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(Incorporated in Hong Kong with limited liability)
(Stock Code: 00270)
CONTINUING CONNECTED TRANSACTIONS
ON PROPERTY MANAGEMENT AGREEMENTS
On 31 May 2019, Wanye (a subsidiary of the Company) and Yuehai Property Management (a subsidiary of GDH) entered into the Panyu Property Management Agreement pursuant to which Yuehai Property Management has agreed to provide certain property management services in respect of the properties in Panyu Project for three years commencing on 1 June 2019 and expiring on 31 May 2022.
On 16 November 2018, Wanye and Yuehai Property Management had also entered into the Existing Property Sales and Exhibition Services Agreement pursuant to which Yuehai Property Management had agreed to provide certain property management services in respect of the sales and exhibition of Panyu Project for the period from 1 January 2019 to 31 May 2019. On 31 May 2019, Wanye and Yuehai Property Management entered into the New Property Sales and Exhibition Services Agreement for the renewal of the Existing Property Sales and Exhibition Services Agreement for two years commencing on 1 June 2019 and expiring on 31 May 2021.
On 26 October 2016, Guangdong Property Development (being an indirect wholly-owned subsidiary of GD Land; GD Land being a subsidiary of the Company and listed on the Stock Exchange) and Yuehai Property Management had entered into the Zhuguanglu Property Management Agreement pursuant to which Yuehai Property Management had agreed to provide certain property management services in respect of the Zhuguanglu Properties for three years from 1 September 2016 to 31 August 2019. Further details of the Zhuguanglu Property Management Agreement please refer to the announcement of GD Land dated 18 July 2018.
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In addition, on 31 January 2019, Guangdong Property Development and Yuehai Property Management had entered into the Sales Centre Property Services Agreement pursuant to which Yuehai Property Management had agreed to provide certain property services in respect of the sales venue of the Zhuguanglu Project for the period from 1 February 2019 to 31 December 2019. Further details of the Sales Centre Property Services Agreement please refer to the announcement of GD Land dated 31 January 2019.
GDH is holding approximately 56.49% of the issued shares of the Company. By virtue of this shareholding interest, GDH is a controlling shareholder and thus a connected person of the Company. Yuehai Property Management (being a subsidiary and thus an associate of GDH as defined in the Listing Rules) is also a connected person of the Company. Therefore, each of the Transactions contemplated under the Agreements constitutes a continuing connected transaction of the Company under the Listing Rules.
Based on the estimated service fees paid/payable by the Group under the Agreements, the highest annual cap (when aggregated) is estimated to be RMB19,000,000 (equivalent to approximately HK$22,148,300 ), which exceeds 0.1% but is less than 5% of the applicable percentage ratio(s) for the purpose of Chapter 14A of the Listing Rules. The Transactions (when aggregated) are subject to the reporting and announcement requirements, but are exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.
The Company will comply with the annual review requirements under Rules 14A.55 to 14A.57 of the Listing Rules in relation to the Agreements.
PANYU PROPERTY MANAGEMENT AGREEMENT
On 31 May 2019, Wanye (a subsidiary of the Company) and Yuehai Property Management (a subsidiary of GDH) entered into the Panyu Property Management Agreement pursuant to which Yuehai Property Management has agreed to provide certain property management services in respect of the properties in Panyu Project on the following terms:-
Parties | : | Wanye |
Yuehai Property Management | ||
Term | : | 1 June 2019 to 31 May 2022 |
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Services | : | Yuehai Property Management shall provide certain property management |
services (including property management, maintenance of public area, | ||
centralized air-conditioning, handling of payment of water and electricity | ||
charges, restaurant sewage treatment and other miscellaneous services) in | ||
respect of the office tower, shopping centre, SOHO office building, and | ||
underground car-parking spaces of Panyu Project. | ||
Service Fees | : | The service fees for the abovementioned services shall be paid by Wanye |
to Yuehai Property Management on a monthly basis and shall be calculated | ||
at the following monthly rates on a pro rata basis: |
- Management of office tower: RMB22.50 per sq. m.;
- Management of shopping centre: RMB52.00 per sq. m.;
- Management of SOHO office building: RMB4.80 per sq. m.;
- Management of underground car-parking spaces: RMB180.00 per car-parking space; and
- Restaurant sewage treatment: RMB4.50 per tonne.
As regard the payment of utilities charges in respect of the commercial and shopping units, electricity shall be charged at 1.125 times the electricity tariff set by the PRC Government and water shall be charged at 1.05 times the water tariff set by the PRC Government, taking into account the relevant wear and tear in the provision of such utilities by Yuehai Property Management.
PROPERTY SALES AND EXHIBITION SERVICES AGREEMENT
Existing Property Sales and Exhibition Services Agreement
On 16 November 2018, Wanye and Yuehai Property Management had entered into the Existing Property Sales and Exhibition Services Agreement in relation to the provision of certain property management services in respect of the sales and exhibition of Panyu Project for the period from 1 January 2019 to 31 May 2019. The scope of the services provided by Yuehai Property Management is the same with the New Property Sales and Exhibition Services Agreement.
