Annual Report 2015
REPORT OF THE DIRECTORS
81
CONNECTED TRANSACTIONS
(continued)
(14) On 24 August 2015, an agreement (the “Dragon Merchant Agreement”) was entered into between Catchy
Investments Limited (“Catchy”, a wholly owned subsidiary of the Company) and FSE Management Company
Limited (“FSE”) pursuant to which Catchy agreed to sell and assign, and FSE agreed to purchase and accept the
assignment of, the entire issued share capital of Dragon Merchant Limited (“Dragon Merchant”) and the entire
amount of the unsecured and non-interest bearing shareholder’s loan owing from Dragon Merchant to Catchy as at
the date of completion of the Dragon Merchant Agreement (“Completion”) at an aggregate cash consideration of
HK$258.0 million (subject to adjustment).
The main asset of Dragon Merchant and its subsidiary is the property situate at 8th Floor, Chevalier Commercial
Centre, 8 Wang Hoi Road, Kowloon Bay, Kowloon, Hong Kong. Details of the Dragon Merchant Agreement were
set out in the announcement of the Company dated 24 August 2015. Completion took place upon signing of the
Dragon Merchant Agreement and thereafter, Dragon Merchant and its subsidiary ceased to be subsidiaries of
the Company. The consideration was adjusted to approximately HK$255.3 million by reference to the unaudited
consolidated net tangible assets value of Dragon Merchant as at the date of Completion.
As FSE is a majority-controlled company (as defined in the Listing Rules) of Mr. Doo, FSE is therefore a connected
person of the Company and the disposal contemplated under the Dragon Merchant Agreement constitutes a
connected transaction for the Company under the Listing Rules.
(15) On 25 August 2015, a joint venture agreement (the “JV Agreement”) was entered into among Startley Limited
(“Startley”, a wholly owned subsidiary of CTF), Risma Limited (“Risma”, a wholly owned subsidiary of the
Company),
մɽ၅मᘒ
ږ
БଉέϞࠢʮ̡
(Chow Tai Fook Jewellery (Shenzhen) Co. Ltd.) (“CTFJ Shenzhen”,
an indirect wholly owned subsidiary of CTFJ) and Chow Tai Fook Qianhai Investments Company Limited (“CTF
Qianhai”, a wholly owned subsidiary of CTF as at the date of the JV Agreement) regarding the formation of two
joint venture entities, namely CTF Qianhai and
ଉέ
ۃ
ऎմɽ၅ಥʕːϞࠢʮ̡
(Shenzhen Qianhai Chow Tai
Fook Hong Kong Goods Centre Co., Ltd.) (the “PRC JV Company”), to develop and operate a high-end luxurious
shopping complex in Qianhai, Shenzhen, the PRC.
After completion of the JV Agreement:
(a) CTF Qianhai will be owned as to approximately 71.43% by Startley and approximately 28.57% by Risma; and
(b) the PRC JV Company will be established and owned as to 70.0% by CTF Qianhai and 30.0% by CTFJ
Shenzhen.
The effective interest in the PRC JV Company to be held by Startley, CTFJ Shenzhen and Risma will be 50.0%,
30.0% and 20.0%, respectively.
It is expected that the total investment in the PRC JV Company will be RMB350.0 million (equivalent to
approximately HK$437.5 million), of which RMB120.0 million (equivalent to approximately HK$150.0 million) will be
its registered capital. CTF Qianhai will contribute RMB245.0 million (equivalent to approximately HK$306.3 million)
(of which RMB175.0 million (equivalent to approximately HK$218.8 million) and RMB70.0 million (equivalent to
approximately HK$87.5 million) will be contributed by Startley and Risma, respectively, through CTF Qianhai) and
CTFJ Shenzhen will contribute RMB105.0 million (equivalent to approximately HK$131.3 million) as funding for the
total investment.
Completion of the JV Agreement will take place on the 5th business day following the satisfaction of the condition
precedents as set out in the JV Agreement. Details of the JV Agreement were set out in the announcement of the
Company dated 25 August 2015.
For the reasons stated above, CTF and CTFJ are connected persons of the Company and the entering into of the JV
Agreement therefore constitutes a connected transaction for the Company under the Listing Rules.
