Shui On Land Limited — Proxy Solicitation & Information Statement 2015

Aug 14, 2015

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 licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Shui On Land Limited, you should at once hand this circular to the purchaser(s) or the transferee(s) or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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.

Shui On Land Limited 瑞安房地產有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 272)

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL IN BRIXWORTH INTERNATIONAL LIMITED

Sole Financial Advisor

A letter from the Board is set out on pages 4 to 14 of this circular.

* For identification purposes only

14 August 2015

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The Corporate Avenue 1 & 2 Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Undertaking from the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Licence Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Property Management and Asset Management Services . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Bridge Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Employment Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Financial Information on the Target Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Reasons for and Benefits of the Disposal and Use of Proceeds . . . . . . . . . . . . . . . . . . . .	11
Financial Effects of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Financial and Trading Prospects of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Information on the Company, the Purchaser and the Purchaser Guarantor . . . . . . . . . . . .	13
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix I — Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II — Property Valuation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1

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DEFINITIONS

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

• “associate(s)”

has the meaning ascribed to it under the Listing Rules;

• “Atlantic Best”

Atlantic Best Limited, a company incorporated under the laws of Hong Kong with limited liability and a direct wholly-owned subsidiary of the Target;

“Board”

the board of Directors of the Company;

• “Business Day(s)”

a day (other than a Saturday or Sunday or public holiday in Hong Kong, the PRC, New York or BVI or any day on which a tropical cyclone warning no. 8 or above or a “black” rain warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.) on which banks are open in Hong Kong, the PRC, New York and BVI for general commercial business and dealings in inter-bank deposits and payments can take place;

• “BVI”

the British Virgin Islands;

• “Closing”

• completion of the Disposal in accordance with the Sale and Purchase Agreement;

“Closing Statement”

the statement showing the adjusted assets and liabilities of the Target Group Companies as at Closing which is to be prepared by the Seller within 20 Business Days of Closing and subject to audit by PricewaterhouseCoopers on the basis of a joint engagement by the Seller and the Purchaser;

“Company”

Shui On Land Limited, a company incorporated in the Cayman Islands, whose Shares are listed on the Main Board of the Stock Exchange (stock code: 00272);

• “connected person(s)”

has the meaning ascribed to it under the Listing Rules;

• “Corporate Avenue 1 & 2 Property”

the real property or properties which are located at No. 202, Hu Bin Road, No. 222, Hu Bin Road and No. 333, South Huang Pi Road, Shanghai, the PRC;

• “Corporate Avenue 3 Property”

the real property or properties which are located at No. 168, Hu Bin Road, Shanghai, the PRC;

• “Deposit”

has the meaning given to it under the section headed “2. Sale and Purchase Agreement — (d) Consideration” of this circular;

“Directors”

the directors of the Company;

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DEFINITIONS

“Disposal”	the disposal of the Sale Share to the Purchaser in accordance
	with the Sale and Purchase Agreement;
“Estimated Consideration”	has the meaning given to it under the section headed “2. Sale
	and Purchase Agreement — (d) Consideration” of this
	circular;
“Final Consideration”	has the meaning given to it under the section headed “2. Sale
	and Purchase Agreement — (d) Consideration” of this
	circular;
“Group”	the Company and its subsidiaries;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“Latest Practicable Date”	12 August 2015, being the latest practicable date for prior to
	the printing of this circular for the purpose of ascertaining
	certain information for inclusion in this circular;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“PRC”	the People’s Republic of China, for the purpose of this
	circular, excluding Hong Kong, Macao Special
	Administrative Region of the PRC and Taiwan;
“Purchaser”	Capital Gainer Limited, a company incorporated in the BVI
	and an indirect wholly-owned subsidiary of The Link REIT;
“Purchaser Guarantor”	The Link Properties Limited, a company incorporated in the
	Cayman Islands and an indirect wholly-owned subsidiary of
	The Link REIT;
“RMB”	Renminbi, the lawful currency of the PRC;
“Sale and Purchase Agreement”	the sale and purchase agreement dated 23 July 2015 entered
	into between the Seller, the Seller Guarantor, the Purchaser
	and the Purchaser Guarantor;
“Sale Share”	one ordinary share of par value of US$1.00 in the issued share
	capital of the Target;
“Seller”	Interchina International Limited, a company incorporated
	under the laws of the BVI and an indirect subsidiary of the
	Company;

