江蘇寧滬高速公路股份有限公司 jiangsu … · for the year ended 31 december 2013, the...
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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.
JIANGSU EXPRESSWAY COMPANY LIMITED 江蘇寧滬高速公路股份有限公司
(Incorporated in the People’s Republic of China as a joint-stock limited company) (Stock Code: 00177)
RELATED PARTY TRANSACTIONS/CONNECTED TRANSACTION
ENTERING INTO COMPENSATION AGREEMENT FOR DEMOLITION OF PROPERTIES AND EQUIPMENT OF
MAQUN MONITORING CENTRE wITh jIANGSU ExPRESSwAY NETwORk OPERATION & MANAGEMENT CO., LTD.
ANDCONTINUING RELATED PARTY TRANSACTIONS/CONNECTED
TRANSACTIONENTERING INTO AMENDMENTS TO TENANCY CONTRACT wITh jIANGSU ExPRESSwAY NETwORk OPERATION &
MANAGEMENT CO., LTD.
Important Notice:
• The transactions are not subject to approval by shareholders in general meeting.
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• Since Communications Holdings, the controlling shareholder of the Company,
directly and indirectly holds over 30% interests in Network Operation Company,
the transactions contemplated under the Compensation Agreement entered into
with Jiangsu Expressway Network Operation & Management Co., Ltd. constitute
related party transactions/ connected transaction and the transactions contemplated
under the Amended Tenancy entered into with Jiangsu Expressway Network
Operation & Management Co., Ltd. constitute continuing related party transactions/
continuing connected transaction under listing rules of Shanghai Stock Exchange
and Hong Kong Stock Exchange, respectively, which are subject to reporting and
announcement requirements but exempt from the independent shareholders’ approval
in general meeting requirement.
• The entering into of the compensation agreement for demolition of properties
and equipment of Maqun Monitoring Centre and amendments to tenancy contract
with Jiangsu Expressway Network Operation & Management Co., Ltd. have been
approved by the directors of the Company (including independent non-executive
directors) on the 14th Meeting of 7th Session of the Board of Directors of the
Company convened on 25 April 2014. It is expected that there will be no adverse
impact on the Company nor constitution of reliance on the related party/connected
party.
• Connected directors Mr. Yang Gen Lin, Mr. Chen Xiang Hui, Mr. Du Wen Yi and
Mr. Qian Yong Xiang had abstained from voting on the resolution regarding these
transactions.
• Directors of the Company (including independent non-executive directors) are of the
view that the transactions are conducted under normal commercial terms and are fair
and reasonable.
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I. I N T R O D U C T I O N T O T h E N O R M A L R E L A T E D P A R T Y TRANSACTIONS AND CONNECTED TRANSACTIONS
i) Approval procedure of the normal related party transactions/connected transactions
The board of directors of Jiangsu Expressway Company Limited (the “Company”)
announced that on 25 April 2014, the Company entered into compensation
agreement for demolition of properties and equipment of Maqun Monitoring
Centre (the “Compensation Agreement”) and amendments to tenancy contract
(the “Amended Tenancy”) with Jiangsu Expressway Network Operation &
Management Co., Ltd. (the “Network Operation Company”, in which the
Company directly holds a 3.6219% interest).
Since Jiangsu Communications Holdings Company Limited (the “Communications holdings”), the controlling shareholder of the Company, directly and indirectly
holds over 30% interests in Network Operation Company, the Compensation
Agreement constitutes related party transaction/connected transaction, and the
Amended Tenancy constitutes continuing related party transaction/ continuing
connected transaction under the listing rules of Shanghai Stock Exchange and
the Rules governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited respectively, which are subject to the reporting and announcement
requirements but exempt from the independent shareholders’ approval in general
meeting requirement.
The directors of the Company (save for directors Mr. Yang Gen Lin, Mr.
Chen Xiang Hui, Mr. Du Wen Yi and Mr. Qian Yong Xiang (being connected
directors) who had abstained from voting on the resolution) voted for the entering
into of the transactions and considered that the terms of the transactions are
fair and reasonable and in the interests of the shareholders as a whole. All four
independent non-executive directors had voted for the connected transactions.
The transactions do not require approval from other authorities.
ii) Estimated expense and actual expense incurred in the last daily related party transaction/connected transaction.
For the year ended 31 December 2013, the rental actually paid to the Company
by Network Operation Company was RMB 10,406,700.
