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SCUD GROUP LIMITED

飛毛腿集團有限公司

(incorporated in the Cayman Islands with limited liability)
(Stock Code: 1399)
CONTINUING CONNECTED TRANSACTIONS

The Company announces that on 15 November 2007, Scud Electronics, a wholly-owned subsidiary of
the Company, entered into the New Lease Agreement as lessee with Scud Stock as lessor. The lease,
together with other leases under the Main Lease Agreement constitute continuing connected transactions
of the Company and are only subject to the reporting and announcement requirements under the
Listing Rules. New annual caps for the three years ending 31 December 2009 for all the Leases have
been set to include the New Lease Agreement.
INTRODUCTION

The Company has disclosed in the Prospectus that Scud Electronics, a wholly-owned subsidiary of the
Company, entered into the Main Lease with Scud Stock on 20 June 2004, pursuant to which Scud
Electronics agreed to lease from Scud Stock certain factory premises in the Land Lot No. 39 in Kuaian
Technology Zone, Mawei Economic and Technology Development Zone, Mawei District, Fuzhou, Fujian
Province, PRC for the Group’s production use for a term of three years commencing from 1 July 2004
and ending on 30 June 2007. The Main Lease Agreement was later extended to 30 June 2024. For more
details, please refer to the section headed “Connected Transactions” of the Prospectus.
Scud Stock is owned as to 67% by Mr. Fang, 25% by Mr. Lin, 5% by Mr. Lin’s wife and 3% by Mr. Guo.
Each of Mr. Fang (who is also a controlling Shareholder currently holding approximately 40.52% of the
issued share capital of the Company), Mr. Lin and Mr. Guo are executive Directors. Scud Stock is an
associate of Mr. Fang and thus a connected person of the Company under the Listing Rules. Therefore the
leases under the Main Lease Agreement constitute continuing connected transactions of the Company.
The annual rental currently payable under the Main Lease Agreement is approximately RMB2,700,000
(approximately HK$2,788,000) and the Company has set its Initial Annual Caps for each of the three
years ending 31 December 2008 to be RMB2,700,000 (approximately HK$2,788,000) each. As all relevant
percentage ratios in respect of the Main Lease Agreement are less than 2.5%, the leases thereunder are
only subject to the reporting and announcement requirements but exempt from the independent shareholders’
approval requirement under Chapter 14A of the Listing Rules. As disclosed in the Prospectus, pursuant to
Rule 14A.42(3) of the Listing Rules, the Company has applied for, and the Stock Exchange has agreed to

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grant a waiver from strict compliance with the announcement requirement under the Listing Rules provided
that the Initial Annual Caps are not exceeded and that the Company complies with the other requirements
of Chapter 14A of the Listing Rules.
NEW LEASE

On 15 November 2007, Scud Electronics entered into the New Lease Agreement for leasing another
Premises from Scud Stock for the Group’s administration use. The principal terms of the New Lease
Agreement are as follows:
Date: 15 November 2007
Parties: (i) Scud Electronics as lessee
(ii) Scud Stock as lessor
Premises: Floors 1 to 6 and 8 to 9 of the building located in No. 98, Jiang Bin Dong Da
Dao, Mawei District, Fuzhou, Fujian Province, PRC (福州馬尾區江濱東
大道98號)
Total floor area: 11,064 square metres
Term of lease: 3 years from 16 November 2007 to 15 November 2010
Rental: RMB114,864 (approximately HK$118,600) per month (that is RMB1,378,368
(approximately HK$1,423,000) per year)
Usage of the Premises: administration use for the Group
The rental payable under the New Lease Agreement is payable in cash on a monthly basis and was
determined after arm’s length negotiations between Scud Electronics and Scud Stock with reference to
the prevailing market rental for the comparable premises.

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NEW ANNUAL CAPS

As at the date of this announcement, the total rental payable under all the Leases remains within the
Initial Annual Caps. To include the New Lease Agreement, the new annual caps for the aggregate rental
payable by Scud Electronics to Scud Stock under all the Leases for each of the three years ending 31
December 2009 are set as follows:
The year ending Approximate
31 December RMB HK$ equivalent
2007 3,000,000 (being the sum of the rental payable under 3,098,000
the Main Lease Agreement for the year ending
31 December 2007 and the rental payable under
the New Lease Agreement for the period from
16 November to 31 December 2007)
2008 4,100,000 (being the sum of the rental payable under 4,234,000
all the Leases for the year ending 31 December 2008)
2009 4,100,000 (being the sum of the rental payable under 4,234,000
all the Leases for the year ending 31 December 2009)
The above new annual caps were determined based on the rental payable under all the Leases.
The Group requires the Premises for its administration use. The Directors (including the independent
non-executive Directors) are of the opinion that the New Lease Agreement and all the Leases were
entered into (i) in the ordinary and usual course of business of the Group and (ii) on normal commercial
terms after arm’s length negotiations between the parties. They consider that the terms of the New Lease
Agreement and all the Leases are fair and reasonable and in the interests of the Company and the
Shareholders as a whole.
LISTING RULES REQUIREMENTS

