DIT : CONNECTED TRANSACTION IN RELATION TO PROVISION OF FINANCIAL ASSISTANCE

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DIT GROUP LIMITED 築 友 智 造 科 技 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 726)

CONNECTED TRANSACTION

IN RELATION TO PROVISION OF FINANCIAL ASSISTANCE

PROVISION OF MORTGAGE

Reference is made to the announcement of the Company dated 30 March 2020 regarding the Mortgage Agreement entered into on 30 March 2020 by Tianjin Drawin (an indirect wholly-owned subsidiary of the Company) with the Bank, pursuant to which, Tianjin Drawin agreed to provide the Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture (an indirect controlling shareholder of the Company) under the 2020 Loan Agreement in respect of the 2020 Loan which has been on-lent to Drawin Investment (an indirect wholly-owned subsidiary of the Company) on the same terms as the 2020 Loan Agreement.

With a view to extend and increase the 2020 Loan for a year for on-lending the same to Drawin Investment, on 29 March 2021 (after trading hours), Drawin Manufacture entered into the Loan Agreement with the Bank in respect of a loan facility of up to RMB20,000,000 (equivalent to approximately HK$23,754,000), which represents an increase of RMB5,000,000 from the principal amount in the 2020 Loan. Save for the increase in the principal amount, the Loan Agreement is on the same terms as the 2020 Loan Agreement. The Loan will be on-lent to Drawin Investment on better terms than those offered in the Loan Agreement. Pursuant to the Mortgage Agreement, the Mortgage will continue to be in force to secure the repayment obligations of Drawin Manufacture under the Loan Agreement.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Drawin Manufacture indirectly held approximately 63.5% of the issued Shares, thus an indirect controlling shareholder of the Company. Drawin Manufacture is also indirectly wholly-owned by Mr. Wu Po Sum, who is the father of Ms. Wu Wallis (alias Li Hua) (a non-executive Director). Hence, Drawin Manufacture is a connected person of the Company under the Listing Rules. The provision of the Mortgage by Tianjin Drawin under the Mortgage Agreement to secure the repayment obligations of Drawin Manufacture under the Loan Agreement therefore constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios in respect of the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement are more than 0.1% but less than 5%, the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement is subject to reporting and announcement requirements but exempt from the independent Shareholders' approval under Chapter 14A of the Listing Rules.

As stated in the announcement of the Company 30 November 2020, Xiangtan Drawin entered into mortgage agreement with the Bank and extended its obligation for another 12 months, pursuant to which, Xiangtan Drawin agreed to provide the Xiangtan Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture under a loan agreement in respect of a loan facility of up to RMB40,000,000 granted by the Bank to Drawin Manufacture. The provision of the Xiangtan Mortgage constituted a connected transaction of the Company under Chapter 14A of the Listing Rules and was subject to reporting and announcement requirements but exempt from the independent Shareholders' approval under Chapter 14A of the Listing Rules.

Both Tianjin Drawin and Xiangtan Drawin are indirect wholly-owned subsidiaries of the Company, and the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement and the provision of Xiangtan Mortgage were both entered into within a 12-month period and are of similar nature. The applicable percentage ratios in respect of the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement, if aggregated with the Xiangtan Mortgage, remain more than 0.1% but less than 5%; therefore, the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement remains subject to reporting and announcement requirements but exempt from the independent Shareholders' approval under Chapter 14A of the Listing Rules.

The on-lending of the loan from Drawin Manufacture to Drawin Investment also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules, but is fully exempted from Shareholders' approval, annual review and all disclosure requirements pursuant to Rule 14A.90 of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated 30 March 2020 regarding the Mortgage Agreement entered into on 30 March 2020 by Tianjin Drawin (an indirect wholly-owned subsidiary of the Company) with the Bank, pursuant to which, Tianjin Drawin agreed to provide the Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture (an indirect controlling shareholder of the Company) under the 2020 Loan Agreement in respect of the 2020 Loan which has been on-lent to Drawin Investment (an indirect wholly-owned subsidiary of the Company) on the same terms as the 2020 Loan Agreement.

