into in accordance with
the pricing policies of the Company;
(iii) were entered into in accordance with
the terms of the relevant agreements
governing such transactions; and
(iv) did not exceed the annual cap
amounts.
A copy of the auditor’s letter has been
provided by the Company to the Stock
Exchange.
Pursuant to Rule 14A. 37 of the Listing
Rules, the independent non-executive
Directors have reviewed the above
continuing connected transactions and
confirmed that the transactions have
been entered into:
(i) in the ordinary and usual course of
the business of the Group;
(ii) either (a) on normal commercial
terms or; (b) where there is no
available comparable terms, on
terms no less favorable to the Group
than terms available to or from
independent third parties; and
(iii) in accordance with the relevant
agreements governing them on
terms that are fair and reasonable
and in the interests of the
shareholders of the Company as a
whole.