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Glorious Property
Annual Report 2011
Report of the Directors
(Continued)
Connected Transactions (Continued)
(B) CONTINUING CONNECTED TRANSACTIONS
Shanghai Ditong entered into a framework construction services agreement (the “Construction Services
Agreement”) on 9 September 2009 with the Company, pursuant to which Shanghai Ditong has agreed to provide
construction and related services to the Group according to the tender documents and the construction contracts
signed between Shanghai Ditiong and the Group from time to time. The Construction Services Agreement is
effective from the Listing Date up to 31 December 2011.
Mr. Zhang De Huang (the father of Mr. Zhang Zhi Rong, the Chairman and the indirect ultimate controlling
shareholder of the Company) holds a controlling stake in Shanghai Ditong. Therefore, Shanghai Ditong is a
connected person of the Group pursuant to Chapter 14A of the Listing Rules and the construction services provided
to the Group by Shanghai Ditong constitute continuing connected transactions of the Group.
For the year ended 31 December 2011, the annual cap for the continuing connected transactions between the
Group and Shanghai Ditong under the Construction Services Agreement is approximately RMB1,342.1 million and
the actual transacted amount was approximately RMB1,194.9 million.
In relation to the anticipated project developments of the Group where the construction company has not been
selected on the Listing Date (the “New Projects”), the Company has undertaken that the annual construction fees
payable to Shanghai Ditong will not exceed 40%, 30% and 20%, respectively, of the estimated total amounts
payable for the New Projects of the Group for each of the three years ending 31 December 2011 (the “Shanghai
Ditong Undertaking”). During the year ended 31 December 2011, the Group had entered into a number of new
construction contracts with Shanghai Ditong in respect of the New Projects, and the total amount payable to
Shanghai Ditong in respect of these new contracts for the year ended 31 December 2011 was approximately
RMB904.8 million. As the total construction fees payable to Shanghai Ditong for the year ended 31 December
2011 in respect of the New Projects is less than 20% of the total construction fees payable by the Group in respect
of the New Projects, the Group had complied with the Shanghai Ditong Undertaking for the year ended 31
December 2011.
Shanghai Ditong has renewed the Construction Services Agreement by entering into a new framework construction
services agreement (the “New Construction Services Agreement”) on 19 October 2011 with the Company,
pursuant to which Shanghai Ditong has agreed to provide construction and related services to the Group according
to the construction contracts signed or to be signed between Shanghai Ditiong and the Group from time to time.
The New Construction Services Agreement is effective for a period of three years from 1 January 2012 to 31
December 2014. The proposed annual caps for the continuing connected transactions contemplated by the New
Construction Services Agreement for the three years ending 31 December 2014 are set out as follows:
Year
RMB million
2012
1,300.0
2013
1,116.1
2014
681.2