CONNECTED TRANSACTION ESTABLISHMENT OF A JOINT VENTURE COMPANY FOR LAND DEVELOPMENT IN MENTOUGOU DISTRICT, BEIJING, PRC

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1 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. (Incorporated in the Cayman Islands with limited liability) (Stock Code: 1109) CONNECTED TRANSACTION ESTABLISHMENT OF A JOINT VENTURE COMPANY FOR LAND DEVELOPMENT IN MENTOUGOU DISTRICT, BEIJING, PRC ESTABLISHMENT OF A JOINT VENTURE FOR LAND DEVELOPMENT IN MENTOUGOU DISTRICT, BEIJING, PRC On 7 August 2014, CRL (Beijing), a 97% owned subsidiary of the Company, and Shenzhen Runxin IV entered into the Cooperation Agreement in relation to the Joint Venture to undertake the Mentougou Project. The JV Company is to develop the Mentougou Land with a floor area of approximately 29, square meters located in Mentougou District, Beijing, PRC. Pursuant to the Cooperation Agreement, the JV Company is expected to be owned as to 55% by CRL (Beijing) and 45% by Shenzhen Runxin IV. The total capital commitment to be made by CRL (Beijing) and Shenzhen Runxin IV into the JV Company is expected to be RMB2,250 million (equivalent to approximately HK$2,812.5 million), which was determined after arm s length negotiations between CRL (Beijing) and Shenzhen Runxin IV, with reference to the estimated capital requirement of developing the Mentougou Project. CRL (Beijing) and Shenzhen Runxin IV are expected to commit RMB1,237.5 million (equivalent to approximately HK$1, million) and RMB1,012.5 million (equivalent to approximately HK$1, million), respectively into the JV Company, representing their pro rata equity interest of 55% and 45% respectively in the JV Company. The capital commitments will be made by way of registered capital contribution and shareholders loans in accordance with the terms of the Cooperation Agreement. The Company will finance the capital commitments of CRL (Beijing) by its internal resources. 1

2 CONNECTED TRANSACTION EXEMPT FROM THE INDEPENDENT SHAREHOLDERS APPROVAL REQUIREMENT As at the date of this announcement, as (i) CRH is the controlling Shareholder of the Company and a wholly-owned subsidiary of CRC; (ii) CRC s subsidiary is the sole limited partner of Shenzhen Runxin IV; and (iii) CRH s wholly owned subsidiary owns 51% of the registered capital of Huawei Yongsheng, who is the fund manager and has control of Shenzhen Runxin IV by virtue of its power to make investment decisions for and on behalf of Shenzhen Runxin IV, who is in turn the owner of 45% shares of the JV Company, thus both of Shenzhen Runxin IV and the JV Company are likely to be deemed as connected persons of the Company within the meaning of the Listing Rules. As Shenzhen Runxin IV is likely to be deemed as a connected person of the Company, the Joint Venture is expected to constitute a connected transaction of the Company. As certain of the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Joint Venture (taking account of the funding requirement of the parties under the Cooperation Agreement) exceed 0.1% but are less than 5%, the Joint Venture as a connected transaction is only subject to the reporting and announcement requirements set out in Rules 14A.35, 14A.49, 14A.68 and 14A.71 of the Listing Rules, and is exempt from the circular (including independent financial advice) and the independent shareholders approval requirements of Chapter 14A of the Listing Rules. ESTABLISHMENT OF A JOINT VENTURE IN RELATION TO A PROPERTY PROJECT LOCATED IN MENTOUGOU DISTRICT, BEIJING, PRC (A) THE COOPERATION AGREEMENT On 7 August 2014, CRL (Beijing), a 97% owned subsidiary of the Company, and Shenzhen Runxin IV entered into the Cooperation Agreement in relation to the Joint Venture to undertake the Mentougou Project. The JV Company is to develop the Mentougou Land with a floor area of approximately 29, square meters located in Mentougou District, Beijing, PRC. The JV Company is expected to develop apartments, offices, LOFT, shops and car park on the Mentougou Land, which shall be subject to the final approval of the local planning authorities in Mentougou District. Date 7 August 2014 Parties (1) China Resources Land (Beijing) Limited* ( 華潤置地 ( 北京 ) 股份有限公司 ), a 97% owned subsidiary of the Company and is principally engaged in investment holding and project development; and 2

