Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
DIT GROUP LIMITED
築 友 智 造 科 技 集 團 有 限 公 司
(Incorporated in Bermuda with limited liability)
(Stock Code: 726)
CONTINUING CONNECTED TRANSACTION
IN RELATION TO ENTERING INTO
THE PROPERTY LEASING AGREEMENT
THE PROPERTY LEASING AGREEMENT
The Board wishes to announce that on 11 May 2021 (after trading hours), Drawin Changsha (as the landlord), an indirect non-wholly owned subsidiary of the Company, and Drawin Manufacture (as the tenant) entered into the Property Leasing Agreement, pursuant to which, Drawin Changsha shall lease the properties within the Changsha technology park to the Drawin Manufacture Group Entities for a term of one year commencing from 11 May 2021 to 10 May 2022 (both days inclusive).
IMPLICATIONS UNDER THE LISTING RULES
As at the date of this announcement, Drawin Manufacture indirectly held approximately 63.53% of the issued Shares, hence an indirect controlling shareholder and a connected person of the Company under the Listing Rules. Accordingly, the Property Leasing Agreement and the transactions contemplated thereunder constitute a continuing connected transaction of the Company under Chapter 14A of the Listing Rules.
As the highest of all of the applicable percentage ratios in respect of the continuing connected transactions under the Property Leasing Agreement is more than 0.1% but less than 5%, the contemplated transaction under the Property Leasing Agreement is only subject to the annual review, reporting and announcement requirements but exempt from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.
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THE PROPERTY LEASING AGREEMENT
The principal terms of the Property Leasing Agreement are set out below:
Date: | 11 May 2021 |
Landlord: | Drawin Changsha |
Tenant: | Drawin Manufacture |
The respective leased premises may be used by the Drawin | |
Manufacture Group Entities | |
Premises: | Properties within the Changsha technology park |
Leasing and ancillary | Pursuant to the Property Leasing Agreement, Drawin |
services: | Changsha agreed to (i) lease to the relevant Drawin |
Manufacture Group Entities the office premises, staff | |
dormitories, finished production warehouses, test plants, villa, | |
showroom and prefabricated components manufacturing | |
plants, and (ii) provide to the same certain ancillary services | |
including the supply of heating and hot water and the | |
provision of technology park maintenance services (the | |
''Leasing and Ancillary Services Arrangement''). | |
Term: | For a term of one year commencing from 11 May 2021 to 10 |
May 2022 (both days inclusive) | |
Leased area: | 19,812.18 square metres in total |
Fees payable: | The total amount of fees payable by Drawin Manufacture on |
behalf of the Drawin Manufacture Group Entities to Drawin | |
Changsha is calculated by reference to the leased area used by | |
each Drawin Manufacture Group Entity and comprises of two | |
components, namely (i) rentals and (ii) service fees in respect | |
of certain ancillary services provided by Drawin Changsha, | |
including the supply of heating and hot water and the | |
provision of technology park maintenance services. |
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The breakdown of the monthly rental and service fees payable by reference to each usage of the leased premises is as follows:
Monthly | |||||||
Monthly | service fee | ||||||
rental per | per square | Total monthly | |||||
square metre | metre of | Total | rental and | ||||
Usage of leased premises | of leased area | leased area | leased area | service fees | |||
(RMB) | (RMB) | (Square metre) | (RMB) | ||||
Office premises | 90.00 | 25.86 | 5,965.32 | 691,141.98 | |||
Staff dormitories | 24.00 | 4.04 | 4,401.08 | 123,406.28 | |||
Finished production | |||||||
warehouses | 30.00 | 6.37 | 2,588.72 | 94,151.74 | |||
Test plants | 60.00 | 27.11 | 4,516.73 | 393,452.35 | |||
Villa | 60.00 | 4.56 | 917.44 | 59,229.93 | |||
Showroom | 72.00 | 5.26 | 114.18 | 8,821.55 | |||
Prefabricated components | |||||||
manufacturing plants | 60.00 | 27.11 | 1,308.71 | 114,001.73 | |||
Total: | 19,812.18 | 1,484,205.56 | |||||
The rentals and service fees under the Property Leasing Agreement have been determined by Drawin Changsha and Drawin Manufacture after arm's length negotiation with reference to the prevailing market rates for comparable properties in Changsha.
