Folangsi Co., Ltd - Proxy Solicitation & Information Statement 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in China Resources Land Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of China Resources Land Limited.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1109)

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES in relation to PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED

(2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

(3) CONNECTED TRANSACTION in relation to DISPOSAL OF A 40.0% INTEREST IN A PROPERTY PROJECT IN HANGZHOU

Financial adviser to China Resources Land Limited

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

CIMB Securities (HK) Limited

A letter from the Board is set out on pages 9 to 30 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 31 to 32 of this circular. A letter from CIMB containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 33 to 51 of this circular.

A notice convening an extraordinary general meeting of China Resources Land Limited to be held at 4th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on November 1, 2010 at 3 p.m. is set out on pages 77 to 78 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at Tricor Standard Limited, the branch share registrar of China Resources Land Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

October 13, 2010

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . .		31
Letter from CIMB . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33
Appendix I – Property valuation . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Appendix II – General information	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	70
Notice of extraordinary general meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	77

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the following meanings:

“Acquisition”
the proposed acquisition of the Sale Shares by the Company pursuant to the Sale and Purchase Agreement
“Additional Investments”
any additional new money injected into the Target Group by the Vendor (as evidenced by valid official receipts or such other supporting documents reasonably acceptable to the Company), by way of capital contribution or shareholders loans or otherwise, to cover any costs incurred in connection with the normal course of business of the Target Group, including but not limited to the Land Acquisition Costs after August 31, 2010 (being the date of the latest Management Accounts of the Target Group) up to (and inclusive of) the date of the Sale and Purchase Completion
“associate(s)”
has the meaning ascribed thereto in the Listing Rules
“Board” the board of Directors
“Business Day”
a day on which banks in Hong Kong are generally open for business (excluding a Saturday and a Sunday)
“BVI”
the British Virgin Islands
“Cash Consideration”
the portion of the Sale and Purchase Consideration in the amount of HK$2,370.42 million (subject to adjustment) payable by the Company to the Vendor in cash
“Charmlink”
Charmlink Resources Limited (卓聯資源有限公司), a company incorporated in Hong Kong with limited liability
“Charmlink Share” 1 ordinary share of HK$1 each, representing the entire issued share capital of Charmlink as at the Latest Practicable Date, which is registered in the name of and beneficially owned by Full Best

– 1 –

DEFINITIONS

“Charmlink Shareholders Loan”
“Charmlink Transfer”
“Charmlink Transfer Agreement”
“Charmlink Transfer Completion”
“Charmlink Transfer Consideration”
“Company”
“Conditions”
“connected person(s)”
“Consideration Adjustment Cap”
“Consideration Shares”
the shareholders loans advanced by Full Best to Charmlink, the aggregate principal amount of which is HK$466,659,348.60 as at the date of the signing of the Charmlink Transfer Agreement
the proposed transfer of the Charmlink Share from Full Best to Jetmax Investment pursuant to the Charmlink Transfer Agreement
the transfer agreement dated September 20, 2010 entered into between Full Best and Jetmax Investment in respect of the transfer of the Charmlink Share and the assignment of the Charmlink Shareholders Loan
completion of the Charmlink Transfer and the assignment of the Charmlink Shareholders Loan in accordance with the provisions of the Charmlink Transfer Agreement
the consideration of HK$475,377,845.30 payable by Jetmax Investment to Full Best for the Charmlink Share and the assignment of the Charmlink Shareholders Loan under the Charmlink Transfer Agreement
China Resources Land Limited (華潤置地有限公司), a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange
the conditions set out in the paragraphs headed “I. Proposed Acquisition of certain properties of China Resources (Holdings) Company Limited – Conditions precedent” under the section headed “Letter from the Board” in this circular
has the meaning ascribed thereto in the Listing Rules
the maximum adjustment of HK$200 million to the Cash Consideration pursuant to the Sale and Purchase Agreement
the 348,239,279 new Shares to be allotted and issued to the Vendor (or as it may direct) on Sale and Purchase Completion having a total cash value of HK$5,530.98 million

– 2 –

DEFINITIONS

“Construction Caps”
“Continuing Connected Transactions”
“controlling Shareholder”
“CRH”
“CRH Group”
“CRNC”
“CRNC Group”
“CR Shimei Bay Tourism Development”
“Decoration Caps”
the proposed maximum annual consideration to be paid by the members of the CRH Group and associates of CRH to the Group for each of the three financial years ending December 31, 2011, 2012 and 2013 in relation to the construction services to be rendered by the Group to the members of the CRH Group and associates of CRH
the provision of construction services and decoration services by the Group to the CRH Group and associates of CRH and the sale of furniture products by the Group to the CRH Group and associates of CRH
has the meaning ascribed thereto in the Listing Rules
華潤（集團）有限公司 (China Resources (Holdings) Company Limited), a company incorporated in Hong Kong with limited liability and is an investment holding company
CRH and its subsidiaries excluding the Group
中國華潤總公司 (China Resources National Corporation*), a state-owned enterprise established in the PRC and the ultimate holding company of the Company
CRNC and its subsidiaries excluding the Group
海南華潤石梅灣旅遊開發有限公司 (China Resources Shimei Bay Tourism Development (Hainan) Limited*), a company established in the PRC with limited liability
the proposed maximum annual consideration to be paid by the members of the CRH Group and associates of CRH to the Group for each of the three financial years ending December 31, 2011, 2012 and 2013 in relation to the decoration services to be rendered by the Group to the members of the CRH Group and associates of CRH

– 3 –

DEFINITIONS

“Deed of Indemnity”
“Directors”
“EGM”
“Fast Lead”
“Full Best”
“Furniture Caps”
“Group”
“Hangzhou Runhong Real Estate”
“HIBOR”
“HK$”
the deed of indemnity to be entered into amongst the Vendor, the Company and CRH on Sale and Purchase Completion in relation to the tax liabilities of the Target Group prior to Sale and Purchase Completion
the directors of the Company
the extraordinary general meeting of the Company to be convened and held for the purpose of considering and, if thought fit, approving the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the Continuing Connected Transactions, the Construction Caps, the Decoration Caps and the Furniture Caps
Fast Lead Investments Limited (迅領投資有限公司), a company incorporated in the BVI with limited liability and is a wholly-owned subsidiary of the Vendor as at the Latest Practicable Date
Full Best Enterprises Limited (佳滿企業有限公司), a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Company as at the Latest Practicable Date
the proposed maximum annual consideration to be paid by the members of the CRH Group and associates of CRH to the Group for each of the three financial years ending December 31, 2011, 2012 and 2013 in relation to the furniture services to be rendered by the Group to the members of the CRH Group and associates of CRH
the Company and its subsidiaries
杭州潤鴻置業有限公司 (Hangzhou Runhong Real Estate Limited*), a company established in the PRC with limited liability
the Hong Kong Interbank Offer Rate as at 11:00 a.m. (Hong Kong time) on any given quotation day for the offering of deposits in HK$
Hong Kong dollars, the lawful currency of Hong Kong from time to time

– 4 –

DEFINITIONS

“Hong Kong” or “HK”
“Independent Board Committee”
“Independent Financial Adviser” or “CIMB”
“Independent Shareholders”
“Jetmax Investment "
“Land Acquisition Costs”

the Hong Kong Special Administrative Region of the PRC

the independent board committee of the Company formed by all the independent non-executive Directors to advise the Independent Shareholders on the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, the terms of the Continuing Connected Transactions, the Construction Caps, the Decoration Caps and the Furniture Caps

CIMB Securities (HK) Limited, a licensed corporation to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) of the regulated activities as set out in Schedule 5 to the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the terms of the Continuing Connected Transactions, including the Construction Caps, the Decoration Caps and the Furniture Caps as well as on those leasing or concessionaire arrangements for retail purpose or purposes ancillary to that of not exceeding 20 years pursuant to the Leasing and Concessionaire Framework Agreement

Shareholders (other than CRH, the Vendor and their respective associates) who are not required to abstain from voting at the EGM
Jetmax Investment Limited (集明投資有限公司), a company incorporated in Hong Kong with limited liability and is an indirect wholly-owned subsidiary of Sun Hung Kai Properties
any money payable in connection with the acquisition of the ownership in and title to the properties owned by the Target Group, including but not limited to land premium, levies, imposts, other costs and expenses payable to government authority and/or third party such as relocation/settlement compensation payable to residents (individual or body corporate) of such properties

– 5 –

DEFINITIONS

“Latest Practicable Date”
October 8, 2010 being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
“Leasing and Concessionaire Framework Agreement”
the framework agreement entered into between the Company and CRH on September 20, 2010 in relation to the leasing and concessionaire arrangement between the Group and the CRH Group and associates of CRH from the date of the Leasing and Concessionaire Framework Agreement to December 31, 2012
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Management Accounts”
the unaudited combined balance sheet of the Target Group as at August 31, 2010 and the unaudited combined income statement of the Target Group for the eight months ended August 31, 2010, prepared in accordance with the Hong Kong Financial Reporting Standards
“PRC”
the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, Taiwan and the Macau Special Administrative Region of the PRC
“Project Sites”
the Hainan Shimei Bay Site (海南石梅灣項目), the Wuhan Oak Bay Site (武漢橡樹灣項目) and the Suzhou Kunshan Site (蘇州昆山項目)
“Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement”
the framework agreement entered into between the Company and CRH on September 20, 2010 in relation to the provision of construction, decoration and furniture services by the Group to the CRH Group and associates of CRH for the three financial years ending December 31, 2013
“RMB”
Renminbi, the lawful currency of the PRC from time to time
“Sale and Purchase Agreement”
the conditional sale and purchase agreement dated September 20, 2010 entered into amongst the Company, the Vendor and CRH in respect of the sale and purchase of the Sale Shares

– 6 –

DEFINITIONS

“Sale and Purchase Completion”
“Sale and Purchase Consideration”
“Sale Shares”
“SFO”
“Share Consideration”
“Share(s)”
“Shareholder(s)”
“Shareholders’ Loans”
“Shimei Bay Resort Area”
“Stock Exchange”
“Sun Hung Kai Properties”
completion of the sale and purchase of the Sale Shares in accordance with the provisions of the Sale and Purchase Agreement
the consideration of HK$7,901.40 million payable by the Company for the Sale Shares under the Sale and Purchase Agreement
two ordinary shares of US$1 each, representing the entire issued share capital of Fast Lead as at the Latest Practicable Date, which are registered in the name of and beneficially owned by the Vendor and any additional shares to be issued by Fast Lead to the Vendor on or prior to Sale and Purchase Completion (if any)
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
the amount of HK$5,530.98 million, being the portion of the Sale and Purchase Consideration excluding the Cash Consideration, which is to be satisfied by way of the allotment and issue of the Consideration Shares in accordance with the terms of the Sale and Purchase Agreement
ordinary share(s) of HK$0.10 each in the share capital of the Company
holders of the Shares
the total amount of shareholders’ loans owed by the Target Group to the CRH Group (other than those within the Target Group) which remain outstanding as at the date of the Sale and Purchase Completion
the Shimei Bay Tourism Resort Area (石梅灣旅遊度假開發區) in Hainan

The Stock Exchange of Hong Kong Limited

Sun Hung Kai Properties Limited, a company incorporated in Hong Kong with limited liability whose shares are listed on the Stock Exchange (stock code: 0016)

– 7 –

DEFINITIONS

“Target Group” Fast Lead and its subsidiaries “US$” United States dollars, the lawful currency of the United States of America from time to time “Valuer” or “CBRE” CB Richard Ellis Limited, the independent property valuer to the Company in respect of the Project Sites “Vendor” Central New Investments Limited, a company incorporated in the BVI with limited liability and is a wholly-owned subsidiary of CRH “WFOE” wholly foreign owned enterprise established in the PRC “%” per cent.

for identification purposes only

If there is any inconsistency between the Chinese name of the PRC entities mentioned in this circular and their English translation, the Chinese version shall prevail.

For the purposes of this circular and illustration only, conversions of RMB into Hong Kong dollars are based on the approximate exchange rates of RMB1.0000 to HK$1.1450. No representation is made that any amount in HK$ or RMB could have been or could be converted at the above rates or at any other rates.

– 8 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1109)

Executive Directors: Mr. Wang Yin (Chairman) Mr. Wu Xiangdong (Managing Director)

Non-executive Directors: Mr. Jiang Wei Mr. Yan Biao Mr. Li Fuzuo Mr. Du Wenmin Mr. Ding Jiemin

Independent Non-executive Directors: Mr. Wang Shi Mr. Ho Hin Ngai, Bosco Mr. Andrew Y. Yan Mr. Wan Kam To, Peter Mr. Frederick Ma Si Hang

Registered Office: Ugland House South Church Street Post Office Box 309 George Town Grand Cayman Cayman Islands British West Indies

Head Office: Room 4301 43rd Floor China Resources Building 26 Harbour Road Wanchai Hong Kong

October 13, 2010

To the Shareholders

Dear Sir or Madam,

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES in relation to PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED

(2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

(3) CONNECTED TRANSACTION in relation to DISPOSAL OF A 40.0% INTEREST IN A PROPERTY PROJECT IN HANGZHOU

The Board announced on September 20, 2010, among other things, that:

(a) the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Company has conditionally agreed to acquire and the

– 9 –

LETTER FROM THE BOARD

Vendor has conditionally agreed to sell the Sale Shares, representing the entire issued share capital of Fast Lead for the Sale and Purchase Consideration of HK$7,901.40 million (subject to adjustment);

(b) the Company and CRH entered into the Leasing and Concessionaire Framework Agreement to govern the principal terms of the continuing connected transactions from the date of the Leasing and Concessionaire Framework Agreement to December 31, 2012;
(c) the Company and CRH entered into the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement to govern the principal terms of the relevant continuing connected transactions for the three financial years ending December 31, 2013; and
(d) Full Best and Jetmax Investment entered into the Charmlink Transfer Agreement pursuant to which Full Best has conditionally agreed to sell and Jetmax Investment has conditionally agreed to purchase the Charmlink Share, representing the entire issued share capital of Charmlink, and the Charmlink Shareholders Loan for the Charmlink Transfer Consideration of HK$475,377,845.30.

This circular provides you with, among other things, further information on the Acquisition, the Target Group, the Continuing Connected Transactions and the Charmlink Transfer, the recommendation of the Independent Board Committee, the advice of the independent financial adviser, the property valuation report on the Project Sites, the notice convening the EGM and a proxy form.

I. PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED

(A) The Sale and Purchase Agreement

Date: September 20, 2010 (after the trading hours) Parties: (1) Vendor: Central New Investments Limited, a wholly-owned subsidiary of CRH and is principally engaged in investment holding (2) Purchaser: the Company (3) Guarantor: China Resources (Holdings) Company Limited

Sale Shares

Being the entire issued share capital of Fast Lead as at the Latest Practicable Date of two ordinary shares of US$1 each registered in the name of and beneficially owned by the Vendor, and such additional shares as may have been issued by Fast Lead prior to the Sale and Purchase Completion.

– 10 –

LETTER FROM THE BOARD

Sale and Purchase Consideration

The Sale and Purchase Consideration of HK$7,901.40 million comprises the Share Consideration of HK$5,530.98 million (being the entire consideration for the Hainan Shimei Bay Site and part of the consideration for the Wuhan Oak Bay Site and the Suzhou Kunshan Site) and the Cash Consideration of HK$2,370.42 million (being the remaining consideration for the Wuhan Oak Bay Site and the Suzhou Kunshan Site).

The Cash Consideration is subject to adjustments in the event that any Additional Investments shall have been made by the Vendor by means of injection of new money by the Vendor into the Target Group (as evidenced by valid official receipts or such other supporting documents reasonably acceptable to the Company) after August 31, 2010 (being the date of the latest Management Accounts of the Target Group) up to (and inclusive of) the date of Sale and Purchase Completion by increasing the Cash Consideration by an amount equivalent to such Additional Investments made by the Vendor. Such adjustment shall, in any event, not exceed the Consideration Adjustment Cap of HK$200.00 million. The Cash Consideration shall be satisfied by the payment of cash (subject to any adjustment up to the Consideration Adjustment Cap) payable in two instalments, with HK$1,500.00 million to be paid on or before December 10, 2010 and the remaining portion of HK$870.42 million to be paid on or before March 31, 2011. While such amount shall remain outstanding, interest shall accrue on a daily basis from the date of Sale and Purchase Completion at the rate of 150 basis points above HIBOR.

