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Future Bright Holdings Limited
佳 景 集 團 有 限 公 司*
(Incorporated in Bermuda with limited liability)
(Stock Code: 703)
DISCLOSEABLE TRANSACTION - RENEWAL OF
RIGHT OF USE AGREEMENT
The Board announces that on 28 October 2019, Bright Elite, a 70% owned subsidiary of the Company, as the tenant, entered into the Right of Use Agreement which, if countersigned by the Landlord, will give Bright Elite the right to use the Property as a food souvenir shop for 3 years with effect from 1 September 2019 at (i) a monthly base rent of HK$316,200 plus (ii) any amount which 16% of the annual turnover received from all business carried on in the Property exceeds the base rent paid for that year.
Venetian Cotai, its ultimate beneficial owners and its respective associates are Independent Third Parties to the Group and its connected persons as defined under the Listing Rules to the best of the Directors' knowledge.
Pursuant to HKFRS16, the Company needs to recognize the acquisition of the right to use the Property as an acquisition of asset and as one of the applicable percentage ratios in respect of the rental payable under the Right of Use Agreement is more than 5% but below 25%, the entering into of the Right of Use Agreement constitutes a disclosable transaction for the Company under the Listing Rules. Hence, it is subject to the notification and announcement requirements but exempt from Shareholders' approval requirement pursuant to Chapter 14 of the Listing Rules.
The Board announces that on 28 October 2019, Bright Elite, a 70% owned subsidiary of the Company, as tenant, entered into the Right of Use Agreement which, if countersigned by the Landlord, will give Bright Elite the right to use the Property as a food souvenir shop, with more details as set out below.
- For identification purpose only
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THE RIGHT OF USE AGREEMENT
Parties: | (1) Venetian Cotai, an Independent Third Party, as the landlord; and |
(2) Bright Elite, a 70% owned Macau subsidiary of the Company, as | |
the tenant. | |
Property: | Shop No. 2406a, St Mark's Square, The Venetian Macau. |
Term: | A period of 3 years with effect from 1 September 2019. |
Gross floor area: | Approximately 744 square feet. |
Rental: | The Tenant is required to pay to the Landlord (i) a base rent of |
HK$316,200 per month, payable on the first day of each month, plus | |
(ii) any amount which 16% of the annual turnover received from all | |
business carried on in the Property exceeds the base rent paid for that | |
year, payable on or before 1 March of the following calendar year or | |
within 30 days of the end of such right of use (whichever is earlier). | |
Deposit: | The Tenant is required to place with the Landlord a security deposit of |
HK$1,897,200, of which 50% will be by cash and the remaining 50% | |
will be by bank guarantee. |
To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Landlord and its ultimate beneficial owner(s) are Independent Third Parties.
RIGHT-OF-USE ASSETS
Pursuant to HKFRS16, the Company needs to recognize the acquisition of the right to use the Property as an acquisition of asset as follows:
Amount
HK$'000
Right of Use Agreement | 10,411 |
The above amount is calculated with reference to the present value of the aggregate right of use payments including stamp duty and estimated reinstatement costs and based on a discount rate of 5.89% currently used by the Group for all its other right-of-use assets.
REASON AND BENEFIT FOR ENTERING INTO THE RIGHT OF USE AGREEMENT
The Group has been operating a food souvenir shop at the Property for a few years already and the past performance has generally been satisfactory. The Company plans to continue the operation of this food souvenir shop for another 3 years to generate stable turnover for the Group.
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The rental terms under the Right of Use Agreement were determined after arm's length negotiation between the parties and with reference to the prevailing market rent of similar properties in the nearby area. The Directors considered that the transaction contemplated under the Right of Use Agreement is in the ordinary and usual course of business of the Group, the terms of the Right of Use Agreement are on normal commercial terms and fair and reasonable and in the interests of the Company and the Shareholders as a whole.
INFORMATION OF THE COMPANY, THE TENANT AND THE LANDLORD
Information of the Company and the Tenant
The Company is principally engaged in the sales of food and catering, food souvenir and property investment business. Bright Elite is a company incorporated in Macau with limited liability and a 70% owned subsidiary of the Company. Bright Elite is principally engaged in operation of food souvenir business.
Information of the Landlord
Venetian Cotai is a limited liability company by shares incorporated under the laws of Macau. Venetian Cotai, its ultimate beneficial owners and its respective associates are Independent Third Parties to the Group and its connected persons as defined under the Listing Rules to the best of the Directors' knowledge.
LISTING RULES IMPLICATIONS
Pursuant to HKFRS16, the Company needs to recognize the acquisition of the right to use the Property as an acquisition of asset and as one of the applicable percentage ratios in respect of the rental payable under the Right of Use Agreement is more than 5% but below 25%, the entering into of the Right of Use Agreement constitutes a disclosable transaction for the Company under the Listing Rules. Hence, it is subject to the notification and announcement requirements but exempt from Shareholders' approval requirement pursuant to Chapter 14 of the Listing Rules.
DEFINITIONS
In this announcement, unless the context otherwise requires, the following expressions shall have the following meaning:
"Board" | the board of Directors of the Company |
"Bright Elite" or "Tenant" | B r i g h t E l i t e G o u r m e t C o m p a n y L i m i t e d , a c o m p a n y |
incorporated in Macau and a 70% owned subsidiary of the | |
Company, as the tenant under the Right of Use Agreement | |
"Company" | Future Bright Holdings Limited (Stock Code: 703), a company |
incorporated in Bermuda with limited liability, the shares of | |
which are listed on the Stock Exchange |
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"Directors" | the directors of the Company |
"Group" | the Company and its subsidiaries |
"HKFRS" | Hong Kong Financial Reporting Standards issued by the Hong |
Kong Institute of Certified Public Accountants | |
"Independent Third Party" | a third party which is independent of the Company and its |
connected persons (as defined in the Listing Rules) | |
"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"Macau" | Macau Special Administrative Region of the People's Republic |
of China | |
"Property" | Shop No. 2406a, St Mark's Square, The Venetian Macau |
"Right of Use Agreement" | the right of use agreement signed by the Tenant and delivered |
to the Landlord on 28 October 2019 for its signing | |
"Shareholder(s)" | holder(s) of the issued share(s) of the Company |
"Stock Exchange" | The Stock Exchange of Hong Kong Limited |
"Venetian Cotai" | Venetian Cotai Limited, a company incorporated in Macau, as |
the Landlord under the Right of Use Agreement |
By Order of the Board of
Future Bright Holdings Limited
Chan Chak Mo
Managing Director
Hong Kong, 28 October 2019
As at the date hereof, the members of the board of directors of the Company comprise (i) Mr. Chan Chak Mo, the managing Director, (ii) Mr. Chan See Kit, Johnny, the Chairman and executive Director, (iii) Mr. Lai King Hung, the deputy Chairman and executive Director,
- Ms. Leong In Ian, the executive Director and (v) Mr. Cheung Hon Kit, Mr. Yu Kam Yuen, Lincoln and Mr. Chan Pak Cheong Afonso, the independent non-executive Directors.
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