Waiver from NZX Listing Rule 5.2.1

NZ RegCo

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16 November 2023
NZ RegCo Decision
New Zealand King Salmon Investments Limited (“NZK”)
Application for waiver from NZX Listing Rule 5.2.1

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Background
1. The information on which this decision is based is set out in Appendix One to this decision. This
waiver will not apply if that information is not, or ceases to be, full and accurate in all material
respects.
2. The NZX Listing Rules (Rules) to which this decision relates are set out in Appendix Two.
3. Capitalised terms that are not defined in this decision have the meanings given to them in the
Rules.
4. NZX Regulation Limited (NZ RegCo) notes that NZX will publish a revised Major and Related
Parties Guidance Note on 18 December 2023 and NZ RegCo has considered the incoming
guidance in making the decision to grant this waiver.
Waiver from Listing Rule 5.2.1
Decision
5. Subject to the conditions set out in paragraph 6 below and on the basis that the information
provided by New Zealand King Salmon Investments Limited (NZK) is complete and accurate in all
material aspects, NZ RegCo grants NZK a waiver from Rule 5.2.1, to the extent that this Rule
would otherwise require NZK to seek shareholder approval in relation to the Distribution
Agreement.
6. The waiver in paragraph 5 above is provided on the conditions that:
a. The Directors of NZK other than any Director who is an Associated Person of CRE or CRFSC
certify that:
i. the terms of the Distribution Agreement have been negotiated, and the Distribution
Agreement will be entered into, on an arm’s length commercial basis;
ii. NZK was not unduly influenced to enter into the Distribution Agreement by CRE or
CRFSC;
iii. entry into the Distribution Agreement is in the best interests of NZK and all of NZK’s
shareholders who are not CRE or related to, or Associated Persons of, CRE; and
iv. the terms of the Distribution Agreement are not materially different to similar distribution
agreements entered into by NZK with non-related parties.
b. The waiver, its conditions and implications are disclosed in NZK’s next annual report; and
c. NZK release a statement to NZX through MAP about its entry into the Distribution Agreement
and why it and the waiver is in the best interests of NZK and the non-interested shareholders.
Reasons
7. In coming to the decision to provide the waiver set out in paragraph 5 above, NZ RegCo has
considered that:
a. the purpose of Rule 5.2.1 is to ensure that shareholders have an opportunity to consider, and
vote on, Material Transactions where there is, or may be a perception of, the potential for
undue influence by a Related Party on an Issuer’s decision to enter into a transaction or agree
to its terms. The granting of this waiver will not offend the policy behind Rule 5.2.1;
b. NZ RegCo is satisfied that CRFSC will not receive favourable consideration due to the
Related Party Relationships, and that the Related Party Relationships have not unduly

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influenced the decision to enter into, or the terms and conditions of, the Distribution
Agreement, as:
i. any Director who is an Associated Person of CRE or CRFSC has had limited involvement
in the discussions regarding the Distribution Agreement, and has abstained from voting
on any decisions relating to entry into the Distribution Agreement;
ii. the terms of the Distribution Agreement, and entry into the Distribution Agreement, have
been negotiated on an arm’s length commercial basis; and
iii. NZK contemplates providing supply to CRFSC under the Distribution Agreement at prices
no more favourable to CRFSC than those charged to other customers generally,
c. the conditions at paragraph 6 (a) and (c) above provide comfort that the Distribution
Agreement has been negotiated and entered into on an arm’s length commercial basis, and is
in the best interests of NZK and its shareholders that are not CRE or related to or associated
with CRE or CRFSC; and
d. there is precedent for the decision.
Confidentiality
8. NZK has requested this decision be kept confidential until an announcement of the Distribution
Agreement is released to the market.
9. In accordance with Rule 9.7.2(a), NZ RegCo grants NZK’s request.