The Share Consideration shall be satisfied by way of the allotment and issue of the Consideration Shares on the date of the Sale and Purchase Completion.

Conditions precedent

Sale and Purchase Completion is subject to the conditions that:

(1) the Independent Shareholders having approved by way of poll at the EGM of the Sale and Purchase Agreement and the transactions contemplated thereunder including but not limited to the Acquisition by the Company of the Sale Shares, the allotment and issue of the Consideration Shares to the Vendor (or as it may direct) and, to the extent applicable, the transactions arising out of and in pursuance to the Sale and Purchase Agreement; and
(2) the listing committee of the Stock Exchange granting the listing of and permission to deal in the Consideration Shares, either unconditionally or subject only to conditions which the Vendor and the Company have no reasonable objection.

– 11 –

LETTER FROM THE BOARD

The Conditions above shall not be waived in any event.

If the Conditions have not been fulfilled by December 31, 2010 (or such other date as the parties to the Sale and Purchase Agreement may agree in writing), the Sale and Purchase Agreement shall thereupon become null and void.

Deed of Indemnity

Guarantee

CRH, at the request of the Vendor, unconditionally and irrevocably guarantees as a primary obligation to the Company the due and punctual performance and observance by the Vendor of all the Vendor’s obligations, and the punctual discharge by the Vendor of all the Vendor’s liabilities to the Company, arising under the Sale and Purchase Agreement and the Deed of Indemnity.

Sale and Purchase Completion

Sale and Purchase Completion will take place on or before the second Business Day after the Conditions have been fulfilled in accordance with the Sale and Purchase Agreement or such other date as the parties to the Sale and Purchase Agreement may agree.

– 12 –

LETTER FROM THE BOARD

CENTRAL NEW INVESTMENTS LIMITED 100% (HK)					��(��)�� China Resources Land (Wuhan) Co., Ltd. (PRC WFOE) China Resources Land (Kunshan) Limited 華潤置地(昆山)有限公司 (PRC WFOE) Wuhan Oak Bay Site Suzhou Kunshan Site 海南華潤石梅灣旅遊開發有限公司 China Resources Shimei Bay Tourism Development (Hainan) Ltd (PRC WFOE) 海南海倫酒店開發有限公司 Hainan Hailun Hotel Development Ltd. (PRC WFOE) 海南海琴酒店開發有限公司 Hainan Haiqin Hotel Development Ltd. (PRC WFOE) 海南海天酒店開發有限公司 Haitian Development (Hainan) Company Limited (PRC WFOE) 海南海居旅業有限公司 Haiju Tourism Development (Hainan) Limited (PRC WFOE) 海南海尼旅業有限公司 Haini Tourism Development (Hainan) Limited (PRC WFOE) 海南石梅灣旅遊度假區管理服務有限公司 Hainan Shimei Bay Tourism Resort Area Management Service Co., Ltd. (PRC WFOE) 海南海韵酒店開發有限公司 Hainan Haiyun Hotel Development Co., Ltd. (PRC WFOE) Hainan Shimei Bay Site 海南華昌旅遊開發有限公司 Hainan Huachang Tourism Development Ltd. (PRC subsidiary) 20% % 0 0 1 % 0 0 1 100% 100% 100% 100% 3.01% 100% 100% 100% Notes: 1. Except as otherwise specified above, Fast Lead has 100% indirect interest in the Project Sites as at the Latest Practicable Date. 2. Broken lines used in the diagram above depict indirect shareholdings in the relevant companies.	��(��)�� China Resources Land (Wuhan) Co., Ltd. (PRC WFOE) China Resources Land (Kunshan) Limited 華潤置地(昆山)有限公司 (PRC WFOE) Wuhan Oak Bay Site Suzhou Kunshan Site 海南華潤石梅灣旅遊開發有限公司 China Resources Shimei Bay Tourism Development (Hainan) Ltd (PRC WFOE) 海南海倫酒店開發有限公司 Hainan Hailun Hotel Development Ltd. (PRC WFOE) 海南海琴酒店開發有限公司 Hainan Haiqin Hotel Development Ltd. (PRC WFOE) 海南海天酒店開發有限公司 Haitian Development (Hainan) Company Limited (PRC WFOE) 海南海居旅業有限公司 Haiju Tourism Development (Hainan) Limited (PRC WFOE) 海南海尼旅業有限公司 Haini Tourism Development (Hainan) Limited (PRC WFOE) 海南石梅灣旅遊度假區管理服務有限公司 Hainan Shimei Bay Tourism Resort Area Management Service Co., Ltd. (PRC WFOE) 海南海韵酒店開發有限公司 Hainan Haiyun Hotel Development Co., Ltd. (PRC WFOE) Hainan Shimei Bay Site 海南華昌旅遊開發有限公司 Hainan Huachang Tourism Development Ltd. (PRC subsidiary) 20% % 0 0 1 % 0 0 1 100% 100% 100% 100% 3.01% 100% 100% 100% Notes: 1. Except as otherwise specified above, Fast Lead has 100% indirect interest in the Project Sites as at the Latest Practicable Date. 2. Broken lines used in the diagram above depict indirect shareholdings in the relevant companies.
				VI) 100%	��(��)�� China Resources Land (Wuhan) Co., Ltd. (PRC WFOE) China Resources Land (Kunshan) Limited 華潤置地(昆山)有限公司 (PRC WFOE) Wuhan Oak Bay Site Suzhou Kunshan Site 海南華潤石梅灣旅遊開發有限公司 China Resources Shimei Bay Tourism Development (Hainan) Ltd (PRC WFOE) 海南海倫酒店開發有限公司 Hainan Hailun Hotel Development Ltd. (PRC WFOE) 海南海琴酒店開發有限公司 Hainan Haiqin Hotel Development Ltd. (PRC WFOE) 海南海天酒店開發有限公司 Haitian Development (Hainan) Company Limited (PRC WFOE) 海南海居旅業有限公司 Haiju Tourism Development (Hainan) Limited (PRC WFOE) 海南海尼旅業有限公司 Haini Tourism Development (Hainan) Limited (PRC WFOE) 海南石梅灣旅遊度假區管理服務有限公司 Hainan Shimei Bay Tourism Resort Area Management Service Co., Ltd. (PRC WFOE) 海南海韵酒店開發有限公司 Hainan Haiyun Hotel Development Co., Ltd. (PRC WFOE) Hainan Shimei Bay Site 海南華昌旅遊開發有限公司 Hainan Huachang Tourism Development Ltd. (PRC subsidiary) 20% % 0 0 1 % 0 0 1 100% 100% 100% 100% 3.01% 100% 100% 100%

CENTRAL NEW INVESTMENTS LIMITED	有限公司 VI)	100%	FAST LEAD INVESTMENTS LIMITED 迅領投資有限公司	VI)
	正新投資 (B			(B


						��(��)�� China Resources Land (Wuhan) Co., Ltd. (PRC WFOE)

– 13 –

LETTER FROM THE BOARD

Set out below are certain unaudited combined financial information of the Target Group for each of the two financial years ended December 31, 2009, prepared in accordance with the Hong Kong Financial Reporting Standards:

		For the year ended	For the year ended
		December 31, 2008	December 31, 2009
		Approximate	Approximate
		RMB’ million	RMB’ million
		(equivalent to	(equivalent to
		approximate	approximate
		HK$’ million)	HK$’ million)
Loss	before taxation	52.69	95.55
		(60.33)	(109.40)
Loss	attributable to shareholders	52.13	95.46
of	Fast Lead	(59.69)	(109.30)

As at August 31, 2010, the unaudited combined net book value of the Target Group was approximately HK$3,685.10 million. As at the Latest Practicable Date, the total amount of the Shareholders’ Loans owed by the Target Group to the CRH Group (other than those within the Target Group) was approximately HK$1,036.82 million. The Shareholders’ Loans are unsecured. The Shareholders’ Loans shall be repaid within seven Business Days after Sale and Purchase Completion and no interest is payable on the same pending repayment within the said period.

Hainan Shimei Bay Site ( 海南石梅灣項目 )

The Hainan Shimei Bay Site is located at Wanning City in the eastern part of Hainan Province. It is approximately 160 kilometres from Haikou, 90 kilometres from Sanya and 12 kilometres from Xinglong. The resort area has a planned site area of approximately 6.83 million square metres, of which approximately 1.21 million square metres are to be used for residential purposes, 1.83 million square metres for hotels and other commercial purposes, 821,000 square metres for road and open square, and 60,000 square metres for public facilities. The remaining area of approximately 2.91 million square metres is for park and green zone.

Currently, land use rights certificates for land of approximately 3.10 million square metres have been issued. Approximately 10 kilometres of roads have been constructed in the area, with infrastructure including facilities for water and electricity supply, anti-flooding and sewage treatment. The Le Meridien Hotel, a catering supply centre and temporary office space have also been built and are in operation in the area, while a supporting base, a yacht club and a helicopter pad are in the process of construction. Construction for the first phase of the residential project is scheduled to commence in the fourth quarter of this year.

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LETTER FROM THE BOARD

Subject to the Sale and Purchase Completion, the Company plans to continue to acquire further land use rights in the Shimei Bay Resort Area. In accordance with the Master Planning of Shimei Bay Tourism Resort Area revised in 2008, the total developable construction site area within the Shimei Bay Resort Area is approximately 5.31 million square metres, of which approximately 2.77 million square metres are with land use rights certificates in place. With respect to the remaining land area of approximately 2.54 million square metres of the Shimei Bay Resort Area, the Company believes that it is well positioned to take advantages of any release of the remaining land in the region on the following grounds:

CR Shimei Bay Tourism Development, being the main developer, possesses a dominating position throughout the planning and development stage in the Shimei Bay Resort Area. It has competitive advantages in various aspects such as planning, regional management and liaison with different government authorities; and
CR Shimei Bay Tourism Development has completed its own master planning of the Shimei Bay Resort Area. It has completed the construction of networks for main roads and utilities, and is in the course of assisting the relocation of existing villages, within the region.

In addition, CR Shimei Bay Tourism Development has also acquired fragmentary site area of approximately 323,295 square metres on the fringe of the Shimei Bay Resort Area.

Wuhan Oak Bay Site ( 武漢橡樹灣項目 )

The Wuhan Oak Bay Site is located at Tieji Road, Wuchang District in the city center of Wuhan City. The total site area is approximately 196,019 square metres (including approximately 190,269 square metres for project development and approximately 5,750 square metres for public roads), and the total gross floor area (including that underground) is approximately 583,463 square metres.

The site is surrounded by the Changjiang second bridge and the Changjiang ErQi main bridge. It has a rare 480-metre wide view of the river. On the south of the site is Tieji Road with planned roads on the north. The Guomian second factory dormitory area rests on its east and the Wujiu railway on its west.

The site is expected to be developed in three phases and will mainly consist of high-rise residence. There will also be medium-rise residence and ancillary facilities including club houses, primary schools, kindergartens and a commercial complex. In the first phase, seven blocks of 33-storey residence are planned to be built, and the pre-sale of these units is scheduled to commence in the fourth quarter of this year.

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LETTER FROM THE BOARD

Suzhou Kunshan Site ( 蘇州昆山項目 )

The Suzhou Kunshan Site is situated in the center of Suzhou city, east of Hongqiao Road. It is surrounded by the Miaojing river, the Zhangjia river and the Yehe river and is opposite to the Yufeng Mountain, the highest mountain in Kunshan. Immediately adjacent to the site is the Tinglin Garden, a historical spot which is the largest forest park in the Huadong region.

The project has a total site area of approximately 259,988 square metres with a plot ratio of 1.1 and a total gross floor area of approximately 285,986 square metres. The project is positioned as “a low-density high-end residence in the city centre”. The development is planned to consist of 190 low-density water-front houses and 900 low-rise mansion residence.

The design of this project has made full use of the natural mountain and water view sceneries and has made reference to the planning of the Palm Islands and the residential development of the water village in the Jiangnan region. It is expected to become a real estate showcase in Kunshan City.

The construction work of the first phase of the site is scheduled to commence in October 2010 and be completed in 2012.

(C) Basis of the Sale and Purchase Consideration

The Sale and Purchase Consideration, being HK$7,901.40 million, has been arrived at after arm’s length negotiations between the Company and the Vendor and was determined with reference to, among other things, the Vendor’s attributable interest in the unaudited adjusted combined net asset value of the Target Group as at August 31, 2010 of approximately HK$8,875.20 million which is derived from the sum of (i) the Vendor’s attributable interest in the combined net book value of the Target Group per the Management Accounts as at August 31, 2010 of approximately HK$3,685.10 million; and (ii) increase in value of the Project Sites of approximately HK$5,190.10 million, being the difference between the appraised value of the Project Sites and the net book value of the Project Sites as at August 31, 2010, net of deferred taxation. The Sale and Purchase Consideration represents a discount of approximately 11.0% to the adjusted combined net asset value of the Target Group as at August 31, 2010. The Sale and Purchase Consideration is approximately 34.0% above the total investment costs (including accrued finance cost) of the Target Group made by the CRH Group of approximately HK$5,895.00 million.

The Directors (excluding the independent non-executive Directors whose opinion has been set out in the “Letter from the Independent Board Committee”) consider that the basis of the Sale and Purchase Consideration is fair and reasonable, and the settlement of the Sale and Purchase Consideration by cash and the allotment and issue of the Consideration Shares is beneficial to the Company and the Shareholders as a whole.

The appraised value of the Project Sites as at August 31, 2010 is prepared by the Valuer, an independent property valuer (not being connected with the Company

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LETTER FROM THE BOARD

or any of its connected persons) based on a direct comparison approach (that is, by reference to comparable sales evidence available in the relevant market). Please refer to appendix I to this circular for the valuation report on the Project Sites prepared by the Valuer.

(D) Consideration Shares

(a) a discount of approximately 6.7% from HK$17.02, being the closing price of the Shares on the last trading day prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(b) a discount of approximately 4.0% from HK$16.54, being the approximate average closing price on the Shares for the five trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(c) a discount of approximately 2.0% from HK$16.20, being the approximate average closing price of the Shares for the ten trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(d) a premium of approximately 1.9% from HK$15.59, being the approximate average closing price of the Shares for the thirty trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange; and
(e) a discount of approximately 1.7% from HK$16.16, being the closing price of the Shares on the Latest Practicable Date, as quoted on the Stock Exchange.

The Consideration Shares, when issued, will be credited as fully paid up, free from all encumbrances and rank pari passu in all respects with the Shares in issue at the time of allotment and issue of the Consideration Shares. Given that the Acquisition constitutes a connected transaction of the Company of which Independent Shareholders’ approval is required, instead of utilizing the general mandate granted by the Shareholders on 1 June 2010 for the allotment and issue of Shares (which allows the Directors to allot and issue up to a total of 1,007,286,734 Shares and the Directors confirm that none of such mandate has been utilised up to the Latest Practicable Date), specific approval of the Independent Shareholders will be sought for the allotment and issue of the Consideration Shares. An application has been made to the Listing Committee of the Stock Exchange for the granting of listing of and permission to deal in the Consideration Shares.

The Directors (excluding the independent non-executive Directors whose opinion has been set out in the “Letter from the Independent Board Committee”)

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consider that the terms of the Consideration Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The following table sets out the simplified shareholding of the Company as at the Latest Practicable Date and immediately upon Sale and Purchase Completion:

Shareholders CRH The Directors_(Note 3)_ Public Total	No. of Shares as at the Latest Practicable Date 3,173,403,240 (Note 1) 10,533,000 1,854,542,428 5,038,478,668	Shareholding percentage as at the Latest Practicable Date 62.98% 0.21% 36.81% 100.00%	No. of Shares immediately upon Sale and Purchase Completion (Note 4) 3,521,642,519 (Note 2) 10,533,000 1,854,542,428 5,386,717,947	Shareholding percentage immediately upon Sale and Purchase Completion (Note 5) 65.38% 0.19% 34.43%
				100.00%

Notes:

(1) Gain Ahead Group Limited and Commotra Company Limited directly hold 3,173,401,240 and 2,000 Shares respectively and each of them is a wholly-owned subsidiary of CRH. CRH is a wholly-owned subsidiary of CRC Bluesky Limited. CRC Bluesky Limited is a wholly-owned subsidiary of China Resources Co., Limited which in turn is 99.98% owned by CRNC.
(2) The interest of CRH in the Company upon the issue of the Consideration Shares represents its indirect interest held through Gain Ahead Group Limited, Commotra Company Limited and the Vendor (or as it may direct) in the Company. The Vendor is a wholly-owned subsidiary of CRH. Specific approval of the Independent Shareholders will be sought for the allotment and issue of the Consideration Shares.
(3) The Directors comprise Mr. Wang Yin, Mr. Wu Xiangdong, Mr. Jiang Wei, Mr. Yan Biao, Mr. Li Fuzuo and Mr. Du Wenmin. Such Directors who are also Shareholders will be entitled to vote at the EGM on the basis that neither any of them nor any of their respective associates is a party to the Sale and Purchase Agreement, the Continuing Connected Transactions or any other transactions subject to approval of the Independent Shareholders at the EGM.
(4) Assuming there is no acquisition and/or disposal of Shares from the Latest Practicable Date up to the date of the Sale and Purchase Completion.
(5) As of the Latest Practicable Date, a total of 12,895,000 employee options are outstanding. Assuming full exercise of such options on or before the date of Sale and Purchase Completion, CRH, the Directors and the public will hold approximately 65.22%, 0.20% and 34.58% of the then enlarged issued share capital of the Company after the issue of the consideration shares. Other than the said options, there are no outstanding securities issued by the Company as of the Latest Practicable Date which are convertible into Shares.