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iii) Estimated amount and categories of the daily related party transaction/connected transaction
Amended Tenancy Compensation Agreement
Parties • The Company (as landlord)
• Network Operation Company
(as tenant)
• The Company (as indemnitee)
• Network Operation Company
(as indemniter)
Term and effective
date of contract
1 May 2014 to 30 April 2017 25 April 2014
Premise Maqun Monitoring Centre at
No. 189 Maqun New Street, Nanjing,
with a site area of 90 Chinese acres
and floor area of 4,024 square meters
Wings of Maqun Monitoring Centre,
including canteen, dormitory,
gate house and reception hall for
ETC costumers, with gross area
of 2205.06 square meters,
will be demolished
Amount RMB 3,612,400
(approximately HKD4,548,533.7)
RMB 7,503,200
(approximately HKD9,447,613.3)
The rental, which is determined with
reference to investment recovery principal
and taxation concerned, has been audited
and confirmed by
Jiangsu Yongcheng Accountant Firm.
The compensation fee has been appraised
and confirmed by Beijing Northern Yashi
Assets Appraisal Co, Ltd. Appointed
by the Company.
Payment method • The annual rental of RMB 3,612,400
shall be paid to the landlord in
lump sum by 31 July of every year.
• RMB 7,503,200 shall be paid
to the Company in lump sum.
During the term of the tenancy, a daily penalty of 0.01% of the outstanding rental shall
be payable by the tenant to the Company if it fails to make payment in accordance
with the terms of the Tenancy Contract.
Renewal If the tenant would like to renew the tenancy, it should notify the Company three
months prior to the expiration of the tenancy. The rental shall be adjusted based on
the then prevailing market situation and subject to negotiation of the parties.
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II. CONNECTED PERSON AND RELATIONShIP
jiangsu Expressway Company Limited
Registered office: No. 6 Xianlin Road, Nanjing, Jiangsu Province, the
PRC
Business nature: Joint stock limited company
Legal representative: Mr. Yang Gen Lin
Registered capital: RMB5,037,747,500
Principal business: Construction, management, maintenance, toll collection
of expressways and toll roads in Jiangsu Province
Total assets as at last financial
period: (as at 31 December 2013)
RMB 26,833,912,000 (according PRC Accounting
Standards)
Net assets as at last financial period:
(as at 31 December 2013)
RMB 19,596,484,000 (according PRC Accounting
Standards)
Operating income of the last financial
period: (for the year 2013)
RMB 7,614,227,000 (according PRC Accounting
Standards)
Net profits of the last financial
period: (for the year 2013)
RMB 2,707,743,000 (according PRC Accounting
Standards)
jiangsu Expressway Network Operation & Management Co., Ltd.
Registered office: No. 189 Maqun New Street, Nanjing, Jiangsu Province,
the PRC
Business nature: Limited liability company
Legal representative: Mr. Chen Xiang Hui
Registered capital: RMB 144,400,000
Principal business: Provision of technical services for expressway inter-
networked toll collection
Total assets as at last financial
period: (as at 31 December 2013)
RMB 1,322,225,000 (according PRC Accounting
Standards)
Net assets as at last financial period:
(as at 31 December 2013)
RMB 164,707,000 (according PRC Accounting
Standards)
Operating income of the last financial
period: (for the year 2013)
RMB 138,671,000 (according PRC Accounting
Standards)
Net profits of the last financial
period: (for the year 2013)
RMB 7,506,000 (according PRC Accounting Standards)
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III. MAjOR TERMS OF ThE CONNECTED TRANSACTIONS AND bASIS OF DETERMINATION OF CONSIDERATION
i) Compensation Agreement
Maqun Monitoring Centre, which is located at 189 Maqun New Street of Nanjing
and opened in 2008, has been rented to Network Operation Company. In light of
the demand by the operation and management of Network Operation Company,
the layout of Maqun Monitoring Centre will be adjusted. The wings of Maqun
Monitoring Centre and equipment installed thereof, with gross area of 2,205.06
square meters, will be demolished after negotiation with the Company. The net
book value of the assets subject to demolition as of 31 December 2013 (the
evaluation date) is approximately RMB 5,856,900.
The compensation for properties and equipment subject to demolition is
determined as below:
1. It is agreed that Beijing Northern Yashi Assets Appraisal Co, Ltd. shall
be engaged by the Company to value the properties and equipment subject
to demolition under the requirements of laws and regulations. Pursuant to
the valuation report (Northern Yashi Pingbaozi [2014] No. 01-065) issued
by Beijing Northern Yashi Assets Appraisal Co, Ltd, the properties and
equipment of Maqun Monitoring Centre subject to demolition are valued at
RMB 6,258,100 as at 31 December 2013, which is the evaluation date.
2. The valuation of properties and equipment of Maqun Monitoring Centre
subject to demolition at RMB 6,258,100 and the tax payable under the
transaction at RMB 1,245,100, which is RMB 7,503,200 in aggregate (tax
inclusive) will be paid by Network Operation Company. Thus Network
Operation Company shall pay the Company a compensation of RMB
7,503,200 in lump sum.