Payment arrangement:
Drawin Manufacture on behalf of the Drawin Manufacture Group Entities shall pay to Drawin Changsha the rentals and service fees payable under the Property Leasing Agreement on a quarterly basis. Drawin Changsha shall issue an invoice to Drawin Manufacture before the 15th day of the month following the end of a quarter, and Drawin Manufacture shall make payment before the 22nd day of the same month.
Other utilities charges, including water and electricity shall be charged on actual incurred basis and payable on a monthly basis.
Where Drawin Changsha performs any repair and maintenance work in respect of the leased premises, additional fees may be charged.
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THE PREVIOUS PROPERTY LEASING AGREEMENT
On 11 May 2020, Drawin Changsha (as the landlord) entered into the Previous Property Leasing Agreement with Drawin Manufacture (as the tenant) in respect of the leasing and ancillary services arrangement. The principal terms of the Previous Property Leasing Agreement were set out in the announcement of the Company dated 11 May 2020.
In respect of the leasing and ancillary services arrangement, the Company was required to set an annual cap in respect of the maximum aggregate transaction amounts over the term of the Previous Property Leasing Agreement. The actual realized transaction amount in 2020 and the annual cap in relation to the leasing and ancillary services arrangement under the Previous Property Leasing Agreement are set out below:
Actual | ||
realized | ||
Usage of the Previous Property Leasing Agreement | amount | Annual cap |
(RMB, | ||
approximately) | (RMB) | |
Leasing and ancillary services arrangement | 10.86 million | 16.21 million |
The actual transaction amounts in relation to the leasing and ancillary services arrangement were lower than the annual cap primarily due to as a result of Drawin Changsha offering rental concessions of RMB5.35 million to Drawin Manufacture in respect of properties leased under the Previous Property Leasing Agreement, in support of relevant national policy of rental concessions during the COVID-19 pandemic.
PROPOSED ANNUAL CAP
The Company is required under Rule 14A.53 of the Listing Rules to set an annual cap over the value of the annual payment by Drawin Manufacture to Drawin Changsha in respect of the Leasing and Ancillary Services Arrangement pursuant to the Property Leasing Agreement. In arriving at the Proposed Annual Cap, the Directors have taken into account the rentals and service fees payable and the estimated utilities charges payable during the term of the Property Leasing Agreement. It is estimated that the maximum transaction value during the term of the Property Leasing Agreement will be RMB18 million (equivalent to approximately HK$21.76 million).
The rentals, service fees and other related utility charges under the Property Leasing Agreement have been determined by Drawin Manufacture and Drawin Changsha after arm's length negotiation with reference to the prevailing market rates for comparable properties in Changsha.
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REASONS FOR AND BENEFITS OF ENTERING INTO THE PROPERTY LEASING AGREEMENT
The Group believes that it can best utilize its vacant premises in the Changsha technology park by way of leasing its properties. It selects tenants based on its internal evaluation and selection procedures based on various factors, such as quality of the tenants and relationship with such tenants.
The Board (including all independent non-executive Directors, but excluding Ms. Wu Wallis (alias Li Hua), a non-executive Director and the daughter of Mr. Wu Po Sum, who indirectly holds the entire equity interest in Drawin Manufacture) is of the view that:
- the terms and conditions of the Property Leasing Agreement are on normal commercial terms which are fair and reasonable;
- the Proposed Annual Cap is fair and reasonable; and
- the Property Leasing Agreement and the transactions contemplated thereunder were entered into and will be conducted in the ordinary and usual course of business of the Company and its subsidiaries, and are in the interest of the Company and the Shareholders as a whole.
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 Property Leasing Agreement and the transactions contemplated thereunder. For good corporate governance purpose, Ms. Wu Wallis (alias Li Hua) had abstained from voting on the relevant Board resolutions approving the Property Leasing Agreement and the transactions contemplated thereunder.
INFORMATION OF THE PARTIES
The Company
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.
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DIT Group Ltd. published this content on 11 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 May 2021 10:41:05 UTC.