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LETTER FROM THE BOARD

(E) Reasons for and benefits of the Acquisition

The principal business activity of the Group is property investment, development and management in the PRC.

The Directors believe that the Acquisition represents an excellent opportunity for the Group to increase its land bank in Hainan, Wuhan and Suzhou. The increase in land bank in such provinces and cities is strategically important to the long-term development of the Group as the Directors believe that the demand for high quality properties in these locations will keep on increasing as a result of their continuous improving economic condition. Following the Acquisition, the land bank of the Group (in terms of total gross floor area) will be increased by approximately 1.84 million square metres.

Upon Sale and Purchase Completion, Fast Lead will become a wholly-owned subsidiary of the Company and, accordingly, the financial results of Fast Lead will be consolidated into the financial statements of the Company. The Directors consider that immediately upon Sale and Purchase Completion, the Acquisition will not have material impact on the Group’s total assets, liabilities and results.

The Directors (excluding the independent non-executive Directors whose opinion has been set out in the “Letter from the Independent Board Committee”) are of the view that (a) the Sale and Purchase Agreement is on normal commercial terms which are fair and reasonable and in the interests of the Company and the Shareholders as a whole; and (b) the Shareholders’ Loans were provided on terms which are more favorable than normal commercial terms for the benefit of the Target Group as they are unsecured.

(F) Financial effects of the Acquisition

Net book value

The Sale and Purchase Consideration of approximately HK$7,901.40 million represents a discount of approximately 11.0% to the unaudited adjusted combined net asset value of the Target Group of approximately HK$8,875.20 million as at August 31, 2010. As both the Group and the Target Group are under the common control of CRNC and pursuant to the current accounting policy adopted by the Group, the Acquisition will be accounted for based on the principles of merger accounting in accordance with Accounting Guideline 5 “Merger Accounting for Common Control Combination” issued by the Hong Kong Institute of Certified Public Accountants and the net assets of the Group and the Target Group will be consolidated using the existing book values. Adjustments to eliminate share capital of the Target Group against the historical investment cost in the Target Group will be made to merger reserve in the consolidated statement of changes in equity of the Group. As at August 31, 2010, the consolidated book value (the “NBV”) of the Target Group amounted to HK$3,685.10 million. Under merger accounting, the Group will record an increase of HK$1,314.68

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LETTER FROM THE BOARD

million (being the amount of the NBV of the Target Group reduced by the amount of the Cash Consideration of HK$2,370.42 million) in its consolidated NBV or shareholders’ equity in the Company as a result of the Acquisition. The actual increase in NBV of the Group is subject to the consolidated NBV of the Target Group at Sale and Purchase Completion and audit.

Based on the enhancement in NBV of approximately HK$1,314.68 million as discussed above and the 5,386,717,947 Shares to be in issue immediately upon Sale and Purchase Completion, the NBV per Share immediately upon Sale and Purchase Completion is approximately HK$7.85. This represents a 3.44% decrease to the NBV per Share of the Group prior to the Sale and Purchase Completion of approximately HK$8.13, based on the unaudited consolidated NBV of the Group attributable to Shareholders of the Company of approximately HK$40,984.13 million and 5,038,478,668 Shares in issue as at the Latest Practicable Date, as a result of the issue of new shares for this transaction.

Earnings

The Group had an audited consolidated net profit after taxation attributable to the Shareholders of the Company for the year ended December 31, 2009 of approximately HK$4,408.91 million. Upon the Sale and Purchase Completion, Fast Lead will become a wholly-owned subsidiary of the Company and, accordingly, the financial results of the Target Group will be consolidated into the financial statements of the Group. Given that majority of the Project Sites is either under development or held for future development (apart from the Le Meridien Hotel in Hainan Shimei Bay Site, which has been in operation and incurred insignificant losses for the year ended 31 December 2009 and six months ended 30 June 2010 as compared to that of the Group), they will start to contribute to both the revenue and the earning to the Group once the Project Sites are launched to the market starting from year 2011.

It is anticipated that there will not be any significant effect on the consolidated profit and loss account of the Group resulting from the Acquisition immediately upon Sale and Purchase Completion.

Working capital

The Sale and Purchase Consideration of HK$7,901.40 million will be satisfied by the Share Consideration of HK$5,530.98 million and the Cash Consideration of HK$2,370.42 million, which will be satisfied from the internal resources of the Group. Based on the cash and cash equivalents of the Group of approximately HK$15,471.80 million as at June 30, 2010, the Directors are of the view that the settlement of the Cash Consideration will not have any material adverse impact on the working capital of the Group immediately following Sale and Purchase Completion.

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LETTER FROM THE BOARD

(G) Listing Rules Implications

As at the Latest Practicable Date, the Vendor is a wholly-owned subsidiary of CRH which is the controlling Shareholder. As such, the Vendor and CRH are both connected persons of the Company within the meaning of the Listing Rules and therefore, the entering into of the Sale and Purchase Agreement constitutes a connected transaction of the Company. As certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Acquisition exceed 5.0%, the Acquisition as a connected transaction is subject to the reporting, announcement and Independent Shareholders’ approval requirements set out in Chapter 14A of the Listing Rules. Further, based on the relevant percentage ratios calculations under the Listing Rules, the Acquisition also constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

In relation to the Shareholders’ Loans, given they were provided on terms which are more favorable than normal commercial terms for the benefit of the Target Group where no security over the assets of the Target Group is granted in respect of the Shareholders’ Loans, pursuant to Rule 14A.65(4) of the Listing Rules, such financial assistance is exempted from the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

II. RENEWAL OF CERTAIN CONTINUING CONNECTED TRANSACTIONS

(A) The Leasing and Concessionaire Framework Agreement

The Group has been, during the normal course of its businesses, entering into leasing and concessionaire arrangements regarding its property portfolio where members of the Group lease premises to members of the CRNC Group. Details of the continuing connected transactions have been disclosed in the Company’s announcement dated December 8, 2008.

As the Group anticipates these continuing connected transactions will continue, and duration of certain leasing and concessionaire arrangements are expected to be longer than those under the previous arrangements, on September 20, 2010, the Company and CRH, a member of the CRNC Group, has entered into the Leasing and Concessionaire Framework Agreement to govern the principal terms of these continuing connected transactions from the date of the Leasing and Concessionaire Framework Agreement to December 31, 2012.

The Leasing and Concessionaire Framework Agreement

Date: September 20, 2010 Parties: the Company and CRH

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LETTER FROM THE BOARD

Subject to further definitive written agreements, from the date of the Leasing and Concessionaire Framework Agreement to December 31, 2012, the Group will enter into new leasing agreements or new concessionaire agreements with members of the CRH Group (including associates of CRH) in the ordinary and usual course of business on the following terms:

(a) each of the leasing or concessionaire arrangements to be entered into by a member of the Group with a member of the CRH Group or an associate of CRH will be documented in a separate written agreement with a lease term of not exceeding twenty years (for retail purposes or purposes ancillary to retail purposes) or three years (for any other purposes); and
(b) each leasing or concessionaire arrangement will be entered into on normal commercial terms with the rents, management fees and other charges received by the Group from any members of the CRH Group or associates of CRH being either at market prices or at prices no less favourable to the Group than those available from independent third parties.

Reasons for and benefits of the transactions

The Group owns a portfolio of properties which includes Shenzhen City Crossing, Shanghai CR Times Square, China Resources Building in Beijing, Hangzhou MIXc Phase I and other properties in various cities in the PRC. These properties are offered to the general public for leasing or concessionaire arrangements. Members of the CRH Group and associates of CRH are engaged in various businesses including manufacture and distribution of daily consumer goods as well as retail, investments and operation in infrastructure and public utilities projects. They have needs to lease properties, mainly office and retail outlet premises for their operations. The payments of the leasing or concessionaire arrangements are expected to be settled by way of cash on a monthly basis. The Directors, including the independent non-executive Directors, consider that the leasing and concessionaire arrangements to be entered into according to the framework terms mentioned above are in the usual and ordinary course of businesses of the Group and on normal commercial terms and the terms of these leasing and concessionaire arrangements are fair and reasonable and in the interests of the Company and the Shareholders as a whole. In particular, the Directors are of the view that it is normal and customary for retail chain stores or retail department store operators to enter into long leases with landlords to ensure a smooth operation and enable the stores or the operators to maximise the potential return on their investments. The Directors also confirm that they have no material interests in the arrangements to be contemplated under the Leasing and Concessionaire Framework Agreement.

Listing Rules implications

As required by Rule 14A.35 of the Listing Rules, the period for non-exempt continuing connected transactions must not exceed three years,

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LETTER FROM THE BOARD

except in special circumstances which are limited to cases where the nature of the transaction requires the contract to be of a duration longer than three years.

CIMB has been appointed by the Board as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on, among other things, whether it is normal business practice for the duration of leasing for retail purposes or purposes ancillary to retail purposes under the Leasing and Concessionaire Framework Agreement to be over three years. To form the assessment, CIMB has made references to, so far as it is aware of, the following companies listed on the Stock Exchange whose principal businesses are engaged in the operation of department stores and retail chain stores (the “ Comparables ”). Given the similar nature in terms of the retail leasing under the Leasing and Concessionaire Framework Agreement and those of the Comparables, CIMB considers that references to the Comparables could be used in the said assessment. The table below sets out terms of the relevant store leasing agreements of the Comparables:

Name of	Duration of	Location of
comparable companies	leases (years)	the stores
New World Development	15	Hong Kong
Company Limited
New World Department	20/20	Harbin, the PRC/
Store China Limited		Tianjin, the PRC
Lifestyle International	20/15	Shanghai, the PRC/
Holdings Limited		Hong Kong
Jiahua Stores Holdings	15	Shenzhen, the PRC
Limited

Having considered:

(i) that it is normal and customary for retail chain stores or retail department store operators to enter into long leases with landlords to ensure a smooth operation and enable the stores or the operators to maximise the potential return on their investments;
(ii) the Group’s long term co-operation and business relationship with the CRH Group; and
(iii) similar leasing arrangements for long duration of retail store leasing of the Comparables;

CIMB is of the view that it is normal business practice for arrangements of this type to be of a duration longer than three years.

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LETTER FROM THE BOARD

(B) The Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement

Reference is made to the announcements of the Company dated December 3, 2007 and June 6, 2008, in relation to, among other things, continuing connected transactions between the Group and the CRH Group regarding the provision of construction and decoration services and furniture manufacturing and sale in the PRC by the Group. Construction services provided by the Group include building construction, mechanical and electrical engineering and installation as well as urban utilities. Decoration services provided by the Group include interior design, decoration and furnishing of offices, commercial and residential properties. Furniture services provided by the Group include furniture manufacturing and sale.

It is expected that the Company, through its subsidiaries and in their ordinary course of business, will continue to provide construction and decoration services and sell furniture to the CRH Group and associates of CRH. On September 20, 2010, the Company and CRH entered into the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement to govern the principal terms of these continuing connected transactions for the three financial years ending December 31, 2013 which include, among others, that each contract of construction, decoration or furniture services will be entered into on normal commercial terms and the prices will be either at market prices or at prices no less favourable to the Group than those available from independent third parties.

Since the businesses of the provision of construction services, the provision of decoration services and the provision of furniture services are different (though related) in nature, three different sets of proposed annual caps are set for such businesses. Such proposed annual caps for the three years ending December 31, 2013 are as follows:

The Construction Caps

For the year ending	For the year ending	For the year ending
December 31, 2011	December 31, 2012	December 31, 2013
RMB’million	RMB’million	RMB’million
(equivalent to	(equivalent to	(equivalent to
approximately	approximately	approximately
HK$’ million)	HK$’ million)	HK$’ million)
1,620	1,650	1,800
(1,855)	(1,889)	(2,061)

The Construction Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; and (iii) the anticipated demand for construction services of the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented from 2011 to 2013.

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LETTER FROM THE BOARD

The Decoration Caps

For the year ending	For the year ending	For the year ending
December 31, 2011	December 31, 2012	December 31, 2013
RMB’million	RMB’million	RMB’million
(equivalent to	(equivalent to	(equivalent to
approximately	approximately	approximately
HK$’ million)	HK$’ million)	HK$’ million)
390	400	410
(447)	(458)	(469)

The Decoration Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; (iii) the anticipated growth and development of businesses of the CRH Group and associates of CRH; and (iv) the anticipated demand for decoration services by the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented from 2011 to 2013.

The Furniture Caps

For the year ending For the year ending For the year ending December 31, 2011 December 31, 2012 December 31, 2013 RMB’million RMB’million RMB’million (equivalent to (equivalent to (equivalent to approximately approximately approximately HK$’ million) HK$’ million) HK$’ million) 18 18 18 (21) (21) (21)

The Furniture Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; (iii) the anticipated demand for furniture products of the CRH Group and associates of CRH on the basis of their business expansion plans to be implemented from 2011 to 2013; and (iv) potential price inflation.

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LETTER FROM THE BOARD

The aggregate values of the transactions for each of the two years ended December 31, 2009 and the six months ended June 30, 2010 were approximately RMB5,790,000, approximately RMB8,090,000 and approximately RMB1,610,000 respectively.

Reasons for and benefits of the Continuing Connected Transactions

The Directors consider that the Continuing Connected Transactions are consistent with the businesses and commercial objectives of the Group and will increase the revenue and therefore profitability of the Group and that the terms of the Continuing Connected Transactions are fair and reasonable and in the interests of the Company and the Shareholders as a whole. In addition, as the CRH Group and associates of CRH have no expertise and management resources in property construction, decoration and furniture business, the Continuing Connected Transactions allow the Group to provide the construction, decoration and furniture services to the CRH Group and associates of CRH in the ordinary course of business.

Listing Rules implications

As one or more of the applicable percentage ratios of the Company for the annual caps of the Continuing Connected Transactions are more than 5.0% and each of the applicable annual caps is higher than HK$10.00 million, the Continuing Connected Transactions therefore constitute non-exempt continuing connected transactions for the Company, and are subject to the reporting, annual review, announcement and Independent Shareholders’ approval requirements set out in Chapter 14A of the Listing Rules.

III. DISPOSAL OF A 40.0% INTEREST IN A PROPERTY PROJECT IN HANGZHOU

(A) The Charmlink Transfer Agreement

Date: September 20, 2010 (after the trading hours)

Parties: (1) Full Best Enterprises Limited, a wholly-owned subsidiary of the Company and is principally engaged in investment holding, as vendor

(2) Jetmax Investment Limited, an indirect wholly-owned subsidiary of Sun Hung Kai Properties and is principally engaged in investment holding, as purchaser

Full Best has conditionally agreed to sell and Jetmax Investment has conditionally agreed to purchase the Charmlink Share, representing the entire issued share capital of Charmlink, and the Charmlink Shareholders Loan for the Charmlink Transfer Consideration.

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LETTER FROM THE BOARD

Charmlink Share:

Being the entire issued share capital of Charmlink as at the Latest Practicable Date, being one ordinary share of HK$1 each registered in the name of and beneficially owned by Full Best.