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DEFINITIONS

“Seller Guarantor”	China Xintiandi Holding Company Limited,	a company
	incorporated in the Cayman Islands and an indirect subsidiary
	of the Company;
“SFC”	the Securities and Futures Commission of Hong	Kong;
“SFO”	the Securities and Futures Ordinance (Chapter	571 of the
	Laws of Hong Kong);
“Shanghai Xing Bang”	Shanghai Xing Bang Properties Co., Ltd. (上海興邦房地產有
	限公司), a company incorporated in the PRC with limited
	liability and a direct wholly-owned subsidiary	of Atlantic
	Best;
“Shareholder(s)”	the holder(s) of the Shares;
“Shares”	the ordinary shares of the Company with nominal value of
	US$0.0025 each;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“subsidiary(ies)”	has the meaning ascribed to it under the Listing	Rules;
“Target”	Brixworth International Limited, a company incorporated
	under the laws of the BVI, which is an indirect subsidiary of
	the Company;
“Target Group”	the Target, Atlantic Best and Shanghai Xing Bang;
“The Link REIT”	The Link Real Estate Investment Trust, a	collective
	investment scheme authorised under section 104	of the SFO,
	whose units are listed on the Main Board of the Stock
	Exchange (stock code: 00823);
“US$”	United States dollars, the lawful currency of the United States
	of America; and
“%”	per cent.

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LETTER FROM THE BOARD

Shui On Land Limited 瑞安房地產有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 272)

Executive Directors: Mr. Vincent H. S. LO (Chairman) Mr. Frankie Y. L. WONG

Independent Non-executive Directors: Sir John R. H. BOND Dr. William K. L. FUNG Professor Gary C. BIDDLE Dr. Roger L. McCARTHY Mr. David J. SHAW

Registered office: 190 Elgin Avenue George Town Grand Cayman KY1-9005 Cayman Islands

Principal place of business in Hong Kong: 34th Floor, Shui On Centre 6-8 Harbour Road Wan Chai Hong Kong

14 August 2015

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL IN BRIXWORTH INTERNATIONAL LIMITED

1. INTRODUCTION

The Board refers to the announcement of the Company dated 24 July 2015 in relation to the Disposal.

Interchina International Limited (as seller) and China Xintiandi Holding Company Limited (as seller guarantor), both being indirect subsidiaries of the Company, entered into a sale and purchase

* For identification purposes only

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LETTER FROM THE BOARD

agreement with Capital Gainer Limited (as purchaser) and The Link Properties Limited (as purchaser guarantor), both being indirect wholly-owned subsidiaries of The Link REIT, in relation to the sale of the entire issued share capital of Brixworth International Limited, which indirectly owns the Corporate Avenue 1 & 2 Property in Shanghai, the PRC.

On 24 July 2015, the Company obtained the written approval of a closely allied group of Shareholders comprising Shui On Properties Limited, Shui On Investment Company Limited, Chester International Cayman Limited, Lanvic Limited, Boswell Limited, Merchant Treasure Limited and Doreturn Limited holding in aggregate approximately 56.78% of the issued share capital of the Company, in lieu of holding a general meeting to approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement pursuant to Rule 14.44 of the Listing Rules. Accordingly, no general meeting is required to be convened to approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement.

The main purpose of this circular is to provide you with, among other things, (i) further information regarding the Disposal; (ii) the financial information of the Group and (iii) the independent valuation report on the Corporate Avenue 1 & 2 Property.

2. SALE AND PURCHASE AGREEMENT

(a) Date

23 July 2015

(b) Parties

• (1) Seller: Interchina International Limited

• (2) Seller Guarantor: China Xintiandi Holding Company Limited

• (3) Purchaser: Capital Gainer Limited

• (4) Purchaser Guarantor: The Link Properties Limited

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchaser and the Purchaser Guarantor, and their ultimate beneficial owners are third parties independent of the Company and its connected persons.

(c) Transaction

The Seller has agreed to sell and the Purchaser has agreed to purchase, on Closing, the Sale Share representing the entire issued share capital of the Target (being Brixworth International Limited).

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LETTER FROM THE BOARD

The Target is an investment holding company, which through its wholly-owned subsidiaries, Atlantic Best and Shanghai Xing Bang, indirectly owns the Corporate Avenue 1 & 2 Property in Shanghai, the PRC.