With a view to extend and increase the 2020 Loan for a year for on-lending the same to Drawin Investment, on 29 March 2021 (after trading hours), Drawin Manufacture entered into the Loan Agreement with the Bank in respect of a loan facility of up to RMB20,000,000 (equivalent to approximately HK$23,754,000), which represents an increase of RMB5,000,000 from the principal amount in the 2020 Loan. Save for the increase in the principal amount, the Loan Agreement is on the same terms the 2020 Loan Agreement. The Loan will be on-lent to Drawin Investment on better terms than those offered in the Loan Agreement. Pursuant to the Mortgage Agreement, the Mortgage will continue to be in force to secure the repayment obligations of Drawin Manufacture under the Loan Agreement.

LOAN AGREEMENT

The maximum principal amount of the Loan is RMB20,000,000. The Loan bears interest at a rate of 6.5% per annum for a term of 12 months commencing from the date of drawdown. The repayment obligations of Drawin Manufacture under the Loan Agreement is secured by the Mortgage, among others, and the provision of the Mortgage is one of the conditions under the Loan Agreement.

Upon drawdown of the Loan from the Bank in accordance with the Loan Agreement, it is proposed that Drawin Manufacture will on-lend the Loan to Drawin Investment (an indirect wholly-owned subsidiary of the Company which directly holds the entire equity interests in Tianjin Drawin) as a non-interest bearing shareholder's loan at better repayment terms than those set out in the Loan Agreement, without receiving any fee or commission nor any counter-security or guarantee from Drawin Investment, in support of the Group's business development.

THE MORTGAGE

As stated in the announcement of the Company dated 30 March 2020, on 30 March 2020, Tianjin Drawin entered into the Mortgage Agreement with the Bank to provide the Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture for the 2020 Loan with a principal amount of RMB15,000,000 which has been on-lent to Drawin Investment. As the Loan Agreement has been entered into for another 12-month period, the Mortgage has been extended for another 12 months from the date of drawdown of the Loan pursuant to the Mortgage Agreement.

As the purpose of the provision of the Mortgage is to facilitate Drawin Manufacture to obtain the 2020 Loan from the Bank for on-lending the same to Drawin Investment, no fee, commission or other consideration will be received by Tianjin Drawin for the provision of the Mortgage.

INFORMATION ON THE GROUP, TIANJIN DRAWIN, DRAWIN MANUFACTURE AND THE BANK

The Company was incorporated as an exempted company with limited liability in Bermuda, the Shares of which are listed on the Stock Exchange. It is an investment holding company with subsidiaries principally engaged in prefabricated construction business and property investment in the PRC.

Tianjin Drawin is a company established under the laws of the PRC with limited liability. It is an indirect wholly-owned subsidiary of the Company and is mainly engaged in construction industrialisation.

Drawin Manufacture is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Drawin Manufacture indirectly held approximately 63.5% of the issued Shares, thus an indirect controlling shareholder of the Company. Drawin Manufacture is also indirectly wholly-owned by Mr. Wu Po Sum, who is the father of Ms. Wu Wallis (alias Li Hua) (a non-executive Director). Drawin Manufacture is an investment holding company. Apart from the equity interests in the Company, Drawin Manufacture, through its PRC subsidiaries, is principally engaged in general consultation and design of prefabricated construction business in the PRC.

To the best knowledge of the Directors, the Bank is a licensed commercial bank in the PRC and provides a variety of financial products and services to corporate and personal banking customers. To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, each of the Bank and its ultimate beneficial owners is an Independent Third Party.

REASONS FOR AND BENEFITS OF THE PROVISION OF THE MORTGAGE

As stated in the announcement of the Company dated 30 March 2020, in the course of business development, the Group seeks various source of financing from time to time. As the proposed terms of the loan offered by commercial banks to the Group are not as favourable as the terms offered to Drawin Manufacture by the Bank, Drawin Manufacture, being an indirect controlling shareholder of the Company, proposed to obtain the Loan from the Bank and on-lend the same to Drawin Investment at better repayment terms than those set out in the Loan Agreement, without receiving any fee or commission nor any counter-security or guarantee from Drawin Investment for such arrangement. As the provision of the Mortgage is one of the conditions of the Loan under the Loan Agreement, the Directors believe that the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement will facilitate Drawin Manufacture to obtain the Loan from the Bank for a year for on-lending to Drawin Investment in support of the Group's business development and which in turn is beneficial to the Company and its shareholders as a whole.