Charmlink Transfer Consideration:

HK$475,377,845.30, comprising the consideration for (i) the Charmlink Shareholders Loan which will be assigned on a dollar-for-dollar basis; and (ii) the consideration for the Charmlink Share, is to be satisfied by cash payable within seven Business Days from the completion date of the Charmlink Transfer.

Long-stop date:

December 31, 2010, or such other date as the parties to the Charmlink Transfer Agreement may agree in writing.

(B) Information on Charmlink and Hangzhou Runhong Real Estate

As at August 31, 2010, the unaudited combined net book value of Charmlink was approximately HK$0.28 million and the shareholder’s loan of Charmlink due to Full Best was approximately HK$466.71 million, which represented the acquisition cost of the 40% interest in Hangzhou Runhong Real Estate payable by Charmlink to Full Best.

As at August 31, 2010, the unaudited net book value of Hangzhou Runhong Real Estate was approximately HK$1,165.49 million.

Set out below are certain key audited financial information on Charmlink for the period from November 26, 2007 (date of incorporation of Charmlink) to December 31, 2009, prepared in accordance with the Hong Kong Financial Reporting Standards:

Net loss before taxation HK$2,300 Net loss after taxation and extraordinary items HK$2,300

As Hangzhou Runhong Real Estate was only established on December 7, 2009, it did not record any income nor expense from its date of establishment to December 31, 2009.

Charmlink acquired Hangzhou Runhong Real Estate in 2010 and therefore the results of Hangzhou Runhong Real Estate have not been incorporated into those of Charmlink for the year ended December 31, 2009.

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Hangzhou Runhong Real Estate is held as to 60.0% by Full Best and 40.0% by Charmlink at the Latest Practicable Date. Pursuant to the Charmlink Transfer Agreement, the Company (through Full Best) and Sun Hung Kai Properties (through Jetmax Investment and in turn Charmlink) will be in joint venture for the development of a real estate project in Hangzhou via Hangzhou Runhong Real Estate. Hangzhou Runhong Real Estate currently holds parcels of land in Hangzhou with a total site area of approximately 90,640 square metres and a total gross floor area of approximately 181,280 square metres.

(C) Basis of the Charmlink Transfer Consideration

The Charmlink Transfer Consideration, being HK$475,377,845.30, has been arrived at after arm’s length negotiations between Full Best and Jetmax Investment, with reference to, among other things, the net book value of Charmlink (approximately RMB0.28 million) and Hangzhou Runhong Real Estate (approximately RMB1,168 million) and the shareholder’s loan of Charmlink due to Full Best (approximately RMB477.6 million) as at July 31, 2010.

(D) Reasons for and benefits of the Charmlink Transfer

Sun Hung Kai Properties, the holding company of Jetmax Investment Limited, is a long-term partner of the Company. The Company believes that the two projects developed by the joint ventures formed between the Company and Sun Hung Kai Properties, namely Hangzhou MIXc project and Wuxi Taihu International Community project, are remarkably successful. The Directors are of the view that the new joint venture and hence the development project undertaken by Hangzhou Runlong Real Estate will allow the Group to ride on the experience and success attained by the two joint ventures between the parties and will add synergy to the development of the project undertaken by Hangzhou Runlong Real Estate.

The Directors consider that the terms of the Charmlink Transfer are fair and reasonable and are in the interests of the Company and the Shareholders as a whole and that the Charmlink Transfer is on normal commercial term. The Directors further confirm that they have no material interests in the Charmlink Transfer.

The Company expects to recognise a gain of approximately HK$8.72 million in the account of the Group upon completion of the Charmlink Transfer, which represents the difference between (i) the net book value of Charmlink and the shareholder’s loan of Charmlink due to Full Best as at July 31, 2010; and the (ii) Charmlink Transfer Consideration. Upon completion of the Charmlink Transfer, Charmlink will cease to be a subsidiary of the Company, and the Company will no longer have any interest in Charmlink.

The Company intends to use the sale proceeds of the Charmlink Transfer as general working capital of the Group.

– 28 –

LETTER FROM THE BOARD

(E) Listing Rules implications

As at the Latest Practicable Date, Jetmax Investment is an indirect whollyowned subsidiary of Sun Hung Kai Properties, which in turn holds 40% equity interest (hence a substantial shareholder) in two subsidiaries of the Company for the development of the Hangzhou MIXc project and the Wuxi Taihu International Community project in Hangzhou and Wuxi respectively. As such, Jetmax Investment is a connected person of the Company within the meaning of the Listing Rules and therefore, the entering into of the Charmlink Transfer Agreement constitutes a connected transaction of the Company. As certain of the applicable percentage ratios stipulated under Rule 14.07 of the Listing Rules in respect of the Charmlink Transfer exceed 0.1% but are lower than 5.0%, the Charmlink Transfer as a connected transaction is only subject to the reporting and announcement requirements set out in Chapter 14A of the Listing Rules.

IV. GENERAL

The Independent Board Committee has been established to advise the Independent Shareholders in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the terms of the Continuing Connected Transactions, including the Construction Caps, the Decoration Caps and the Furniture Caps. CIMB has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in the same regard, as well as on those leasing or concessionaire arrangements for retail purpose or purposes ancillary to that of not exceeding 20 years pursuant to the Leasing and Concessionaire Framework Agreement.

Your attention is drawn to the letters from the Independent Board Committee and the Independent Financial Adviser as set out in this circular. As set out in the letter from the Independent Board Committee, members of the Independent Board Committee consider that the terms of the Sale and Purchase Agreement and the Continuing Connected Transactions are fair and reasonable as far as the Independent Shareholders are concerned and that the entering into of the Sale and Purchase Agreement and the Continuing Connected Transactions are in the interests of the Company and the Independent Shareholders as a whole. Your attention is also drawn to the appendices to this circular.

V. EXTRAORDINARY GENERAL MEETING

You will find on pages 77 to 78 of this circular a notice of the EGM to be held at 4th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on November 1, 2010 at 3 p.m. for the purpose of considering and, if thought fit, approving the Sale and Purchase Agreement and the Continuing Connected Transactions and the transactions contemplated respectively thereunder. In accordance with the Listing Rules, connected persons of the Company who have material interests in the Acquisition and the transactions contemplated under the Continuing Connected Transactions are required to abstain from voting in respect of the resolutions approving the Sale and Purchase

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LETTER FROM THE BOARD

Agreement and the Continuing Connected Transactions and the transactions contemplated respectively thereunder. As a result, each of CRH, the Vendor and their respective associates, holding in an aggregate interest of 62.98% in the Company, will abstain from voting on the aforesaid resolutions. Pursuant to Rule 13.39(4) of the Listing Rules, the resolutions relating to the Sale and Purchase Agreement and the Continuing Connected Transactions and all other transactions contemplated respectively thereby must be taken by poll at the EGM.

A form of proxy for use at the EGM is enclosed. Whether or not you intend to be present at the meeting, you are requested to complete this form of proxy in accordance with the instructions printed thereon and deposit the same at Tricor Standard Limited, the branch share registrar of the Company, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the EGM or any adjourned meeting. The completion and return of the form of proxy will not preclude you from attending and voting in person should you so wish.

Yours faithfully, for and on behalf of the Board CHINA RESOURCES LAND LIMITED WANG Yin Chairman

– 30 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation to the Independent Shareholders from the Independent Board Committee regarding the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the terms of the Continuing Connected Transactions, including the Construction Caps, the Decoration Caps and the Furniture Caps for the purpose of incorporation in this circular:

==> picture [306 x 68] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1109)

October 13, 2010

To the Independent Shareholders

Dear Sir or Madam,

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES in relation to PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED (2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders in respect of the Acquisition and the transactions contemplated under the Continuing Connected Transactions, details of which are set out in the letter from the Board in the circular dated October 13, 2010 (the “Circular”) to the Shareholders. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

Your attention is drawn to the advice of the Independent Financial Adviser in respect of the Acquisition and the transactions contemplated under the Continuing Connected Transactions as set out in the Letter from the Independent Financial Adviser in the Circular. Having taken into account the advice of the Independent Financial Adviser, we consider that the terms of the Sale and Purchase Agreement and the Continuing Connected Transactions are fair and reasonable in so far as the interests of the Independent Shareholders are concerned and that the entering into of the Sale and Purchase Agreement and the Continuing Connected Transactions are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the

– 31 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the Continuing Connected Transactions and all other transactions contemplated respectively thereunder.

Yours faithfully, Independent Board Committee Wang Shi Ho Hin Ngai, Bosco Andrew Y. Yan Wan Kam To, Peter Frederick Ma Si Hang Independent Non-executive Directors

– 32 –

LETTER FROM CIMB

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from the Independent Financial Adviser regarding the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the terms of the Continuing Connected Transactions, including the Construction Caps, the Decoration Caps and the Furniture Caps for the purpose of incorporation in this circular:

CIMB Securities (HK) Limited

25/F Central Tower 28 Queen’s Road Central Hong Kong

October 13, 2010

To the Independent Board Committee and the Independent Shareholders of China Resources Land Limited

Dear Sirs,

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES IN RELATION TO PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED; AND

(2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition and the Continuing Connected Transactions. Details of the terms of the Acquisition and the Continuing Connected Transactions are set out in the letter from the Board as contained in the circular of the Company to the Shareholders dated October 13, 2010 (the “Circular”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

The Independent Board Committee comprising Messrs. Wang Shi, Ho Hin Ngai, Bosco, Andrew Y. Yan, Wan Kam To, Peter and Frederick Ma Si Hang, being the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to the Acquisition and the Continuing Connected Transactions.

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LETTER FROM CIMB

In formulating our recommendation, we have relied on the information and facts contained or referred to in the Circular. We have also assumed that the information, facts and representations contained or referred to in the Circular were true and accurate at the time they were made and at the date of the despatch of the Circular and continue to be so up to the date of the EGM. We have no reason to doubt the truth, accuracy and completeness of the information, facts and representations provided and represented to us by the Company and the Directors. We have also been advised by the Directors and believe that no material facts have been omitted from the Circular.

We consider that we have reviewed sufficient information and documents to satisfy ourselves that we have a reasonable basis to assess the fairness and reasonableness of the terms of the Acquisition and the Continuing Connected Transactions in order to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our recommendation. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or the prospects of the Group, the Target Group or any of their respective associates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

(I) THE ACQUISITION

In arriving at our opinion for the Acquisition, we have considered the following principal factors and reasons:

1. Background to and reasons for the Acquisition

The Group is principally engaged in property development, investment and management in the PRC.

As stated in the annual report of the Company for the year ended December 31, 2009 (“2009 Annual Report”), the Group’s core business segments are residential property development and property leasing. For the year ended December 31, 2009, the Group recorded a turnover and profit attributable to shareholders of approximately HK$16,601.35 million and HK$4,850.52 million respectively. As stated in the 2009 Annual Report, it is the Group’s strategy to provide quality and innovative properties and services in mainland China to constantly enhance the productivity along the full value chain of the property business by way of differentiation in product design and provision of comprehensive and integrated services.

On September 20, 2010 (after trading hours), the Company and the Vendor entered into the Sale and Purchase Agreement pursuant to which the Company has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares, representing the entire issued share capital of Fast Lead for the Sale and Purchase Consideration of HK$7,901.40 million (subject to adjustment).

– 34 –

LETTER FROM CIMB

The Target Group is held by Fast Lead, an investment holding company, of which the principal assets are its indirect 100% interests in the Project Sites which comprise the Hainan Shimei Bay Site (海南石梅灣項目), the Wuhan Oak Bay Site (武漢橡樹灣項目) and the Suzhou Kunshan Site (蘇州昆山項目) located in the PRC.

As stated in the Letter from the Board, the Directors believe that the Acquisition represents an excellent opportunity for the Group to increase its land bank in Hainan, Wuhan and Suzhou. The increase in land bank in such provinces and cities is strategically important to the long-term development of the Group as the Directors believe that the demand for high quality properties in these locations will keep on increasing as a result of their continuous improving economic condition. Following the Acquisition, the land bank of the Group (in terms of total gross floor area) will be increased by approximately 1.84 million square metres.

Given the above, we consider that the Acquisition contemplated under the Sale and Purchase Agreement is in line with the stated business strategy of the Company of being a competitive and leading integrated property company and is in the interest of the Company and the Shareholders as a whole.

2. Business operation and financial performance of the Target Group

Fast Lead is an investment holding company and its principal assets are its indirect 100% interests in the Project Sites which comprise the Hainan Shimei Bay Site (海南石梅灣項目), the Wuhan Oak Bay Site (武漢橡樹灣項目) and the Suzhou Kunshan Site (蘇州昆山項目) located in the PRC. As disclosed in the letter from the Board:

Hainan Shimei Bay Site ( 海南石梅灣項目 )

Currently, land use rights certificates for land of approximately 3.10 million square metres have been issued. Approximately 10 kilometres of roads have been constructed in the area, with infrastructure including facilities for water and electricity supply, anti-flooding and sewage treatment. The Le Meridien Hotel, a catering supply center and temporary office space have also been built and are in operation in the area, while a supporting base, a yacht club and a helicopter pad are in the process of construction. Construction for the first phase of the residential project is scheduled to commence in the fourth quarter of this year.

– 35 –

LETTER FROM CIMB

CR Shimei Bay Tourism Development, being the main developer, possesses a dominating position throughout the planning and development stage in the Shimei Bay Resort Area. It has competitive advantages in various aspects such as planning, regional management and liaison with different government authorities; and
CR Shimei Bay Tourism Development has completed its own master planning of the Shimei Bay Resort Area. It has completed the construction of networks for main roads and utilities, and is in the course of assisting the relocation of existing villages, within the region.

In addition, CR Shimei Bay Tourism Development has also acquired fragmentary site area of approximately 323,295 square metres on the fringe of the Shimei Bay Resort Area.

Wuhan Oak Bay Site ( 武漢橡樹灣項目 )

– 36 –

LETTER FROM CIMB

Suzhou Kunshan Site ( 蘇州昆山項目 )

The construction work of the first phase of the site is scheduled to commence in October 2010 and be completed in 2012.

Financial Information of the Target Group

Set out below are certain unaudited combined financial information of the Target Group for each of the two financial years ended December 31, 2009 prepared in accordance with the Hong Kong Financial Reporting Standards:

	For the year ended	For the year ended
	December 31, 2008	December 31, 2009
	Approximate	Approximate
	RMB’million	RMB’million
	(equivalent to	(equivalent to
	approximate	approximate
	HK$’million)	HK$’million)
Loss before taxation	52.69	95.55
	(60.33)	(109.40)
Loss attributable to	52.13	95.46
shareholders of Fast Lead	(59.69)	(109.30)

– 37 –

LETTER FROM CIMB

As at August 31, 2010, the unaudited combined net book value of the Target Group was approximately HK$3,685.10 million. As at the Latest Practicable Date, the total amount of the Shareholders’ Loans owed by the Target Group to the CRH Group (other than those within the Target Group) was approximately HK$1,036.82 million. Such Shareholders’ Loans are unsecured and shall be repaid within seven Business Days after Sale and Purchase Completion and no interest is payable on the same pending repayment within the said period.

3. Overview of the economic development and the property market in locations of the Target Group

The Hainan market

We have reviewed information latest information available from Hainan Provincial Bureau of Statistics in respect of the economic development and the property market in Hainan, the PRC, where the Hainan Shimei Bay Site is located.

Based on our review, we note that, during the period from 2005 to 2009, the city witnessed a growth in its gross regional products (“GRP”), which amounted to approximately RMB164.7 billion in 2009 and represented a compound annual growth rate (“CAGR”) of approximately 16.1% over the period and a year-on- year (“YoY”) growth of 12.8% as compared to that of 2008.

Total investment in fixed assets of the city increased to approximately RMB100.3 billion in 2009, representing a YoY growth of 41.4%, and amounted to approximately RMB55.9 billion for the first two quarters of 2010, with a YoY growth of 43.3% as compared to that of 2009.

Annual disposable income per capita of urban households of the city amounted to RMB13,751.0 in 2009, representing a YoY growth of 9.1%, and total retail consumption sales amounted to approximately RMB53.5 billion in 2009, representing a YoY growth of 19.2%.

In respect of the local property market, we note that total investment in real estate development of the city amounted to approximately RMB28.8 billion in 2009, representing a YoY growth of 44.3%, and amounted to approximately RMB20.5 billion for the first two quarters of 2010, representing a YoY growth of 78.9% as compared to that of the same period of 2009.