Payment method of compensation:
The compensation for the properties and equipment to be demolished of RMB
7,503,200 shall be paid by the tenant to an account designated by the landlord
in a lump sum within 10 working days after execution of the Compensation
Agreement.
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ii) Amended Tenancy
The premises subject to the original tenancy contract are located at No. 189
Maqun New Street, Nanjing with a site area of 90 Chinese acres and floor area of
6,229 square meters. The gross area of properties and plants subject to demolition
is 2,205 square meters, thus the gross area of the remaining premises is 4,024
square meters. The remaining part of the premises will be continuously rented to
the tenant as office.
The term of tenancy are amended to 1 May 2014 to 30 April 2017.
The rental and payment are amended as below:
1. The original annual rental was RMB 4,460,00, and the rental for the year
of 2013 has been paid by 31 October 2013. The rental for the period from
1 January 2014 to 30 April 2014 (approximately RMB 1,486,700) are still
outstanding for settlement.
2. As the area of premises subject to tenancy has changed and Compensation
Agreement has been entered into by both parties, the annual rental for the
remaining land and premises is adjusted to RMB 3,612,400 (tax inclusive).
3. The payment of rental has been amended as: the rental for the period from 1
January 2014 to 30 April 2014 of RMB1,486,700 shall be paid by the tenant
to the account designated by the landlord in a lump sum within one month
after the effective date of Amended Tenancy. The annual rental for the
period from 1 May 2014 to 30 April 2015 of RMB 3,612,400 shall be paid
by 31 July of this year to the landlord. The subsequent annual rental of RMB
3,612,400 shall be paid by the tenant to the landlord in a lump sum by 31
July of every contract year.
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IV. PURPOSE OF ThE TRANSACTIONS AND ThE EFFECT TO ThE COMPANY
Maqun Monitoring Centre has been rented to Network Operation Company as office
since 2008. In light of the demand by the operation and management of Network
Operation Company, the layout of Maqun Monitoring Centre will be adjusted and part
of the properties and equipment shall be demolished. After negotiation, the Company
agreed that the wings of Maqun Monitoring Centre, including canteen, dormitory,
gate house and reception hall for ETC costumers, with gross area of 2,205.06 square
meters, will be demolished. Pursuant to the evaluation report of Beijing Northern
Yashi Assets Appraisal Co, Ltd., the valuation of properties and equipment of Maqun
Monitoring Centre subject to demolition at RMB 6,258,100 and the tax payable
under the transaction at RMB 1,245,100, which is RMB 7,503,200 in aggregate (tax
inclusive) will be paid by Network Operation Company as compensation. As the area
of premises subject to tenancy has changed, an amended tenancy has been entered into
by both parties. The Company is of the view that the determination of rental under
Amended Tenancy is reasonable, thus the entering into of the Amended Tenancy is
expected to have no adverse impact on the Company. In addition, the Company is of
the view that the Compensation Agreement is reasonable as the compensation under
the Compensation Agreement entered into by the Company and Network Operation
Company is determined with reference to the evaluation report issued by Beijing
Northern Yashi Assets Appraisal Co, Ltd. and the relevant tax, which is expected to
have no adverse impact on the Company.
V. OPINION OF ThE INDEPENDENT NON-ExECUTIVE DIRECTORS
The independent non-executive directors of the Company are of the view that the
entering into of the transactions are in the interests of the shareholders of the Company
as a whole and in the ordinary and usual course of business of the Company, and the
terms of the transactions are on normal commercial terms and are fair and reasonable.
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VI. DOCUMENTS AVAILAbLE FOR INSPECTION
The following documents will be available for inspection by shareholders of the
Company during normal business hour at the registered office of the Company at No.
6 Xianlin Road, Nanjing, Jiangsu Province, the PRC:
1. resolutions passed on the 14th Meeting of 7th Session of the Board of Directors;
2. written approval of the transactions and independent opinion of the independent
non-executive directors prior to entering into the transactions;
3. resolutions passed on the meeting of the Supervisory Committee with signatures
of all supervisors attended; and
4. Compensation Agreement and Amended Tenancy.
Board of Directors
jiangsu Expressway Company Limited
Nanjing, the PRC, 26 April 2014
* For the purpose of this announcement, conversions of Renminbi into Hong Kong dollars are based
on the approximate exchange rate of RMB79.419= HK$100.00
As at the date of this announcement, directors of the Company are:
Yang Gen Lin, Zhang Yang, Chen Xiang Hui, Du Wen Yi, Qian Yong Xiang, Cheng Chang
Yung Tsung, Alice, Fang Hung, Kenneth, Zhang Erzhen*, Xu Chang Xin*, Gao Bo* and
Chen Donghua*
* Independent Non-executive Directors