3 Ownership of the JV Company (2) Shenzhen Runxin No. 4 Investment Partnership Enterprise (Limited Partnership)* ( 深圳市潤鑫四號投資合夥企業 ( 有限合夥 )), a property project investment fund managed by Huawei Yongsheng. Huawei Yongsheng is a provider of business consultancy and management services. Pursuant to the Cooperation Agreement, the JV Company is expected to be owned as to 55% by CRL (Beijing) and 45% by Shenzhen Runxin IV. The JV Company will be regarded as a subsidiary of the Company and its financial results are expected to be consolidated into the financial statements of the Company. Registered capital of the JV Company Pursuant to the terms of the Cooperation Agreement, the registered capital of the JV Company is expected to be RMB10 million (equivalent to approximately HK$12.5 million), which are to be fully contributed within one month from the date of its incorporation. The registered capital of the JV Company will be contributed in cash by CRL (Beijing) and Shenzhen Runxin IV according to their pro rata equity interest of 55% and 45% respectively in the JV Company. Capital commitment by CRL (Beijing) and Shenzhen Runxin IV Pursuant to the Cooperation Agreement, the total commitment (including contribution to the registered capital of the JV Company) to be made by CRL (Beijing) and Shenzhen Runxin IV into the JV Company is expected to be RMB2,250 million (equivalent to approximately HK$2,812.5 million), which was determined after arm s length negotiations between CRL (Beijing) and Shenzhen Runxin IV, with reference to the estimated capital requirement of developing the Mentougou Project. CRL (Beijing) and Shenzhen Runxin IV are expected to commit RMB1,237.5 million (equivalent to approximately HK$1, million) and RMB1,012.5 million (equivalent to approximately HK$1, million) respectively into the JV Company, representing their pro rata equity interest of 55% and 45% respectively in the JV Company. The capital commitments will be made by way of registered capital contribution and shareholders loans (the Shareholders Loans ) in accordance with the terms of the Cooperation Agreement. The Company will finance the capital commitments of CRL (Beijing) by its internal resources. Management structure of the JV Company Pursuant to the Cooperation Agreement, the board of directors of the JV Company shall consist of five members, of which CRL (Beijing) is entitled to nominate three directors and Shenzhen Runxin IV is entitled to nominate two directors. The chairman of the board of directors of the JV Company, who shall also be the legal representative of the Company, shall be nominated from the three directors nominated by CRL (Beijing). The JV Company shall have one general manager and one chief financial officer, both of whom are to be appointed by the board of directors according to the recommendation of CRL (Beijing). 3

4 Scope of business of the JV Company and objective of the Joint Venture The proposed scope of business of the JV Company is real estate development and sales and property management. The JV Company will be the Joint Venture vehicle for the development of the Mentougou Project. Consultancy arrangements Pursuant to the Cooperation Agreement, within 3 months upon the full payment of the Shareholders Loans by CRL (Beijing) and Shenzhen Runxin IV, the JV Company will enter into consultancy agreements to engage CRL (Beijing) (or its affiliates) for the provision of: (i) project development management consultancy services on the development of the Mentougou Project; and (ii) consultancy services on leasing and sale of properties developed under the Mentougou Project. As the provision of such consultancy services are on normal commercial terms and the applicable percentage ratios for the annual fees payable by the JV Company under each of these two types of transactions is expected to be less than 0.1%, these continuing connected transactions are exempt from all reporting, announcement and independent shareholders approval requirements under the Listing Rules. Should the applicable percentage ratios of either of these two types of transactions are expected to exceed the 0.1% threshold in the future, the Company will re-comply with the applicable Listing Rules requirements. (B) REASONS FOR AND BENEFITS OF THE JOINT VENTURE The Joint Venture arrangement will result in Shenzhen Runxin IV sharing the development cost of the Mentougou Project, thereby sharing both the risks and financing of the project. The Group s cash flow position will benefit from a lower capital requirement to develop the Mentougou Project. Also, the Joint Venture is expected to minimize the amount of external borrowings required by the JV Company, resulting in an overall reduction in finance costs and administrative expenses. The Directors (including the independent non-executive Directors) are of the view that the Joint Venture and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole. As none of the Directors has any material interest in the Cooperation Agreement, no Directors were required to abstain from voting on the relevant board resolutions passed. (C) CONNECTED TRANSACTION EXEMPT FROM THE INDEPENDENT SHAREHOLDERS APPROVAL REQUIREMENT As at the date of this announcement, as (i) CRH is the controlling Shareholder of the Company and a wholly-owned subsidiary of CRC; (ii) CRC s subsidiary is the sole limited partner of Shenzhen Runxin IV; and (iii) CRH s wholly owned subsidiary owns 51% of the registered capital of Huawei Yongsheng, who is the fund manager and has control of Shenzhen Runxin IV by virtue of its power to make investment decisions for and on behalf of Shenzhen Runxin IV, who is in turn in the owner of 45% shares of the JV Company, thus both of Shenzhen Runxin IV and the JV Company are likely to be deemed as connected persons of the Company within the meaning of the Listing Rules. 4