We also note that, with an aim to stimulating the development of the tourism sector in Hainan, the National Development and Reform Commission promulgated the implementation of international tourism development in Hainan Island development plan. The government would boost the island’s development by expanding oil and gas exploration, offering more duty free services, improving transportation networks, developing logistics, reducing pollution, building more information networks and infrastructure.

– 38 –

LETTER FROM CIMB

The Wuhan market

We have reviewed the latest information available from Statistical Information of Wuhan in respect of the economic development and the property market in Wuhan, the PRC, where the Wuhan Oak Bay Site is located.

Based on our review, we note that, during the period from 2005 to 2009, the city witnessed a growth in its GRP, which amounted to approximately RMB462.1 billion in 2009 and represented a CAGR of approximately 19.6% over the period and a YoY growth of 12.3% as compared to that of 2008.

Total investment in fixed assets of the city increased to approximately RMB300.1 billion in 2009, representing a YoY growth of 33.3%, and amounted to approximately RMB160.3 billion for the first two quarters of 2010, with a YoY growth of 27.4% as compared to that of the same period of 2009.

Annual disposable income per capita of urban households of the city amounted to RMB18,385.0 in 2009, representing a YoY growth of 10.0%, and the total retail consumption sales amounted to approximately RMB216.4 billion in 2009, representing a YoY growth of 17.0%.

In respect of the local property market, we note that total investment of real estate development of the city amounted to approximately RMB77.9 billion in 2009, representing a YoY growth of 36.5%, and amounted to approximately RMB43.7 billion for the first two quarters of 2010, representing a YoY growth of 51.6% as compared to that of the same period of 2009.

The Suzhou market

We have reviewed the latest information available from Suzhou Bureau of Statistics in respect of the economic development and the property market in Suzhou, the PRC, where the Suzhou Kunshan Site is located.

Based on our review, we note that, during the period from 2005 to 2009, the city witnessed a growth in its GRP, which amounted to approximately RMB774.0 billion in 2009 and represented a CAGR of approximately 17.8% over the period and a YoY growth of 15.5% as compared to that of 2008.

Total investment in fixed assets of the city increased to approximately RMB296.7 billion in 2009, representing a YoY growth of 13.6%, and amounted to approximately RMB168.4 billion for the first two quarters of 2010, with a YoY growth of 18.6% as compared to that of the same period of 2009.

Annual disposable income per capita of urban households of the city amounted to RMB26,320.0 in 2009, representing a YoY growth of 10.3%, and total retail consumption sales amounted to approximately RMB202.7 billion in 2009, representing a YoY growth of 30.6%.

– 39 –

LETTER FROM CIMB

In respect of the local property market, we note that total investment in real estate development of the city amounted to approximately RMB72.4 billion in 2009, representing a YoY growth of 0.9%, and amounted to approximately RMB39.9 billion for the first two quarters of 2010, representing a YoY growth of 41.6% as compared to that of the same period of 2009.

The PRC government promulgated supportive measures, including, among others, a RMB4 trillion stimulus package in late 2008, to tackle the global financial turmoil. According to the National Bureau of Statistics of China, the economy in the PRC showed a recovery trend as the YoY growth of gross domestic products of the country amounted to 11.1% for the first two quarters of 2010 as compared to that of 2009.

Taking into account the above, including the local economic figures, property market, government policy and also the improvement in the macroeconomic environment in the PRC, we concur with the view of management that there is a growth potential of the demand for high quality properties in Hainan, Wuhan and Suzhou as a result of their continuous improving economic condition.

4. Consideration and payment term

Basis of consideration

Pursuant to the Sale and Purchase Agreement, the Sale and Purchase Consideration of HK$7,901.40 million comprises:

the Share Consideration of HK$5,530.98 million (being the entire consideration for the Hainan Shimei Bay Site and part of the consideration for the Wuhan Oak Bay Site and the Suzhou Kunshan Site); and
the Cash Consideration of HK$2,370.42 million (being the remaining consideration for the Wuhan Oak Bay Site and the Suzhou Kunshan Site).

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LETTER FROM CIMB

approximately 11.0% to the adjusted combined net asset value of the Target Group as at August 31, 2010. The Sale and Purchase Consideration is approximately 34.0% above the total investment costs (including accrued finance costs) of the Target Group made by the CRH Group of approximately HK$5,895.00 million.

We have discussed with CBRE, the valuer to the Company in respect of the Project Sites, and understand that they have adopted the direct comparison method in valuing the property interests of the Project Sites. Under the direct comparison method, CBRE had made reference to the comparable land transactions in the respective local markets of the Project Sites, and in addition, for Wuhan Oak Bay Site and Hainan Shimei Bay Site, given construction is in progress, the valuation has taken into account the construction costs incurred for the developments, and for Suzhou Kunshan Site, the valuation has taken into account the outstanding land premium. CBRE had advised that such direct comparison method of valuation is one of the most commonly used valuation methods for valuing the property interest of the Project Sites.

Payment Terms

(i) Consideration Shares

On Sale and Purchase Completion, the Consideration Shares, having a total cash value of HK$5,530.98 million, will be allotted and issued to the Vendor (or as it may direct). The Consideration Shares will be issued at the issue price of HK$15.8827 per Share at par with the average closing price of the Shares for the fifteen trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange and represents:

(a) a discount of approximately 6.7% from HK$17.02, being the closing price of the Shares on the last trading day prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(b) a discount of approximately 4.0% from HK$16.54, being the approximate average closing price on the Shares for the five trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(c) a discount of approximately 2.0% from HK$16.20, being the approximate average closing price of the Shares for the ten trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange;
(d) a premium of approximately 1.9% from HK$15.59, being the approximate average closing price of the Shares for the thirty trading days prior to the date of the Sale and Purchase Agreement, as quoted on the Stock Exchange; and

– 41 –

LETTER FROM CIMB

(e) a discount of approximately 1.7% from HK$16.16, being the closing price of the Shares on the Latest Practicable Date, as quoted on the Stock Exchange.

The chart below shows the closing prices of the Shares on the Stock Exchange during the six-month period preceding the last trading day prior to the date of the Sale and Purchase Agreement (the “Pre-Announcement Period”) up to and including the Latest Practicable Date (the “Post-Announcement Period”):

==> picture [364 x 201] intentionally omitted <==

----- Start of picture text -----

HK$/Share
18.00
Latest
Practicable
Issue Price of Date
17.00 Consideration Shares of
HK$15.8827 per Share
16.00
15.8827
15.00
14.00
Date of
Announcement
13.00
Mar Apr May June July Aug Sep Oct
2010
----- End of picture text -----

Source: Bloomberg

As shown in the above chart, during the Pre-Announcement Period, the highest and lowest closing prices of the Shares as quoted on the Stock Exchange were HK$17.94 per Share recorded on April 7, 2010 and HK$13.18 per Share recorded on May 17, 2010, respectively.

Following the release of the announcement dated September 20, 2010 in relation to the Sale and Purchase Agreement (the “Announcement”), the price of the Shares traded within the range of HK$15.58 to HK$17.24 per Share, with an average price of HK$16.51 per Share. As at the Latest Practicable Date, the Shares closed at HK$16.16.

Views

Having considered the above and in particular that the issue of the Consideration Shares to partly satisfy the Sale and Purchase Consideration will enable the Group to preserve working capital for future business expansion as well as increase the capital base of the Group, and that the issue price per Consideration Share was determined with reference to the market

– 42 –

LETTER FROM CIMB

price for the Shares and represents a discount of approximately 6.7% to the closing price of the Shares on the last trading day or at par with the average closing price of the Shares for the fifteen trading days prior to the date of the Sale and Purchase Agreement, we consider that the issue of the Consideration Shares is in the interests of the Company and the Independent Shareholders and that the issue price per Consideration Share is also fair and reasonable so far as the Company and the Independent Shareholders are concerned.

(ii) Cash Consideration

To assess the fairness of the interest rate of 150 basis points above HIBOR paid by the Group for the Cash Consideration, we have made reference to the other borrowings quoted by a bank to the Group in July 2010 and noted the interest rate of the Cash Consideration is lower than the interest rate of other borrowings of the Group in the recent months.

5. Other terms

On Sale and Purchase Completion, the Company, the Vendor and CRH will enter into the Deed of Indemnity. Subject to certain limitations as stated in the Deed of Indemnity, the Vendor undertakes to the Company to indemnify and keep indemnified the Company from and against any tax liabilities in relation to the business activities of the Target Group prior to Sale and Purchase Completion. CRH, at the request of the Vendor, unconditionally and irrevocably guarantees as a primary obligation to the Company the due and punctual performance and observance by the Vendor of all the Vendor’s obligations, and the punctual discharge by the Vendor of all the Vendor’s liabilities to the Company, arising under the Sale and Purchase Agreement and the Deed of Indemnity.

– 43 –

LETTER FROM CIMB

6. Financial effect

Net book value

The Sale and Purchase Consideration of approximately HK$7,901.40 million represents a discount of approximately 11.0% to the unaudited adjusted combined net asset value of the Target Group of approximately HK$8,875.20 million as at August 31, 2010. As advised by the Company, as both the Group and the Target Group are under the common control of CRNC and pursuant to the current accounting policy adopted by the Group, the Acquisition will be accounted for based on the principles of merger accounting in accordance with Accounting Guideline 5 “Merger Accounting for Common Control Combination” issued by the Hong Kong Institute of Certified Public Accountants and the net assets of the Group and the Target Group will be consolidated using the existing book values. We further understand from the Company that adjustments to eliminate share capital of the Target Group against the historical investment cost in the Target Group will be made to merger reserve in the consolidated statement of changes in equity of the Group. As at August 31, 2010, the consolidated book value (the “NBV”) of the Target Group amounted to HK$3,685.10 million. Under merger accounting, the Group will record an increase of HK$1,314.68 million (being the amount of the NBV of the Target Group reduced by the amount of the Cash Consideration of HK$2,370.42 million) in its consolidated NBV or shareholders’ equity in the Company as a result of the Acquisition. The actual increase in NBV of the Group is subject to the consolidated NBV of the Target Group at Sale and Purchase Completion and audit.

– 44 –

LETTER FROM CIMB

Earnings

The Group had an audited consolidated net profit after taxation attributable to the Shareholders of the Company for the year ended December 31, 2009 of approximately HK$4,408.91 million. Upon the Sale and Purchase Completion, Fast Lead will become a wholly-owned subsidiary of the Company and, accordingly, the financial results of the Target Group will be consolidated into the financial statements of the Group. As advised by the Company, given that majority of the Project Sites is either under development or held for future development (apart from the Le Meridien Hotel in Hainan Shimei Bay Site, which has been in operation and incurred insignificant losses for the year ended 31 December 2009 and six months ended 30 June 2010 as compared to that of the Group), they will start to contribute to both the revenue and the earning to the Group once the Project Sites are launched to the market starting from year 2011.

The Company advised that it is anticipated that there will not be any significant effect on the consolidated profit and loss account of the Group resulting from the Acquisition immediately upon Sale and Purchase Completion.

Working capital

RECOMMENDATION

Having considered the principal factors and reasons referred to the above, in particular:

the Sale and Purchase Consideration represents a discount of approximately 11.0% to the adjusted combined net asset value of the Target Group as at August 31, 2010;
the direct comparison method adopted by CBRE being one of the most commonly used methodologies in valuing the property interests of the Project Sites; and
the issue of the Consideration Shares to partly satisfy the Sale and Purchase Consideration enabling the Group to preserve working capital for future business expansion as well as increase the capital base of the Group,

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LETTER FROM CIMB

we are of the opinion that the Acquisition is in line with the Group’s strategy and on normal commercial terms, falls within the ordinary and usual course of business of the Group, and is in the interests of the Company and the Independent Shareholders as a whole and that the terms thereof including the issue of the Consideration Shares are fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote for the ordinary resolution to be proposed at the EGM to approve the Acquisition.

(II) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

1. Background and reasons

The Group is principally engaged in the property development, investment and management and construction and decoration services. As disclosed in the announcements of the Company dated December 3, 2007 and June 6, 2008, the Group has been engaging in the provision of construction and decoration services and furniture manufacturing and sale in the PRC to the CRH Group (the “Previous Continuing Connected Transactions”), in which (i) the construction services provided by the Group include building construction, mechanical and electrical engineering and installation as well as urban utilities (the “Construction Services”); (ii) the decoration services provided by the Group include interior design, decoration and furnishing of offices, commercial and residential properties (the “Decoration Services”) and (iii) the furniture services provided by the Group include furniture manufacturing and sale (the “Furniture Services”), and these transactions fall within the ordinary and usual course of business of the Group. It is expected that the Company, through its subsidiaries and in their ordinary course of business, will continue to provide Construction Services, Decoration Services and Furniture Services to the CRH Group and associates of CRH.

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LETTER FROM CIMB

Views

Given the above and in particular the fact that the nature of the Continuing Connected Transactions fall within the principal scope of business of the Group; and the Continuing Connected Transactions will be conducted on normal commercial terms and the prices will be either at market prices or at prices no less favourable to the Group than those available from independent third parties, we consider that the Continuing Connected Transactions are in the interests of the Company and the Shareholders as a whole.

2. The Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement

Upon expiry of the Previous Continuing Connected Transactions, on September 20, 2010, the Company and CRH has entered into the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement to govern the principal terms of these continuing connected transactions for the three financial years ending December 31, 2013 which include, among others, that each contract of construction, decoration or furniture services will be entered into on normal commercial terms and the prices will be either at market prices or at prices no less favourable to the Group than those available from independent third parties.

Having considered that the prices of all future transactions under the Continuing Connected Transactions will be either at market prices or at prices no less favourable to the Group than those available from independent third parties and each year, the auditors of the Company will confirm to the Directors that the Continuing Connected Transactions have been entered into in accordance with the relevant agreement governing the transactions as required by the Listing Rules, we are of the view that the pricing terms of the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement is on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Group and the Shareholders as a whole.

– 47 –

LETTER FROM CIMB

The Proposed Caps

Set out below are the details of the Construction Caps, the Decoration Caps and the Furniture Caps (together, the “Proposed Caps”) under the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement for each of the three years ending December 31, 2013:

Category	The Proposed Caps	The Proposed Caps
Figures in RMB’million
(equivalent to approximately
HK$’ million)	For the year ending December 31
	2011	2012	2013
The Construction Caps	1,620	1,650	1,800
	(1,855)	(1,889)	(2,061)
The Decoration Caps	390	400	410
	(447)	(458)	(469)
The Furniture Caps	18	18	18
	(21)	(21)	(21)

Our analysis in connection with the Proposed Caps is set out below:

The Construction Caps

As stated in the letter from the Board, the Construction Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; and (iii) the anticipated demand for construction services of the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented from 2011 to 2013.

The aggregate values of the transactions for each of the two years ended December 31, 2009 and the six months ended June 30, 2010 were approximately RMB32,160,000, approximately RMB153,590,000 and approximately RMB63,230,000 respectively. We note that the Construction Caps represent a substantial increase as compared to the historical amounts of the Previous Continuing Connected Transactions. As we consider that it is reasonable for the Company to make reference to the anticipated construction projects to be undertaken by the CRH Group and the target growth rate when considering the Construction Caps, we have not directly compared the Construction Caps with the historical amounts of the transactions.

– 48 –

LETTER FROM CIMB

In assessing the reasonableness of the Construction Caps, we have discussed with the management of the Company on the underlying basis and understood that when considering the anticipated demand for construction services of the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented, they have taken into account the existing scale and operations of the businesses of the Group. We have obtained the project planning schedule of the Group which shows the list of planned development projects with the respective expected progress of the projects and the relevant cost estimation for the years ending December 31, 2012, while the expected transaction amounts of the Construction Services in the year ending December 31, 2013 is estimated based on a targeted growth rate to the relevant cost estimation for the year ending December 31, 2012. We have discussed with the management of the Company and are given to understand that the underlying estimated costs of the relevant projects are estimated according to the nature, size and duration of the relevant construction projects and consider such basis reasonable for estimating the construction costs.

Given the above, we are of the view that the basis adopted by the management of the Company in determining the Construction Caps is fair and reasonable so far as the Company and the Shareholders are concerned.

The Decoration Caps

As stated in the letter from the Board, the Decoration Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; (iii) the anticipated growth and development of businesses of the CRH Group and associates of CRH; and (iv) the anticipated demand for decoration services by the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented from 2011 to 2013.