The Directors (including the independent non-executive Directors) are of the view that the provision of the Mortgage under the Mortgage Agreement to secure the repayment obligations of Drawin Manufacture under the Loan Agreement is on normal commercial terms and is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As at the date of this announcement, Drawin Manufacture indirectly held approximately 63.5% of the issued Shares, thus an indirect controlling shareholder of the Company. Drawin Manufacture is also indirectly wholly-owned by Mr. Wu Po Sum, who is the father of Ms. Wu Wallis (alias Li Hua) (a non-executive Director). Hence, Drawin Manufacture is a connected person of the Company under the Listing Rules. The provision of the Mortgage by Tianjin Drawin under the Mortgage Agreement to secure the repayment obligations of Drawin Manufacture under the Loan Agreement therefore constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios in respect of the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement are more than 0.1% but less than 5%, the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement is subject to reporting and announcement requirements but exempt from the independent Shareholders' approval under Chapter 14A of the Listing Rules.

As stated in the announcement of the Company 30 November 2020, Xiangtan Drawin entered into mortgage agreement with the Bank and extended its obligation for another 12 months, pursuant to which, Xiangtan Drawin agreed to provide the Xiangtan Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture under a loan agreement in respect of a loan facility of up to RMB40,000,000 granted by the Bank to Drawin Manufacture. The provision of the Xiangtan Mortgage constituted a connected transaction of the Company under Chapter 14A of the Listing Rules and was subject to reporting and announcement requirements but exempt from the independent Shareholders' approval under Chapter 14A of the Listing Rules.

Both Tianjin Drawin and Xiangtan Drawin are indirect wholly-owned subsidiaries of the Company, and the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement and the provision of Xiangtan Mortgage were both entered into within a 12-month period and are of similar nature. The applicable percentage ratios in respect of the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement, if aggregated with the Xiangtan Mortgage, remain more than 0.1% but less than 5%; therefore, the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement remains subject to reporting and announcement requirements but exempt from the independent

Shareholders' approval under Chapter 14A of the Listing Rules.

The provision of the Shareholder's Loan by Drawin Manufacture to Drawin Investment also constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As the Shareholder's Loan is conducted on normal commercial terms or better and the Shareholder's Loan is not secured by any assets of the Group, the Shareholder's Loan is fully exempted from Shareholders' approval, annual review and all disclosure requirements pursuant to Rule 14A.90 of the Listing Rules.

To the best of the Directors' knowledge and belief after having made all reasonable enquiries, other than Ms. Wu Wallis (alias Li Hua) (a non-executive Director) who is the daughter of Mr. Wu Po Sum (who indirectly holds the entire equity interests in Drawin Manufacture), none of the Directors has a material interest in the provision of the Mortgage to secure the repayment obligations of Drawin Manufacture under the Loan Agreement, the Shareholder's Loan and the transactions contemplated thereunder. Other than Ms. Wu

Wallis (alias Li Hua) who had abstained from voting on the relevant Board resolutions approving the Mortgage Agreement, the Shareholder's Loan and the transactions contemplated thereunder for good corporate governance purpose, none of the other Directors was required to abstain from voting on the relevant Board resolutions.