(d) Consideration

The final consideration for the Disposal (the “ Final Consideration ”) will be an amount (in RMB) equal to:

• (1) RMB6,600,860,000 (being the agreed unencumbered value attributed by the parties to the Corporate Avenue 1 & 2 Property at Closing and equivalent to a price of approximately RMB79,380 per square metre for the gross floor area of 83,155 square metres in respect of the retail and office portion of the Corporate Avenue 1 & 2 Property);

• (2) less the adjusted liabilities of the Target Group as at the date of Closing determined in the Closing Statement; and

• (3) plus the adjusted assets of the Target Group as at the date of Closing determined in the Closing Statement.

The Final Consideration was determined based on arm’s length negotiations between the parties after taking into account (i) the premium quality, strategic location and rental profile of the Corporate Avenue 1 & 2 Property; (ii) the prevailing market conditions in Shanghai with reference to recent comparable transactions in Shanghai, PRC which are in the range of RMB48,000 to RMB80,000 per square metre; (iii) the proposals and feedback received from a competitive auction sale process in relation to the Corporate Avenue 1 & 2 Property run on behalf of the Company by its financial advisor, Standard Chartered Bank (Hong Kong) Limited and (iv) the independent valuation of the Corporate Avenue 1 & 2 Property in existing state at 30 June 2015 carried out by Knight Frank Petty Limited, the independent property valuer appointed by the Company, of RMB6,448,600,000. The agreed value attributed by the parties to the Corporate Avenue 1 & 2 Property at Closing (being RMB6,600,860,000) represents a premium of approximately 2.4% over the independent valuation of the Corporate Avenue 1 & 2 Property at 30 June 2015.

For the purpose of determining the payments to be made in connection with the Disposal at Closing, the parties have agreed an estimate of RMB6,625,536,002 for the Final Consideration (the “ Estimated Consideration ”) that will then be subject to a post-Closing adjustment as described below. The Estimated Consideration represents an excess of RMB865,536,002 over the unaudited consolidated net assets of the Target Group at 30 June 2015.

The Estimated Consideration will be settled as follows:

• (1) Deposit : Within three Business Days after the date of the Sale and Purchase Agreement, the Purchaser has paid in US$ the US$ equivalent of RMB993,830,400 (being 15% of the Estimated Consideration) into an escrow account (the “ Deposit ”). The Deposit will be released to the Seller at or within one Business Day after Closing as partial payment of the Estimated Consideration.

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LETTER FROM THE BOARD

• (2) Remaining consideration amount: At Closing, the Purchaser will pay in cash to the Seller an amount in US$ which is the US$ equivalent to 85% of the Estimated Consideration less RMB633,794,100, which is to be retained in an escrow account for the purpose of paying any applicable PRC taxes in respect of the Disposal. If the amount held in escrow exceeds any such tax payable, such excess shall be released to the Seller. If the amount held in escrow is insufficient to cover any such tax payable, the Seller shall pay the amount of such shortfall to the escrow account for the purpose of paying the shortfall.

At Closing, the Seller shall at its sole cost and expense ensure that the Target Group has repaid all third party loans in full such that all third party rights in respect of the Corporate Avenue 1 & 2 Property, the Sale Share and the Target Group will have been released on and from Closing.

Upon finalisation of the Closing Statement, if the Final Consideration exceeds the Estimated Consideration, then the amount of the excess will be paid in cash by the Purchaser to the Seller, and if the Final Consideration is less than the Estimated Consideration then the amount of the shortfall will be paid in cash by the Seller to the Purchaser. Any such post-Closing adjustment payment is not subject to any cap and is to be paid on or before the 14th Business Day following the determination of such amount in accordance with the Closing Statement. The management of the Company do not expect that there will be any material difference between the Estimated Consideration and the Final Consideration.

The Company will make an announcement when the Final Consideration has been determined.