The aggregate values of the transactions for each of the two years ended December 31, 2009 and the six months ended June 30, 2010 were approximately RMB339,840,000, approximately RMB209,210,000 and approximately RMB81,430,000 respectively. We note that the Decoration Caps represent a substantial increase as compared to the historical amounts of the Previous Continuing Connected Transactions. As we consider that it is reasonable for the Company to make reference to the anticipated demand of decoration services by the CRH Group and the target growth rate when considering the Decoration Caps, we have not directly compared the Decoration Caps with the historical amounts of the transactions.

In assessing the reasonableness of the Decoration Caps, we have reviewed the projected transaction amounts and discussed with the Company’s management on the underlying basis. We are given to understand that while considering the existing scale and operations of the businesses of the Group, the anticipated growth and development of businesses of the CRH Group and associates of CRH, and the anticipated demand for decoration services by the CRH Group and associates of CRH on the basis of its planned real estate development projects to be implemented,

– 49 –

LETTER FROM CIMB

the management of the Group has estimated the cost of the Decoration Services with reference to the anticipated growth in construction projects in the coming three years, the growth in the number of the chain stores operated by the CRH Group and the estimated refurbishment cost of certain properties hold by the CRH Group.

Given the above, we are of the view that the basis adopted by the management of the Company in determining the Decoration Caps is fair and reasonable so far as the Company and the Shareholders are concerned.

The Furniture Caps

As stated in the letter from the Board, the Furniture Caps are determined with reference to (i) the nature of the transactions; (ii) the existing scale and operations of the businesses of the Group; (iii) the anticipated demand for furniture products of the CRH Group and associates of CRH on the basis of their business expansion plans to be implemented from 2011 to 2013; and (iv) potential price inflation.

In assessing the reasonableness of the Furniture Caps, we have reviewed the projected transaction amounts and discussed with the Company’s management on the underlying basis. We are given to understand that in determining the Furniture Caps for the year ending December 31, 2011, the management of the Company has referenced to the growth of the anticipated construction projects and refurbishment requirement of the CRH Group, and we consider it is reasonable for the Group to relate the demand of Furniture Services to that of the construction and refurbishment requirement.

Given the above, we are of the view that the basis adopted by the management of the Company in determining the Furniture Caps is fair and reasonable so far as the Company and the Shareholders are concerned.

However, the Shareholders should note that the Proposed Caps relate to future events and do not represent a forecast of the transaction amounts payable or receivable by the Group as a result of the Continuing Connected Transactions. Consequently, we express no opinion as to how closely the actual transaction amounts of the Continuing Connected Transactions correspond with the Proposed Caps as discussed above.

– 50 –

LETTER FROM CIMB

RECOMMENDATION

Having considered the principal factors and reasons referred to the above, we are of the opinion that the Continuing Connected Transactions are in the ordinary and usual course of business of the Group, on normal commercial terms, fair and reasonable and are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote for the ordinary resolution to be proposed at the EGM to approve the Continuing Connected Transactions and the Proposed Caps.

Yours faithfully, For and on behalf of CIMB Securities (HK) Limited Alex Lau Heidi Cheng Head Deputy Head Corporate Finance Corporate Finance

– 51 –

APPENDIX I

PROPERTY VALUATION

==> picture [90 x 51] intentionally omitted <==

4/F Three Exchange Square 8 Connaught Place Central, Hong Kong T 852 2820 2800 F 852 2810 0830

香港中環康樂廣場八號交易廣場第三期四樓

www.cbre.com.hk

地產代理(公司)牌照號碼 Estate Agent’s Licence No: C-004065

October 13, 2010

The Directors China Resources Land Limited Room 4301, China Resources Building 26 Harbour Road Wanchai, Hong Kong

Dear Sirs,

RE: PORTFOLIO OF PROPERTIES IN THE PEOPLE’S REPUBLIC OF CHINA

We refer to the instruction from China Resources Land Limited (hereinafter refer to the “Company”) for us to value the property interests held by China Resources (Holdings) Company Limited and its subsidiaries (hereinafter refer to the “Sales Group”) located in the People’s Republic of China (“the PRC”), details of which are set out in the attached valuation certificates. We confirm that we have made relevant investigations and enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market values of the property interests as at 31 August 2010 (the “Date of Valuation”).

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities (the “Exchange Listing Rules”) issued by the Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards on Properties (1st Edition) published by the Hong Kong Institute of Surveyors (“HKIS”).

Our valuation is made on the basis of Market Value which is defined by the HKIS to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

– 52 –

APPENDIX I

PROPERTY VALUATION

In forming our opinion of the value of the property interests in Group I, which are held by the Sales Group for development in the PRC, we have valued the property interests on the basis that the properties, unless otherwise specified, will be developed and completed in accordance with the Sales Group’s latest development scheme provided to us. We have adopted the Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant markets. Comparable properties of similar size, character and location are analyzed and carefully weighted against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of capital value.

For those properties in Group I which have started the construction works, we have added the construction cost, professional fee and other costs already incurred to the clear site value derived by Direct Comparison Approach to arrive at the capital value of the property in existing state.

In forming our opinion of the value of the property interests in Group II, which are held for investment by the Sales Group in the PRC, we have adopted the direct comparison approach by making reference to comparable sales as available in the relevant market.

For the property interest in Group III, which is rented for occupation by the Sales Group in the PRC, they are considered to have no commercial value due mainly to the prohibition against assignment or sub-letting or otherwise due to the lack of substantial profit rent.

Our valuation has been prepared in the capacity as “overseas consultants” and has been made on the assumption that the owner sells the property on the open market without the benefit of any deferred terms contract, leaseback, joint venture, management agreement or any similar arrangement which would serve to increase the value of the property.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property nor for any expenses or taxation which may be incurred in effecting sale. Unless otherwise stated, it is assumed that the properties were free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

We have relied to a considerable extent on the information given by the Company and have accepted the advice given to us on such matters as tenure, planning approvals, statutory notices, easements, development scheme, development schedule, site and floor areas, incurred and outstanding construction costs and all other relevant matters. No on-site measurement has been taken. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us and are therefore only approximations. We have had no reason to doubt the truth and accuracy of the information provided to us, which are material to the valuation. We were also advised that no material factors have been omitted from the information supplied.

– 53 –

APPENDIX I

PROPERTY VALUATION

We have been provided with copies of the title documents relating to the properties, however due to the nature of the land registration system in the PRC, we cannot cause searches to be made on the title of the properties nor have we scrutinised all the original documents to verify ownership and encumbrances or to ascertain the subsequent amendments, if any, which may not appear on the copies handed to us. In forming our value to the property in the PRC, we have relied on the legal opinion provided by the Company’s PRC legal advisor, Global Law Office (the “PRC Legal Opinion”).

In our valuation, we have assumed that the Company will make the outstanding payment to the relevant government authority and parties, and the government and the former land owners will deliver the sites to the Company according to the land grant contracts.

We have carried out physical inspection of the properties to such extent as for the purpose of this valuation. In the course of our inspection, we did not notice any serious defects. However, we have not carried our any structural survey nor any tests were made on the building services. Therefore, we are not able to report whether the properties are free of rot, infestation or any other structural defects. We have not carried out investigations on the site to determine the suitability of the ground conditions and the services etc. for any future development. Our valuation is on the basis that these aspects are satisfactory.

We have not carried out site measurements to verify the correctness of the site area of the property and have assumed that the site area shown on the documents and official site plans handed to us is correct.

The property interests have been valued in Renminbi (“RMB”).

We enclose herewith our summary of values and valuation certificates.

Yours faithfully, For and on behalf of

CB Richard Ellis Limited

Harry C. W. Chan MHKIS MRICS MCIREA RPS(GP) Senior Director

Valuation & Advisory Services

Note: Mr. Harry Chan is a Registered Professional Surveyor (General Practice), a member of the Hong Kong Institute of Surveyors, a member of Royal Institution of Chartered Surveyors and a member of China Institute of Real Estate Appraisers and Agents. He has over 18 years of valuation experience in the PRC.

– 54 –

APPENDIX I

PROPERTY VALUATION

SUMMARY OF VALUES

Property Capital value in existing state as at 31 August 2010 Interest attributable to the Sales Group (RMB) (%) Group I – Property interests held by the Sales Group for development 1. Various land parcels within Shimei Bay Tourism Resort Area, Liji Town, Wanning City, Hainan Province, the People’s Republic of China 5,426,000,000 Note 1 2. A development site in Hongqiao Road and Wanbu Road, Yushan County, Kunshan, Suzhou City, Jiangsu Province, the People’s Republic of China 937,000,000 100% 3. Oak Bay, Nos. 5&7 Tieji Road, Yangyuan Street, Wuchang District, Wuhan City, Hubei Province, the People’s Republic of China 2,009,000,000 100% Sub-total Group II – Property interests held by the Sales Group for investment 4. Le Meridien Shimei Bay Beach Resort & Spa, Shimei Bay Tourism Resort Area, Liji Town, Wanning City, Hainan Province, the People’s Republic of China 890,000,000 100%	Capital value in existing state attributable to the Sales Group as at 31 August 2010 (RMB) 5,164,000,000 937,000,000 2,009,000,000
	8,110,000,000

	890,000,000

– 55 –

APPENDIX I

PROPERTY VALUATION

			Capital value in
			existing state
	Capital value in	Interest	attributable to the
	existing state as at	attributable to the	Sales Group as at
Property	31 August 2010	Sales Group	31 August 2010
	(RMB)	(%)	(RMB)

Group III – Property interests rented by the Sales Group for occupation

Units 902 and 903 Xinghai Building, Qianjin Xi Road, Yushan Town, Kunshan, Suzhou City, Jiangsu Province, the People’s Republic of China

No Commercial Value GRAND TOTAL: 9,000,000,000

Note:

The Sales Group has indirect 100% interest in Property No. 1 except the followings:
a) The Sales Group has indirect interest of 3.01% in Hainan Haiyun Hotel Development Company Limited.
b) The Sales Group has indirect interest of 20% in Hainan Huachang Tourism Development Limited.

– 56 –

APPENDIX I

PROPERTY VALUATION

VALUATION CERTIFICATE

Group I – Property interests held by the Sales Group for development

Property

Various land parcels within Shimei Bay Tourism Resort Area, Liji Town, Wanning City, Hainan Province, the People’s Republic of China

Description and tenure

The property forms part of the Shimei Bay Tourism Resort Area which is planned for a development comprising a large scale tourism and resort facilities.

The entire Shimei Bay Resort Area has a planned total site area of about 6,830,000 square metres and a planned gross floor area of about 1,486,000 square metres.

Capital value in the existing state as at 31 August 2010 RMB5,426,000,000

Details of occupancy

Upon our recent RMB5,426,000,000 inspection, staff quarter in the supporting base (interests was under construction, a attributable to the catering centre and Sales Group: temporary office were RMB5,164,000,000) erected on the site (Note 13) together with some built roads, landscaped area and infrastructure facilities. The remaining portion of the property was vacant.

According to the

information provided by the Sales Group, currently total land area of approximately 2.98 million square metres has been acquired for the proposed development of the property comprising residential, hotel, commercial, staff quarter, food and beverage, various ancillary community and amenity facilities, etc. The planned gross floor area of the proposed development is about 1.04 million square metres.

– 57 –

APPENDIX I

PROPERTY VALUATION

Property

Description and	Description and	tenure
Below is the area
breakdown of site area by
uses:
Use	Site Area
		(sq.m.)
Residential		833,071
Hotel		796,214
Commercial
services and
Entertainment		179,493
Supporting base		231,493
Golf Course		25,324
Infrastructure
and Greenland		489,368
Road		152,995
Non-developable
area		274,227
Total:		2,982,185

Capital value in the existing state as at 31 August 2010

Currently approximately 10 kilometres of roads are constructed in the area, with infrastructure including facilities for water and electricity supply, anti-flooding and sewage treatment. A catering centre and a temporary office with gross floor area of approximately 3,273.49 square metres are in operation in the subject site.

Most of the land parcels of the property are held under State-owned Land Use Rights Certificates for various uses and the latest land use term expiring in 31 December 2079.

– 58 –

APPENDIX I

PROPERTY VALUATION

Notes:

Pursuant to the State-owned Land Use Right Certificates issued by the People’s Government of Wanning, Haitian Development (Hainan) Company Limited (海南海天酒店開發有限公司), Haini Tourism Development (Hainan) Limited (海南海尼旅業有限公司), Hainan Haiyun Hotel Development Company Limited (海南海韻酒店開發有限公司) and China Resources Shimei Bay Tourism Development (Hainan) Limited (海南華潤石梅灣旅遊開發有限公司) have obtained the land use rights of the site. The details of certificates is as below:

Land User No. of State-owned Land Use Right Certificates Haitian Development (Hainan) Company Limited 2 海南海天酒店開發有限公司 6 Sub-Total 8 China Resources Shimei Bay Tourism Development (Hainan) Limited 海南華潤石梅灣旅遊開發有限公司 34 5 1 4 1 1 1 Sub-Total 47 Haini Tourism Development (Hainan) Limited 5 海南海尼旅業有限公司 1 Sub-Total 6 Hainan Haiyun Hotel Development Company Limited 海南海韻酒店開發有限公司 6 China Resources Shimei Bay Tourism Development (Hainan) Limited 海南華潤石梅灣旅遊開發有限公司 1 Sub-Total 7 Grand Total 68	Land User No. of State-owned Land Use Right Certificates Haitian Development (Hainan) Company Limited 2 海南海天酒店開發有限公司 6 Sub-Total 8 China Resources Shimei Bay Tourism Development (Hainan) Limited 海南華潤石梅灣旅遊開發有限公司 34 5 1 4 1 1 1 Sub-Total 47 Haini Tourism Development (Hainan) Limited 5 海南海尼旅業有限公司 1 Sub-Total 6 Hainan Haiyun Hotel Development Company Limited 海南海韻酒店開發有限公司 6 China Resources Shimei Bay Tourism Development (Hainan) Limited 海南華潤石梅灣旅遊開發有限公司 1 Sub-Total 7 Grand Total 68	Site area Use Expiry Date (sq.m.) 67,664.61 Tourism 2043-10-1 505,282.00 Residential 2079-12-31 572,946.61 1,576,190.87 Tourism from 2041-8-17 to 2064-6-15 45,088.00 Transportation 2043-10-30 6,666.51 Telecommunications 2065-8-18 286,076.06 Lodging, Food and Beverage 2049-12-31 231,495.00 Residential 2079-12-31 49,559.03 Municipal facilities 2059-7-31 6,162.00 Public facilities 2059-12-31 2,201,237.47 112,254.92 Tourism from 2041-8-17 to 2043-11-30 5,433.33 Transportation 2043-10-30 117,688.25 87,877.47 Tourism 2043-6-7 2,468.37 Tourism 2043-10-1 90,345.84 2,982,218.17
	8 司 34 5 1 4 1 1 1 47 5 1 6 6 1 7	572,946.61
		1,576,190.87 45,088.00 6,666.51 286,076.06 231,495.00 49,559.03 6,162.00
		2,201,237.47
		112,254.92 5,433.33
		117,688.25
		87,877.47 2,468.37
		90,345.84
	68

– 59 –

APPENDIX I

PROPERTY VALUATION

According to the Construction Land Use Planning Permit No. Wan Di (2009)61 issued by Wanning City Construction Bureau dated 28 September 2009. The total site area of the property is 224,826.67 square metres and the developer is China Resources Shimei Bay Tourism Development (Hainan) Limited (海南華潤石梅灣旅遊開發有限公司).
According to Construction Works Planning (Temporary) Permit No. Wan Jian Cheng Gui Lin (2009)116 issued by Wanning City Planning Bureau dated 28 September 2009, the development with 25,019.19 square metres held by China Resources Shimei Bay Tourism Development (Hainan) Limited (海南華潤石梅灣旅遊開發有限公司) was permitted for construction.
According to Construction Works Planning Permit No. Wan Jian Cheng Gui (2005) 112 issued by Wanning City Planning Bureau, the development with gross floor area of approximately 2,977 square metres held by China Resources Shimei Bay Tourism Development (Hainan) Limited (海南華潤石梅灣旅遊開發有限公司) was permitted for construction.
According to Construction Works Planning (Temporary) Permit No. Wan Jian Cheng Gui Lin (2005) 105 issued by Wanning City Planning Bureau dated 23 December 2005, the development with total gross floor area of approximately 296.49 square metres held by China Resources Shimei Bay Tourism Development (Hainan) Limited (海南華潤石梅灣旅遊開發有限公司) was permitted for construction.
Pursuant to a Construction Works Commencement Permit No. Wan Jian (2009)51B issued by Wanning City Construction Bureau dated 8 January 2009, the construction with gross floor area of approximately 25,100 square metres was permitted to commence.
Pursuant to a Construction Works Commencement Permit No. Wan Jian (2004) 31 issued by Wanning City Construction Bureau dated 28 July 2004, the construction work with gross floor area of approximately 2,977 square metres was permitted to commence.
Pursuant to a Construction Works Commencement Permit No. Wan Jian (2005) 39 issued by Wanning City Construction Bureau dated 25 November 2005, the construction work with gross floor area of approximately 296.49 square metres was permitted to commence.
In accordance with the Master Planning of Shimei Bay Tourism Resort Area (the “Resort Area”) revised in 2008, the total developable construction site area within the Resort Area is approximately 5.31 million square metres, of which approximately 2.77 million square metres of land with Land Use Right Certificates in place. With respect to the remaining land area of 2.54 million square metres of Shimei Bay Resort Area, the Company believes that it is well positioned to take advantages of any release of the remaining land in the region on the following grounds:
a. China Resources Shimei Bay Tourism Development (Hainan) Limited, being the main developer, possesses a dominating position throughout the planning and development stage in the Resort Area. It has competitive advantages in various aspects such as planning, regional management and liaison with different government authorities; and
b. China Resources Shimei Bay Tourism Development (Hainan) Limited has completed its own master planning of the Resort Area. It has completed the construction of networks for main roads and utilities, and is in the course of assisting the relocation of existing villages, within the region.