All the Leases constitute continuing connected transactions of the Company. Based on the new annual
caps for the three years ending 31 December 2009 as set out above, all the relevant percentage ratios in
respect of all the Leases are less than 2.5% and therefore all the Leases are only subject to the reporting
and announcement requirements but exempt from the independent shareholders’ approval requirement
under Chapter 14A of the Listing Rules.
INFORMATION ON THE GROUP AND SCUD STOCK

The Group is a market leader in the sales and marketing of self-manufactured rechargeable battery packs
for mobile phones in the PRC under its own “SCUD飛毛腿” brand. For more information, please visit
the Group’s website at http://www.scudcn.com.
Scud Stock’s business historically involved property management and development of fixed line handsets
and it has also recently commenced development in fixed line wireless handsets.

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DEFINITIONS

“associate” has the meaning ascribed to it in the Listing Rules
“Board” the board of Directors
“Company” SCUD Group Limited, a limited liability company incorporated in the
Cayman Islands, the shares of which are listed on the main board of the
Stock Exchange
“connected person” has the meaning ascribed to it in the Listing Rules
“controlling shareholder” has the meaning ascribed to it in the Listing Rules
“Director(s)” director(s) of the Company
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Initial Annual Caps” the annual caps of the rentals payable under the Main Lease Agreement
for each of the three years ending 31 December 2008 being
RMB2,700,000 (approximately HK$2,788,000) each
“Leases” all the leases under the Main Lease Agreement and the New Lease
Agreement
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Main Lease” the land lease agreement dated 20 June 2004 entered into between Scud
Electronics as lessee and Scud Stock as lessor, details of which are
disclosed in the section headed “Connected Transactions” of the
Prospectus
“Main Lease Agreement” the Main Lease as amended by the subsequent supplemental lease
agreements, details of which are disclosed in the section headed
“Connected Transactions” of the Prospectus
“Mr. Fang” Mr. Fang Jin, an executive Director and a controlling Shareholder
currently holding approximately 40.52% of the issued share capital of
the Company
“Mr. Guo” Mr. Guo Quan Zeng, an executive Director
“Mr. Lin” Mr. Lin Chao, an executive Director and a substantial Shareholder
currently holding approximately 18.15% of the issued share capital of
the Company

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“New Lease Agreement” the lease agreement dated 16 November 2007 entered into between Scud
Electronics as lessee and Scud Stock as lessor in respect of the lease of
the Premises
“percentage ratios” the percentage ratios calculated based on the requirements under Rule
14.07 of the Listing Rules
“PRC” the People’s Republic of China excluding Hong Kong, the Macau Special
Administrative Region of the PRC and Taiwan for the purposes of this
announcement
“Premises” Floors 1 to 6 and 8 to 9 of the building located in No. 98, Jiang Bin
Dong Da Dao, Mawei District, Fuzhou, Fujian Province, PRC (中國福
建省福州馬尾區江濱東大道98號) which are leased to Scud
Electronics under the New Lease Agreement
“Prospectus” the prospectus issued by the Company on 11 December 2006 in respect
of its initial public offering of the Shares for the listing of its Shares on
the main board of the Stock Exchange
“RMB” Renminbi, the lawful currency of the PRC
“Scud Electronics”飛毛腿（福建）電子有限公司(Scud Fujian Electronics Co., Ltd.),
a wholly foreign-owned enterprise established in the PRC on 30
September 2002 and an indirect wholly-owned subsidiary of the Company
“Scud Stock”福建飛毛腿股份有限公司 (Scud Stock (Fujian) Co., Ltd.), a joint
stock limited company established in the PRC on 30 September 2002,
currently held as to 67% by Mr. Fang, 25% by Mr. Lin, 5% by Mr.
Lin’s wife and 3% by Mr. Guo, and which is not part of the Group
“Share(s)” ordinary share(s) in the Company with a nominal value of HK$0.10
each
“Shareholder(s)” holder(s) of the Shares
“Stock Exchange” the Stock Exchange of Hong Kong Limited
“substantial shareholder” has the meaning ascribed to it in the Listing Rules
For the purpose of this announcement, unless otherwise indicated, the exchange rate of HK$1=RMB0.9683
has been used, where applicable, for the purpose of illustration only and does not constitute a representation
that any amount has been, could have been or may be exchanged at such rate or at any other rates.

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As at the date of this announcement, the Board comprises Messrs. Fang Jin, Lin Chao, Guo Quan Zeng
and Li Hui Qiu being the executive Directors, Mr. Ho Man being the non-executive Director, and Messrs.
Heng Kwoo Seng, Wang Jing Zhong and Wang Jian Zhang being the independent non-executive Directors.
By Order of the Board
SCUD GROUP LIMITED

Fang Jin
Chairman
Hong Kong, 15 November 2007