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New Property Sales and Exhibition Services Agreement
On 31 May 2019, Wanye and Yuehai Property Management entered into the New Property Sales and Exhibition Services Agreement pursuant to which Yuehai Property Management has agreed to provide certain property management services in respect of the sales and exhibition of Panyu Project on the following terms:-
Parties | : Wanye |
Yuehai Property Management | |
Term | : 1 June 2019 to 31 May 2021 |
Service Scope | : Yuehai Property Management shall provide certain preliminary property |
preparatory services to Wanye in respect of the sales and exhibition | |
(including sales centre and office showroom, etc.) of Panyu Project, | |
including daily customer entertaining, facility maintenance, security and | |
order maintenance, cleaning, greening, pest control, and other preparatory | |
services relating to the preliminary works of Panyu Project | |
Service fees | : Shall be settled on a monthly basis and calculated on the basis of the salary |
and fringe benefits of the labour required to provide such services |
ZHUGUANGLU PROPERTY MANAGEMENT AGREEMENT
On 26 October 2016, Guangdong Property Development (being an indirect wholly-owned subsidiary of GD Land; GD Land being a subsidiary of the Company and listed on the Stock Exchange) and Yuehai Property Management had entered into the Zhuguanglu Property Management Agreement pursuant to which Yuehai Property Management had agreed to provide certain property management services in respect of the Zhuguanglu Properties for three years from 1 September 2016 to 31 August 2019. Further details of the Zhuguanglu Property Management Agreement please refer to the announcement of GD Land dated 18 July 2018.
SALES CENTRE PROPERTY SERVICES AGREEMENT
On 31 January 2019, Guangdong Property Development and Yuehai Property Management had also entered into the Sales Centre Property Services Agreement pursuant to which Yuehai Property Management had agreed to provide certain property services in respect of the sales venue of the Zhuguanglu Project for the period from 1 February 2019 to 31 December 2019. Further details of the Sales Centre Property Services Agreement please refer to the announcement of GD Land dated 31 January 2019.
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BASIS AND REASONS FOR THE TRANSACTIONS AND THE ANNUAL CAP
The estimated service fees paid/payable by the Group under the Panyu Property Management Agreement, the New Property Sales and Exhibition Services Agreement and the Existing Property Sales and Exhibition Services Agreement for the years of 2019, 2020, 2021 and 2022 are as follows:
Estimated service fees paid/payable | |||||||
2019 | 2020 | 2021 | 2022 | ||||
(RMB) | (RMB) | (RMB) | (RMB) | ||||
Panyu Property | 2,063,794.78 | 14,899,484.87 | 6,789,575.93 | 1,900,000.00 | |||
Management Agreement | |||||||
New Property Sales and Exhibition | 2,117,854.27 | 3,781,774.55 | 1,292,400.13 | - | |||
Services Agreement | |||||||
Existing Property Sales and | 1,484,375.53 | - | - | - | |||
Exhibition Services Agreement | |||||||
Total estimated service fees | 5,666,024.58 | 18,681,259.42 | 8,081,976.06 | 1,900,000.00 |
Based on the above, the aggregate annual caps under the Agreements for the years of 2019, 2020,
2021 and 2022 are as follows:
Annual Cap | |||||||
2019 | 2020 | 2021 | 2022 | ||||
(RMB) | (RMB) | (RMB) | (RMB) | ||||
Panyu Property | 2,200,000.00 | 15,000,000.00 | 7,000,000.00 | 2,100,000.00 | |||
Management Agreement | |||||||
New Property Sales and Exhibition | 2,300,000.00 | 4,000,000.00 | 2,000,000.00 | - | |||
Services Agreement | |||||||
Existing Property Sales and | 1,500,000.00 | - | - | - | |||
Exhibition Services Agreement | |||||||
Panyu Project Annual Cap | 6,000,000.00 | 19,000,000.00 | 9,000,000.00 | 2,100,000.00 | |||
Zhuguanglu Project Existing | 8,394,400.00 | - | - | - | |||
Annual Cap | |||||||
Aggregate Annual Cap | 14,394,400.00 | 19,000,000.00 | 9,000,000.00 | 2,100,000.00 |
The Transactions have been aggregated, for the Listing Rules purpose, on the basis that these are agreements where, in principle, Yuehai Property Management provides property management and/or related services to the Group.
The annual caps are determined after arm's length negotiation based on, as the case may be,
- historical transaction amounts; (ii) the number of staff required to provide the services;
- the fixed salary, floating salary, overtime charges, benefits, subsidies, union fees, etc. of such staff; (iv) the one-off payment for various supplies including staff uniforms and toolboxes, etc;
- gross floor area of the properties; (vi) the consumption level of electricity and water in Guangzhou with reference to that of other property projects; (vii) the estimated sewage treatment fees; and (viii) the prevailing market rates of similar services.
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