In addition, China Resources Shimei Bay Tourism Development (Hainan) Limited has also acquired fragmentary site area of approximately 323,295 square metres on the fringe of the Resort Area.

The staff quarter in the supporting base is due to completion at the end of August 2010 and the Sales Group is applying for Completion Certificate for Construction Works. There is no outstanding construction cost for this portion.

– 60 –

APPENDIX I

PROPERTY VALUATION

A parcel of land of the property known as Lot 4 with site area of about 110,421 square metres is contracted for sale at a consideration of about RMB182 million. According to the contract, the land premium receivable is RMB72,811,200 as at the date of valuation.
Another parcel of land of the property known as Lot 6 with site area of about 90,346 square metres is subject to a cooperative agreement dated 11 December 2005 and its supplementary agreements dated 23 June 2006 and 15 April 2008. According to the agreements Lot 6 will be transferred to Belgravia Properties Limited at a consideration of RMB81,306,000.
The Sales Group has indirect 100% interest in the property except the followings:
a) The Sales Group has indirect interest of 3.01% in Hainan Haiyun Hotel Development Company Limited.
b) The Sales Group has indirect interest of 20% in Hainan Huachang Tourism Development Limited.
The current use of the property is in compliance with the town planning use.
The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Grant Contract Yes (ii) State-owned Land Use Rights Certificate Yes (iii) Construction Land Use Planning Permit Part (iv) Construction Project Planning Permit Part (v) Construction Works Commencement Permit Part (vi) Building Ownership Certificate N/A
The opinion of the PRC legal adviser on the PRC laws states that
(i) The aforesaid companies have proper legal title to the property and have the right to use, transfer, lease and mortgage the property during the period of residual land use term and is protected by the PRC laws.
(ii) The land premium of the property has been fully settled.

– 61 –

APPENDIX I

PROPERTY VALUATION

VALUATION CERTIFICATE

Property

A development site located at the eastern side of Hongqiao Road and northern side of Wanbu Road, Yushan County, Kunshan, Suzhou City, Jiangsu Province, the People’s Republic of China

Description and tenure

The property comprises a development site with a site area of about 259,988 square metres.

According to the information provided by the Sales Group, the property is proposed for a development comprising low to medium-rise residential and ancillary community and amenity facilities.

Details of occupancy

Upon our recent inspection, the property is vacant.

Capital value in the existing state as at 31 August 2010

RMB937,000,000

(100% interests attributable to the Sales Group: RMB937,000,000)

The gross floor area of the proposed development is about 285,986 square metres (excluding underground areas).

The development is proposed to provide underground car parking spaces with a total gross floor area of 90,484 square metres.

The development is divided into 4 phases and the construction work is scheduled to be started at the third quarter of 2010 and phase 1 to be completed in 2012.

The property is held under State-owned Land Use Rights Grant Contract for a land use term of 70 years for residential use.

– 62 –

APPENDIX I

PROPERTY VALUATION

Notes:

Pursuant to the State-owned Land Use Rights Grant Contract – No. 3205832009CR0150 entered into between Kunshan Municipal Bureau of Land Resources and Capital Fountain Limited (歷達有限公司) dated 18th November 2009 and its supplements between Kunshan Municipal Bureau of Land Resources, Capital Fountain Limited (歷達有限公司), China Resources Land (Kunshan) Limited (華潤置地（昆山）有限公司) and People’s Government of Yushan County dated 4th May 2010, the land use rights of the Site have been contracted to be granted to the Sales Group with a total consideration of RMB2,157,900,400 (representing full land premium excluding deed tax). The development conditions of the property are set out as follows:–

Gross Site Area : 259,988 square metres Net Site Area : 259,988 square metres Plot Ratio : Not more than 1.1 Building Density : Not more than 30% Greenery Ratio : Not less than 40% Usage : Residential Building Covenant : Before 1 March 2012 Term : 70 years

Pursuant to the Business License No.320000400004117 dated 2nd February 2010, China Resources Land (Kunshan) Limited (華潤置地（昆山）有限公司) is a wholly owned foreign enterprise with an operating period of 50 years commencing from 2nd February 2010. The business scope includes real estate development and management.
As advised by the Sales Group, an outstanding premium and deed tax are payable to the government as at the date of valuation. The outstanding land premium is about RMB1,510.53 million and the deed tax is about RMB86.32 million. In our valuation, we have taken into account the outstanding premium amount and deed tax.
The current use of the property is in compliance with the town planning use.
The major certificates and permits of the property are summarized as follows:

(i)	State-owned Land Use Rights Grant Contract	Yes
(ii)	State-owned Land Use Rights Certificate	No
(iii)	Construction Land Use Planning Permit	No
(iv)	Construction Project Planning Permit	No
(v)	Construction Works Commencement Permit	No
(vi)	Building Ownership Certificate	No

The opinion of the PRC legal adviser on the PRC laws states that:
(i) Part of the land premium with amount of RMB647,370,120 has been paid while the rest left unpaid.
(ii) The State-owned Land Use Rights Grant Contract – No. 3205832009CR0150 is legal, valid and binding on both parties. The Sales Group shall have no legal impediment to obtaining the land use right of the property provided that the outstanding land premium is fully settled.

– 63 –

APPENDIX I

PROPERTY VALUATION

VALUATION CERTIFICATE

Property

Oak Bay, Nos. 5&7 Tieji Road, Yangyuan Street, Wuchang District, Wuhan City, Hubei Province, the People’s Republic of China

Description and tenure

The property is a development known as Oak Bay which has a site area of about 190,268.56 square metres. The total plot ratio gross floor area should not exceed 476,000 square metres.

Details of occupancy

Upon our recent inspection, Phase 1 of the property was under construction and the remaining portion was vacant.

Capital value in the existing state as at 31 August 2010 RMB2,009,000,000

(100% interests attributable to the Sales Group: RMB2,009,000,000)

According to the information provided by the Sales Group, the property is proposed for a development comprising residential, commercial, school and ancillary community and amenity facilities.

Below is the floor area breakdown by uses.

	Approx. Gross	Approx. Gross
Use		Floor Area
		(sq.m.)
Residential		456,840
Retail		7,178
Clubhouse		1,607
School		9,636
Management
room		739
Sub-total:		476,000
Other public
area		17,219
Basement		90,244
Total:		583,463

The first phase of the property is scheduled to be completed at the end of 2012.

The property is held under a land use certificate for a land use term of 70 years from 28 May 2010 for residential use.

– 64 –

APPENDIX I

PROPERTY VALUATION

Notes:

In accordance with the Confirmation Letter of State-owned Land Transaction No. [2007]024-1 dated 3 August 2007, the land use rights of the property having a site area of approximately 190,268.56 square metres has been granted to China Resources Land (Wuhan) Industry Company Limited for residential use at a consideration of RMB1,621 million.
Pursuant to a State-owned Land Use Rights Grant Contract – No. WH-2010-44 entered into between Wuhan Municipal Land Resources & Planning Bureau and China Resources Land (Wuhan) Industry Company Limited (華潤置地（武漢）實業有限公司) dated 28 May 2010, the development conditions of the part of the property are set out as follows:–

Site Area : 64,705.55 square metres Plot Ratio : 2.5 Building Density : Not more than 25% Usage : Residential Term : 70 years for residential use Land Premium : RMB551,261,300 Building Covenant : Before 27 February 2013 Other Item : The total floor area of the units less than 90 square metres should be not less than 60% of the total development floor area.

According to the Construction Land Use Planning Permit No. Wu Gui Di (2010)101 issued by Wuhan Municipal Land Resources & Planning Bureau dated 12 April 2010, The site area of the part of the property is 64,780 square metres and the developer is China Resources Land (Wuhan) Industry Company Limited (華潤置地（武漢）實業有限公司).
Pursuant to the State-owned Land Use Right Certificates issued by the People’s Government of Wuhan Municipal, China Resources Land (Wuhan) Industry Company Limited (華潤置地（武漢）實業有限公司) has obtained the land use rights of the part of the property. The details of certificate is as below:

Certificate No. Use Site area Expiry Date (sq.m.) No. Wu Guo Yong(2010)263 Residential 64,705.55 27 May 2080

The current use of the property is in compliance with the town planning use.
As advised by the Sales Group, the incurred cost as at the date of valuation was approximately RMB87 million and the estimated outstanding cost for completion is about RMB1,576 million.
The capital value of the proposed development if completed as at the date of valuation would be approximately RMB5,339 million.
The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Grant Contract Part (ii) State-owned Land Use Rights Certificate Part (iii) Construction Land Use Planning Permit Part (iv) Construction Project Planning Permit N/A (v) Construction Works Commencement Permit N/A (vi) Building Ownership Certificate N/A

– 65 –

APPENDIX I

PROPERTY VALUATION

The opinion of the PRC legal adviser on the PRC laws states that
(i) The State-owned Land Use Rights Certificate – No. Wu Guo Yong(2010)263 is legal, valid and binding on both parties. China Resources Land (Wuhan) Industry Company Limited (華潤置地（武漢）實業有限公司) has proper legal title to the property and has the land use right of the property.
(ii) According to the Conformation Letter of State-owned Land Transaction, China Resources Land (Wuhan) Industry Company Limited (華潤置地（武漢）實業有限公司) shall sign the State-owned Land Use Rights Grant Contract with relevant government authorities and obtain State-owned Land Use Rights Certificate for the remaining portion of the property as soon as possible.
(iii) The land premium of the property has been fully settled.

– 66 –

APPENDIX I

PROPERTY VALUATION

VALUATION CERTIFICATE

Group II – Property interests held by the Sales Group for investment

Property

Description and tenure

Details of occupancy

Capital value in the existing state as at 31 August 2010

Le Meridien Shimei Bay Beach Resort & Spa, Shimei Bay, Liji Town, Wanning City, Hainan Province, the People’s Republic of China
The property is a luxury five-star resort hotel comprising 250 guest rooms, 25 resort villas with catering, recreational and car parking facilities completed in 2008.

The property is operated as Le Meridien Hotel.

RMB890,000,000

(100% interests attributable to the Sales Group: RMB890,000,000)

The total gross floor area of the property is approximately 38,953.97 square metres.

The property occupies a site with an area of approximate 115,998.57 square metres.

The property is held under State-owned Land Use Certificate for a term expiring on 28 November 2050 for tourism use.

Notes:

Pursuant to the State-owned Land Use Right Certificates issued by the People’s Government of Wanning, Haiju Tourism Development (Hainan) Limited (海南海居旅業有限公司) has got the use rights of the site. The content is as below:

Certificate No. Use No. Wan Guo Yong(2006)110090 Tourism No. Wan Guo Yong(2006)110089 Tourism No. Wan Guo Yong(2006)110088 Tourism	Site area Expiry Date (sq.m.) 47,903.30 17 August 2041 67,422.60 30 November 2043 672.67 28 November 2050 115,998.57

According to the Construction Land Use Planning Permit No. Wan Jian Di Gui (2006) 124 issued by Wanning City Construction Bureau dated 31 December 2006. The total site area of the property is 116,000 square metres and the developer is Haiju Tourism Development (Hainan) Limited (海南海居旅業有限公司).
Pursuant to a Construction Works Commencement Permit – No. Wan Jian (2007)32 issued by Wanning City Construction Bureau dated 6 June 2007, the construction work of a development known as Le Meridien Shimei Bay Beach Resort & Spa with gross floor area of approximately 38,953.97 square metres was permitted to commence.

– 67 –

APPENDIX I

PROPERTY VALUATION

According to Construction Works Planning Permit No. Wan Jian Cheng Gui (2008)17 issued by Wanning City Planning Bureau dated 5 September 2008, the development with 38,953.97 square metres held by Haiju Tourism Development (Hainan) Limited (海南海居旅業有限公司) was permitted for construction.
The current use of the property is in compliance with the town planning use.
The major certificates and permits of the property are summarized as follows:
(i) State-owned Land Use Rights Grant Contract Yes (ii) State-owned Land Use Rights Certificate Yes (iii) Construction Land Use Planning Permit Yes (iv) Construction Project Planning Permit Yes (v) Construction Works Commencement Permit Yes (vi) Completion Construction Works Certified Report Yes (vii) Building Ownership Certificate N/A
The opinion of the PRC legal adviser on the PRC laws states that
i. Haiju Tourism Development (Hainan) Limited (海南海居旅業有限公司) has legally obtained the land use rights and the use rights of the property, and should proceed to attain the aforesaid building ownership certificate as soon as possible.

– 68 –

APPENDIX I

PROPERTY VALUATION

VALUATION CERTIFICATE

Group III – Property interests rented by the Sales Group for occupation

Property Description and tenure
1. Units 902 and 903 The property comprises Xinghai Building, two office units on level 9 Qianjin Xi Road, of a 17 storey commercial Yushan Town, building completed in Kunshan, Suzhou 2008. City, Jiangsu Province, the People’s The property has gross Republic of China floor area of approximately 166.73 square metres.

Capital value in the existing state as at 31 August Details of occupancy 2010 The property is occupied No Commercial by the Sales Group as an Value office.

The property is leased to “China Resources Land (Kunshan) Limited (華潤置地（昆山）有限公司)” for a term commencing from 1 July 2010 and expiring on 30 June 2012, at a yearly rental of RMB52,500 inclusive of management fee.

Notes:

a) The registered owner of the property is Xue Jian Jun (薛建軍).
b) We are advised that the registered owner of the property is an independent third party of the Sales Group.
c) The current use of the property is in compliance with the town planning use.
d) The opinion of the legal adviser on the PRC laws states that the aforesaid tenancy agreement is binding and China Resources Land (Kunshan) Limited has right to use the property under the PRC law and regulations though the tenancy agreement has not been registered through tenancy registration procedure.