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Appendix One
1. New Zealand King Salmon Investments Limited (
NZK
) is a Listed Issuer with ordinary shares
quoted on the NZX Main Board and on the ASX (as a foreign exempt listing).
2. To support NZK’s expansion into Mainland China, NZK proposes to formalise its trading
relationship with China Resources Food Supply Chain Co. Ltd (
CRFSC
) by entering into an
exclusive distribution agreement (
Distribution Agreement
). CRFSC is partially owned
(indirectly) by China Resources Enterprise Limited (
CRE
). CRE also owns 9.81% of the ordinary
shares in NZK.
3. The key terms of the Distribution Agreement can be summarised as:
(a)
Term:
The initial term of the Distribution Agreement is three years from the date of
execution of the agreement. The parties have the ability to extend the term for a further two
years.
(b)
Minimum Order Volume:
CRFSC is required to place orders totalling a minimum of
4,000kgs of salmon products per calendar month throughout the term. If CRFSC fails to
place an order for the minimum order volume for any calendar month throughout the term,
NZK can either terminate the Distribution Agreement or appoint one or more other
distributors within Mainland China.
(c)
Exclusivity:
NZK appoints CRFSC as the exclusive distributor to import and distribute a
range of salmon products in Mainland China and CRFSC shall only purchase the products
from NZK (except that CRFSC may purchase and distribute salmon products from certain
other New Zealand producers).
(d)
Sales Price:
The sales price for the salmon products is not fixed in the contract and varies
based on a number of factors. We understand that NZK intends to charge CRFSC
commercial rates which are no more favourable to CRFSC than other customers.
4. NZK considers that CRFSC is a Related Party of NZK as:
(a) CRE, an indirect shareholder of CRFSC, owns 9.81% of the shares in NZK; and
(b) Yuen Carol Chen, Deputy General Manager of Corporate Strategy and Development at
CRE, is a director of NZK.



(together, the
Related Party Relationships
)
5. As at the date of this waiver decision, NZK’s Average Market Capitalisation is approximately
NZ$107 million.
6. On the basis that the Distribution Agreement could remain on foot for longer than the minimum
term and that the exact volume of products to be purchased over the term of the Distribution
Agreement is uncertain, there is potential for NZK to sell salmon products to CRFSC with a value
which could be in excess of 10% of the Average Market Capitalisation of NZK.
7. NZK senior management have negotiated the Distribution Agreement on NZK’s behalf. Carol
Chen has been party to certain discussions regarding the Distribution Agreement, however NZK
submits that her involvement has been limited and that she has not had any undue influence on
NZK’s decision to enter into the Distribution Agreement, or its terms and conditions.

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Appendix Two
Rule 5.2 Transactions with Related Parties
5.2.1 An Issuer must not enter into a Material Transaction if a Related Party is, or is likely
to become:
a. a direct party to the Material Transaction, or
b. a beneficiary of a guarantee or other transaction which is a Material
Transaction,
unless that Material Transaction is approved by an Ordinary Resolution (such
resolution being subject.
Definitions
Material Transaction
means a transaction, or a related series of transactions, whereby an Issuer:
(a) buys, acquires, gains, leases (as lessor or lessee), sells or otherwise disposes of, assets
having an Aggregate Net Value above 10% of the Issuer’s Average Market Capitalisation, ...
Related Party
means a person who, at the time of a Material Transaction, or at any time within the previous six
months, was:
(a) a Director or Senior Manager of the Issuer or any of its Subsidiaries,

(b) the holder of a Relevant Interest in 10% or more of a Class of Equity Securities of the Issuer
carrying Votes,

(c) an Associated Person of the Issuer or any of the persons referred to in (a) or (b), except
where the person becomes an Associated Person as a consequence of the Material
Transaction, ...

Associated Person
a person (A) is associated with, or an Associated Person of, another person (B) if:
(a) A is able, directly or indirectly, to exert a substantial degree of influence over the activities of
B (or vice versa), ...