DEFINITIONS

Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as set forth below:

''2020 Loan''

the loan in the principal amount of up to RMB15,000,000 granted by the Bank to Drawin Manufacture in accordance with the terms of the 2020 Loan Agreement and subject to the conditions therein

''2020 Loan Agreement''

the loan agreement dated 30 March 2020 entered into between Drawin Manufacture and the Bank, pursuant to which, the Bank agreed to grant the 2020 Loan to Drawin Manufacture, as referred to in the announcement of the Company dated 30 March 2020

''Bank''

Yuhua Sub-branch of Changsha Rural Commercial Bank Co., Ltd., a licensed commercial bank in the PRC, being the lender under the Loan Agreement

''Board''

the board of Directors

''Company''

DIT Group Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange

''connected person''

''controlling shareholders''

''Director(s)''

has the meaning ascribed to it under the Listing Rules has the meaning ascribed to it under the Listing Rules the director(s) of the Company from time to time

''Drawin Investment''

Drawin Intelligent Manufacture Technology Investment Limited* (築友智造 科技投資有限公司) (formerly known as China Minsheng Drawin Technology Investment Limited* (中民築友科技投資有限公司)), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

''Drawin Manufacture''

Drawin Intelligent Manufacture Technology Industry Group Limited* (築友智造 科技產業集團有限公司) (formerly known as China Minsheng Drawin Technology Industry Limited* (中民築友科技產業有限公司)), a company established under the laws of the PRC with limited liability, being the borrower under the Loan Agreement

''Group''

the Company and its subsidiaries from time to time

''Hong Kong''

the Hong Kong Special Administrative Region of the People's Republic of China

''Listing Rules''

''Independent Third Party''

third party who is independent of and not connected with the Company and the connected person(s) of the Company the Rules Governing the Listing of Securities on the Stock Exchange

''Loan''

the loan in the principal amount of up to RMB20,000,000 granted by the Bank to Drawin Manufacture in accordance with the terms of the Loan Agreement and subject to the conditions therein

''Loan Agreement''

the loan agreement dated 29 March 2021 entered into between Drawin Manufacture and the Bank, pursuant to which, the Bank agreed to grant the Loan to Drawin Manufacture

''Mortgage''

the mortgage provided by Tianjin Drawin with its land use rights of a stated-owned construction land (with a gross floor area of approximately 55,474.5m2) to the Bank pursuant to the Mortgage Agreement

''Mortgage Agreement''

the mortgage agreement dated 30 March 2020 entered into between Tianjin Drawin and the Bank, pursuant to which, Tianjin Drawin agreed to provide the Mortgage in favour of the Bank as security for the repayment obligations of Drawin Manufacture in respect of loan facilities granted by the Bank to Drawin Manufacture

''PRC''

the People's Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the People's Republic of China and Taiwan

''Share(s)''

the ordinary share(s) of par value HK$0.40 each in the share capital of the Company

''Shareholder(s)''

the holder(s) of the issued Share(s)

''Shareholder's Loan''

the proposed unsecured non-interest bearing shareholder's loan in the amount of RMB20,000,000 to be provided by Drawin Manufacture to Drawin Investment

''Stock Exchange''

The Stock Exchange of Hong Kong Limited

''Tianjin Drawin''

Tianjin China Minsheng DIT Limited* (天津中民築友智造 科技有限公司), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

''Xiangtan Drawin''

Xiangtan Drawin Intelligent Manufacture Technology Limited* (湘潭築友智造 科技有限公司) (formerly known as Xiangtan China Minsheng Drawin Technology Limited* (湘 潭中民築友科技有限公司)), a company established under the laws of the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

''Xiangtan Mortgage''

the mortgage provided by Xiangtan Drawin with its land use rights of a stated-owned construction land (with a gross floor area of approximately 89,025m2) to the Bank pursuant to a mortgage agreement dated 29 November 2019 entered into between it and the Bank

For the purpose of illustration only, amounts denominated in RMB in this announcement have been translated into HK$ at the rate of RMB1 = HK$0.84198. Such translations should not be construed as a representation that the amounts in question have been, could have been or could be converted at any particular rate at all.

By order of the Board of

DIT Group Limited

Liu Weixing

Chairman and Executive Director

Hong Kong, 29 March 2021

As at the date of this announcement, the Board comprises Mr. Liu Weixing (Chairman), Mr. Guo Weiqiang and Ms. Wang Jing as executive Directors; Ms. Wu Wallis (alias Li Hua) and Mr. Wang Jun as non-executive Directors; Mr. Jiang Hongqing, Mr. Lee Chi Ming and Mr. Ma Lishan as independent non-executive Directors.

*

For identification purpose only