– 69 –

APPENDIX II

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

a. As at the Latest Practicable Date, the interests and the short positions (within the meaning of the SFO) of the Directors and the chief executives of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or were required pursuant to section 352 of the SFO to be entered in the register referred to therein, or were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, were as follows:
i Interest in the Shares and underlying Shares of the Company

			Number of		Approximate
	Long position/	Number of	underlying		percentage
Name	short position	Shares	Shares(1)	Capacity	of interest(2)
Wang Yin	Long position	4,230,000	–	Beneficial owner	0.084
Jiang Wei	Long position	892,000	–	Beneficial owner	0.018
Yan Biao	Long position	1,992,000	–	Beneficial owner	0.040
Li Fuzuo	Long position	1,000,000	–	Beneficial owner	0.020
Du Wenmin	Long position	790,000	250,000	Beneficial owner	0.021
Wu Xiangdong	Long position	1,629,000	–	Beneficial owner	0.032

– 70 –

APPENDIX II

GENERAL INFORMATION

Notes:

This refers to underlying Shares of share options granted pursuant to the share option schemes of the Company. Details are as follows:

					Option
					outstanding
					as at
			Expiry Date		the Latest
			for Exercise	Exercise	Practicable
Name	Capacity	Date of Grant	of the Option	Price	Date
				HK$
Du Wenmin	Beneficial owner	1/6/2005	31/5/2015	1.23	250,000

This represents the percentage of the aggregate long positions in Shares and underlying Shares of the Company to the total issued share capital of the Company as at the Latest Practicable Date.
ii. Interest in the issued ordinary shares and underlying shares of China Resources Enterprise, Limited (“CRE”), an associated corporation of the Company

			Number of	Approximate
	Long position/	Number of	underlying	percentage of
Name	short position	shares	shares	interest(1)
Jiang Wei	Long position	240,000	–	0.010
Yan Biao	Long position	500,000	–	0.021
Du Wenmin	Long position	100,000	–	0.004

Note:

This represents the percentage of the aggregate long positions in shares and underlying shares of CRE to the total issued share capital of CRE as at the Latest Practicable Date.
iii. Interest in the issued ordinary shares and underlying shares of China Resources Gas Group Limited (“CR Gas”), an associated corporation of the Company

			Number of	Approximate
	Long position/	Number of	underlying	percentage of
Name	short position	shares	shares	interest(1)
Wu Xiangdong	Long position	45,000	–	0.003
Li Fuzuo	Long position	51,000	–	0.003
Du Wenmin	Long position	54,000	–	0.003

Note:

This represents the percentage of the aggregate long positions in shares and underlying shares of CR Gas to the total issued share capital of CR Gas as at the Latest Practicable Date.

– 71 –

APPENDIX II

GENERAL INFORMATION

iv. Interest in the issued ordinary shares and underlying shares of China Resources Power Holdings Company Limited (“CR Power”), an associated corporation of the Company

			Number of	Approximate
	Long position/	Number of	underlying	percentage of
Name	short position	shares	shares(1)	interest(2)
Wang Yin	Long position	–	427,560	0.009
Jiang Wei	Long position	840,000	570,080	0.030
Yan Biao	Long position	–	570,080	0.012
Li Fuzuo	Long position	528,000	274,860	0.017
Du Wenmin	Long position	297,000	183,240	0.010

Notes:

This refers to underlying shares of share options granted pursuant to the share option schemes of CR Power. Details are as follows:

				Option
				outstanding
				as at the
				Latest
		Date of	Exercise	Practicable
Name	Capacity	grant	Price	Date
			HK$
Wang Yin	Beneficial owner	12/11/2003(1)	2.75	122,160
		18/3/2005(2)	3.919	305,400
Jiang Wei	Beneficial owner	12/11/2003(1)	2.75	203,600
		18/3/2005(2)	3.919	366,480
Yan Biao	Beneficial owner	12/11/2003(1)	2.75	244,320
		18/3/2005(2)	3.919	325,760
Li Fuzuo	Beneficial owner	12/11/2003(1)	2.75	91,620
		18/3/2005(2)	3.919	183,240
Du Wenmin	Beneficial owner	12/11/2003(1)	2.75	183,240

Notes:

(1) Options are exercisable in 5 tranches of 20% each, from October 6, 2004, 2005, 2006, 2007 and 2008 to October 5, 2013.
(2) Options are exercisable in 5 tranches of 20% each, from March 18, 2006, 2007, 2008, 2009 and 2010 to March 17, 2015.
(3) Consideration for each of the grants mentioned above is HK$1.00.
This represents the percentage of the aggregate long positions in shares and underlying shares of CR Power to the total issued share capital of CR Power as at the Latest Practicable Date.

– 72 –

APPENDIX II

GENERAL INFORMATION

v. Interest in the issued ordinary shares and underlying shares of China Resources Microelectronics Limited (“CR Microelectronics”), an associated corporation of the Company

			Number of	Approximate
	Long position/	Number of	underlying	percentage of
Name	short position	shares	shares	interest(1)
Wu Xiangdong	Long position	1,215,000	–	0.014
Jiang Wei	Long position	537,614	–	0.006
Li Fuzuo	Long position	918,000	–	0.010
Du Wenmin	Long position	1,458,000	–	0.017

Note:

This represents the percentage of the aggregate long positions in shares and underlying shares of CR Microeletronics to the total issued share capital of CR Microelectronics as at the Latest Practicable Date.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had or was deemed to have any interest or short position in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or were required pursuant to section 352 of the SFO to be entered in the register referred to therein, or were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

b. As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have since December 31, 2009 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to or by the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to or by the Company or any of its subsidiaries.
c. As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries, which was subsisting and was significant in relation to the business of the Group.
d. None of the Directors has any service contracts with the Company or any of its subsidiaries which does not expire or is not determinable by the employer within one year without payment of compensation (other than statutory compensation).

– 73 –

APPENDIX II

GENERAL INFORMATION

e. As at the Latest Practicable Date, the Directors were not aware that any of the Directors or their respective associates has interest in any business, apart from the Group’s business, which competes or is likely to compete, either directly or indirectly, with the business of the Group which falls to be disclosed under the Listing Rules.

3. SUBSTANTIAL SHAREHOLDERS

So far as was known to any Director or chief executive of the Company, as at the Latest Practicable Date, the following persons, other than a Director or chief executive of the Company, had an interest or short position in the Shares or underlying Shares which fell to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

						Percentage of the	Percentage of the
						aggregate long/short
						position in Shares to
						the issued share
							capital of the
				Long position/	Number of	Company as at the
Name of shareholder	Capacity	Nature of interest		Short position	Shares	Latest Practicable Date
Gain Ahead Group Limited	Beneficial owner	Beneficial interest		Long position	3,521,642,519		69.89
(“Gain Ahead”)(1)
China Resources	Controlled company’s	Corporate interest		Long position	3,521,642,519		69.89
(Holdings) Company	interest
Limited(1)
CRC Bluesky Limited	Controlled company’s	Corporate interest		Long position	3,521,642,519		69.89
(“Bluesky”)(1)	interest
China Resources Co.,	Controlled company’s	Corporate interest		Long position	3,521,642,519		69.89
Limited (“CRC”)(1)	interest
China Resources National	Controlled company’s	Corporate interest		Long position	3,521,642,519		69.89
Corporation (“CRNC”)(1)	interest
JP Morgan Chase & Co.(2)	(i) Beneficial owner	(i)	Beneficial	Long position	302,873,572		6.01
			interest		(i) 12,387,065
	(ii) Investment	(ii)	Other interest	Long position	(ii) 227,516,888
	manager
	(iii) Lending agent	(iii)	Other interest	Long position	(iii) 62,969,619
	Beneficial owner	Beneficial interest		Short position	1,926,450		0.04

– 74 –

APPENDIX II

GENERAL INFORMATION

Notes:

Gain Ahead and Commotra Company Limited directly held 3,173,401,240 and 2,000 shares of the Company respectively, CRH is the sole shareholder of Gain Ahead and Commotra Company Limited. Moreover, CRH is a 100% subsidiary of Bluesky, which is in turn owned as to 100% by CRC, which is in turn held as to 99.98% by CRNC. Thus CRH, Bluesky, CRC and CRNC are deemed to be interested in an aggregate of 3,173,403,240 shares in the Company. Upon issuance of the Consideration Shares, CRH shall, through Gain Ahead, Commotra Company Limited and the Vendor (or as it may direct) hold 3,521,642,519 shares in the Company.
According to the information disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO, other than the following corporations which were held by JP Morgan Chase & Co. in the manner described below, these shares were held by JP Morgan Chase & Co. and corporations controlled directly and indirectly as to 100% by it:

	JPMorgan Chase & Co.
	Percentage interest
	(direct or indirect)
Name of Corporation	Held by JP Morgan Chase & Co.
J.P. Morgan Securities Ltd.	98.95%
China International Fund Management Co. Ltd.	49%
J.P. Morgan Whitefriars	99.99%

Save as aforesaid, as at the Latest Practicable Date, no other person had any interest in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 of Part XV of the SFO or which were recorded in the register kept by the Company under section 336 of the SFO.

4. QUALIFICATION AND CONSENT OF EXPERTS

CIMB, the independent financial adviser, is a corporation licensed to carry out type 1 (dealing in securities), type 4 (advising on securities) and type 6 (advising on corporate finance) regulated activities as defined under the SFO. CBRE, the Valuer, is the independent property valuer. Global Law Office is the PRC legal adviser.

Each of CIMB, CBRE and Global Law Office has given and has not withdrawn its written consent to the issue of this circular with copy of its letter and/or the references to its name included herein the form and context in which they respectively appear.

As at the Latest Practicable Date, each of CIMB, CBRE and Global Law Office was not interested in any Share or share in any member of the Group, nor does it have any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any Share or share in any member of the Group. As at the Latest Practicable Date, none of the aforesaid parties had any direct or indirect interests in any assets which have since December 31, 2009 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to or by the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to or by the Company or any of its subsidiaries.

– 75 –

APPENDIX II

GENERAL INFORMATION

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Company since 31 December 2009, being the date of the latest published audited financial statements of the Company.

6. GENERAL

The English text of this circular (other than the English translation of the Chinese names of the PRC entities mentioned herein) and the accompanying form of proxy shall prevail over the Chinese text.

7. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any weekday (public holidays excepted) at the head office of the Company at Room 4301, 43rd Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong up to and including the date of the EGM:

a. the Sale and Purchase Agreement;
b. the Leasing and Concessionaire Framework Agreement;
c. the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement;
d. letter from the Independent Board Committee as set out on pages 31 to 32 of this circular;
e. the letter from CIMB to the Independent Board Committee and the Independent Shareholders as set out on pages 33 to 51 of this circular;
f. the property valuation report from the Valuer as set out on pages 52 to 69 of this circular; and
g. the written consents referred to in paragraph 4 of this appendix.

– 76 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [306 x 67] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1109)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Resources Land Limited (the “Company”) will be held at 4th Floor, China Resources Building, 26 Harbour Road, Wanchai, Hong Kong on November 1, 2010 at 3 p.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolutions:

AS ORDINARY RESOLUTIONS

1. “ THAT :

(a) the conditional sale and purchase agreement (the “Sale and Purchase Agreement”) dated September 20, 2010 entered into between Central New Investments Limited (the “Vendor”) and the Company (the “Purchaser”) (a copy of which is produced to the meeting marked “A” and signed by the chairman of the meeting for the purposes of identification) in relation to, among other matters, the Acquisition (as defined in the circular (the “Circular”) of the Company to its shareholders dated October 13, 2010) (a copy of the Circular is produced to the meeting marked “B” and signed by the chairman of the meeting for the purposes of identification) be and is hereby approved, confirmed and ratified in all respects and all the transactions contemplated pursuant to the Sale and Purchase Agreement (including but not limited to the allotment and issue to Central New Investments Limited (or as it may direct) of 348,239,279 ordinary shares of HK$0.10 each in the share capital of the Company at the issue price of HK$15.8827 each credited as fully paid up and ranking pari passu with the existing issued shares of the Company (“Consideration Shares”) pursuant to the Sale and Purchase Agreement) be and are hereby approved, confirmed and ratified in all respects; and
(b) any one director of the Company or any other person authorised by the board of directors of the Company from time to time be and are hereby authorised to sign, execute, perfect and deliver and where required, affix the common seal of the Company to, all such documents, instruments and deeds, and do all such actions which are in his opinion necessary, appropriate, desirable or expedient for the implementation and completion of the Sale and Purchase Agreement, the allotment and issue of the Consideration Shares to Central New Investments Limited (or as it may direct) and all other transactions contemplated under or incidental to the Sale and Purchase Agreement and all other matters

– 77 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

incidental thereto or in connection therewith and to agree to the variation and waiver of any of the matters relating thereto that are, in his opinion, appropriate, desirable or expedient in the context of the Acquisition and are in the best interests of the Company.”

“ THAT :
(a) the provision of construction services, decoration services and furniture services framework agreement (the “Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement”) dated September 20, 2010 entered into between the Company and China Resources (Holdings) Company Limited (a copy of which is produced to the meeting marked “C” and signed by the chairman of the meeting for the purposes of identification) in relation to, among other matters, the Continuing Connected Transactions (as defined in the Circular of the Company to its shareholders dated October 13, 2010) be and is hereby approved, confirmed and ratified in all respects and all the transactions contemplated pursuant to the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement, including the Construction Caps, Decoration Caps and the Furniture Caps, be and are hereby approved, confirmed and ratified in all respects; and
(b) any one director of the Company or any other person authorised by the board of directors of the Company from time to time be and are hereby authorised to sign, execute, perfect and deliver and where required, affix the common seal of the Company to, all such documents, instruments and deeds, and do all such actions which are in his opinion necessary, appropriate, desirable or expedient for the implementation and completion of the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement and all other transactions contemplated under or incidental to the Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement and all other matters incidental thereto or in connection therewith and to agree to the variation and waiver of any of the matters relating thereto that are, in his opinion, appropriate, desirable or expedient in the context of the Continuing Connected Transactions and are in the best interests of the Company.”

Hong Kong, October 13, 2010

Notes:

Any member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy needs not be a member of the Company.

In order to be valid, a form of proxy, together with any power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be deposited at Tricor Standard Limited, the branch share registrar of the Company, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

– 78 –

AI assistant

Folangsi Co., Ltd — Proxy Solicitation & Information Statement 2010

50629_rns_2010-10-12_7a79d5b0-ee93-40ca-a1a4-22d18381c158.pdf

CIMB Securities (HK) Limited

CONTENTS

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES in relation to PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED

(A) The Sale and Purchase Agreement

Sale Shares

Sale and Purchase Consideration

Conditions precedent

Deed of Indemnity

Guarantee

Sale and Purchase Completion

Hainan Shimei Bay Site ( 海南石梅灣項目 )

Wuhan Oak Bay Site ( 武漢橡樹灣項目 )

Suzhou Kunshan Site ( 蘇州昆山項目 )

(C) Basis of the Sale and Purchase Consideration

(D) Consideration Shares

(E) Reasons for and benefits of the Acquisition

(F) Financial effects of the Acquisition

Net book value

Earnings

Working capital

(G) Listing Rules Implications

II. RENEWAL OF CERTAIN CONTINUING CONNECTED TRANSACTIONS

(A) The Leasing and Concessionaire Framework Agreement

Reasons for and benefits of the transactions

Listing Rules implications

(B) The Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement

The Construction Caps

The Decoration Caps

The Furniture Caps

Reasons for and benefits of the Continuing Connected Transactions

Listing Rules implications

III. DISPOSAL OF A 40.0% INTEREST IN A PROPERTY PROJECT IN HANGZHOU

(A) The Charmlink Transfer Agreement

(B) Information on Charmlink and Hangzhou Runhong Real Estate

(C) Basis of the Charmlink Transfer Consideration

(D) Reasons for and benefits of the Charmlink Transfer

(E) Listing Rules implications

IV. GENERAL

V. EXTRAORDINARY GENERAL MEETING

LETTER FROM THE BOARD

(Stock Code: 1109)

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES in relation to PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED (2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

CIMB Securities (HK) Limited

(1) DISCLOSEABLE AND CONNECTED TRANSACTION INVOLVING ISSUE OF NEW SHARES IN RELATION TO PROPOSED ACQUISITION OF CERTAIN PROPERTIES OF CHINA RESOURCES (HOLDINGS) COMPANY LIMITED; AND

(2) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

LETTER FROM CIMB

PRINCIPAL FACTORS AND REASONS CONSIDERED

(I) THE ACQUISITION

1. Background to and reasons for the Acquisition

2. Business operation and financial performance of the Target Group

Hainan Shimei Bay Site ( 海南石梅灣項目 )

Wuhan Oak Bay Site ( 武漢橡樹灣項目 )

Suzhou Kunshan Site ( 蘇州昆山項目 )

Financial Information of the Target Group

3. Overview of the economic development and the property market in locations of the Target Group

The Hainan market

The Wuhan market

The Suzhou market

4. Consideration and payment term

Basis of consideration

Payment Terms

Views

(ii) Cash Consideration

5. Other terms

6. Financial effect

Net book value

Earnings

Working capital

RECOMMENDATION

LETTER FROM CIMB

(II) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

1. Background and reasons

LETTER FROM CIMB

Views

2. The Provision of Construction Services, Decoration Services and Furniture Services Framework Agreement

The Proposed Caps

Folangsi Co., Ltd Proxy Solicitation & Information Statement 2010