5 As Shenzhen Runxin IV is likely to be deemed as a connected person of the Company, the Joint Venture is expected to constitute a connected transaction of the Company. As certain of the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Joint Venture (taking account of the funding requirement of the parties under the Cooperation Agreement) exceed 0.1% but are less than 5%, the Joint Venture as a connected transaction is only subject to the reporting and announcement requirements set out in Rules 14A.35, 14A.49, 14A.68 and 14A.71 of the Listing Rules, and is exempt from the circular (including independent financial advice) and the independent shareholders approval requirements of Chapter 14A of the Listing Rules. DEFINITIONS Board the board of Directors Company China Resources Land Limited ( 華潤置地有限公司 ), a company incorporated in the Cayman Islands with limited liability, whose Shares are listed on the Main Board of the Stock Exchange connected person(s) controlling Shareholder Cooperation Agreement CR Trust CRC has the meaning ascribed thereto in the Listing Rules has the meaning ascribed thereto in the Listing Rules the agreement dated 7 August 2014 entered into between CRL (Beijing) and Shenzhen Runxin IV for the establishment of a joint venture to undertake the Mentougou Project China Resources SZITIC Trust Co., Ltd.* ( 華潤深國投信託有限公司 ), a company established in the PRC with limited liability and is owned as to 51% by CRC, and a provider of comprehensive financial services China Resources Co., Limited* ( 華潤股份有限公司 ), a joint stock limited liability company incorporated in the PRC, which is the holding company of CRH CRH China Resources (Holdings) Company Limited ( 華潤 ( 集團 ) 有限公司 ), a company incorporated in Hong Kong with limited liability and is an investment holding company, indirectly holding 67.95% Shares in the Company as at the date of this announcement CRL (Beijing) China Resources Land (Beijing) Limited* ( 華潤置地 ( 北京 ) 股份有限公司 ), a company established in the PRC with limited liability and a 97% owned subsidiary of the Company and is principally engaged in investment holding and project development Director(s) the director(s) of the Company 5

6 Group Huawei Yongsheng HK$ Hong Kong Joint Venture JV Company Listing Rules Mentougou Land Mentougou Project PRC or China RMB Shareholder(s) Shenzhen Runxin IV the Company and its subsidiaries Huawei Yongsheng Enterprise Management Limited* ( 華威永盛企業管理有限公司 ), a company established in the PRC with limited liability and is principally a provider of business consultancy and management services Hong Kong dollar, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC the joint venture between CRL (Beijing) and Shenzhen Runxing IV for developing the Mentougou Project subject to the terms and conditions set out in, among others, the Cooperation Agreement a joint venture company established in the PRC with limited liability to undertake the Mentougou Project pursuant to the Cooperation Agreement the Rules Governing the Listing of Securities on the Stock Exchange the underlying land of the Mentougou Project located at Plot MC of the Mentougou Newtown, Mentougou District, Beijing, PRC ( 中國北京市門頭溝區的門頭溝新城 MC 號等地塊 ) with a floor area of approximately 29, square meters the mixed commercial properties on the Mentougou Land to be developed by the JV Company the People s Republic of China which, for the purpose of this announcement, excludes Hong Kong, Taiwan and the Macau Special Administrative Region of the People s Republic of China Renminbi, the lawful currency of the PRC Holder(s) of the share(s) the of the Company Shenzhen Runxin No. 4 Investment Partnership Enterprise (Limited Partnership)* ( 深圳市潤鑫四號投資合夥企業 ( 有限合夥 )), a limited partnership enterprise established in the PRC and a property project investment fund managed by Huawei Yongsheng 6

7 Stock Exchange The Stock Exchange of Hong Kong Limited % per cent For the purposes of this announcement and for illustration only, conversions of RMB into HK$ are based on the approximate exchange rate of RMB1.00 to HK$1.25. No representation is made that any amount in HK$ or RMB could have been or could be converted at the above rate or at any other rates. Hong Kong, 7 August 2014 By Order of the Board China Resources Land Limited Mr. Wu Xiangdong Chairman As at the date of this announcement, the executive directors of the Company are Mr. Wu Xiangdong (Chairman) and Mr. Tang Yong (Managing Director); the non-executive directors of the Company are Mr. Yan Biao, Mr. Wei Bin, Mr. Du Wenmin, Mr. Ding Jiemin, Mr. Huang Daoguo and Mr. Chen Ying; and the independent non-executive directors of the Company are Mr. Wang Shi, Mr. Andrew Y. Yan, Mr. Ho Hin Ngai, Bosco, Mr. Wan Kam To, Peter and Mr. Ma Weihua. * English translations of the names are provided for ease of reference only and they are not official English names of the companies and authorities concerned 7