(e) Conditions

Closing is conditional upon the following conditions having been fulfilled (or waived in accordance with the Sale and Purchase Agreement) on or before Closing:

• (1) the approval of the Disposal by the Shareholders by way of written shareholders’ approval in accordance with the requirements of Rule 14.44 of the Listing Rules and such approval not having been revoked prior to Closing;

• (2) there being no compulsory acquisition or resumption of the Corporate Avenue 1 & 2 Property or any part of it which results in or may reasonably be expected to result in a material adverse change, and no notice of such intended compulsory acquisition or resumption having been given by any governmental entity;

• (3) there being (i) no breach of any of the fundamental warranties given by the Seller and (ii) no breach of any other warranties given by the Seller which (whether alone or in aggregate with other breaches of warranties given by the Seller) result(s) in or may reasonably be expected to result in (save for certain exceptions) a material adverse change on the business, operations, assets, liabilities or financial condition of the Target Group taken as a whole or the Corporate Avenue 1 & 2 Property; and

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LETTER FROM THE BOARD

• (4) during the period between the signing of the Sale and Purchase Agreement and Closing, no material part of the Corporate Avenue 1 & 2 Property is damaged or destroyed or becoming a dangerous building according to assessment by the relevant PRC governmental entity. For the purpose of this condition (4), “ material part ” refers to such part(s) of the Corporate Avenue 1 & 2 Property which has/have a total lettable area of 25% or more of the total lettable area of the Corporate Avenue 1 & 2 Property.

At the date of this circular, condition (1) above has been fulfilled. The conditions (2) to (4) above may be waived by the Purchaser.

(f) Closing

Subject to the fulfilment (or waiver) of such conditions precedent, closing of the Disposal is expected to take place on 24 August 2015 but may be extended to 31 August 2015 by the Purchaser serving written notice on the Seller on or before 21 August 2015.

Following Closing, the Seller will no longer have any shareholding interests in the Target and the Target Group will cease to be the subsidiaries of the Company.

(g) Termination

If the Sale and Purchase Agreement is terminated due to non-fulfilment of any of the conditions precedent or the Seller’s failure to fully comply with its material obligations at Closing, the Deposit will be returned to the Purchaser together with any accrued interest and the Seller will pay to the Purchaser a break up fee of HK$5,000,000 to cover professional fees incurred by the Purchaser in connection with the Disposal.

If the Sale and Purchase Agreement is terminated due to the Purchaser’s failure to fully comply with its material obligations at Closing (and without prejudice to the Seller’s other rights), the Deposit will be forfeited to the Seller together with any accrued interest.

(h) Guarantees

Pursuant to the Sale and Purchase Agreement, (i) the Seller Guarantor has agreed to guarantee the Seller’s obligations and undertakings under the Sale and Purchase Agreement (and related transaction documents) and (ii) the Purchaser Guarantor has agreed to guarantee the payment obligations of the Purchaser under the Sale and Purchase Agreement.

3. THE CORPORATE AVENUE 1 & 2 PROPERTY

The Corporate Avenue 1 & 2 Property comprise two Premium Grade A office towers known as “Corporate Avenue 1” and “Corporate Avenue 2” and a connecting retail podium and pavilion with street shops and carparks, which are located at No. 202, Hu Bin Road, No. 222, Hu Bin Road and No. 333, South Huang Pi Road, Shanghai, the PRC.

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LETTER FROM THE BOARD

4. UNDERTAKING FROM THE COMPANY

On 23 July 2015, the Company, the Seller Guarantor and the Purchaser entered into an undertaking agreement pursuant to which the Company has undertaken to provide sufficient funds to the Seller Guarantor as required to enable the Seller Guarantor to maintain a minimum consolidated net asset value of at least RMB7,000,000,000 (an amount equal to 105.65% of the Estimated Consideration) for a period of two years from the date of Closing.

The Company has provided this undertaking for the purpose of further reinforcing the guarantee provided by the Seller Guarantor to the Purchaser in respect of the Seller’s obligations and undertakings under the Sale and Purchase Agreement.

The undertaking will automatically terminate upon the earliest of:

• (1) two years from the date of Closing;

• (2) any direct or indirect disposal of any interest in the Purchaser, the Target or the Corporate Avenue 1 & 2 Property by The Link Holdings Limited, provided that this shall not apply where the Purchaser or the Target will remain a direct or indirect subsidiary of The Link Holdings Limited after such disposal of the Purchaser or the Target or where the Corporate Avenue 1 & 2 Property remains in the ownership of a direct or indirect subsidiary of The Link Holdings Limited after such disposal of the Corporate Avenue 1 & 2 Property; or

• (3) a public listing of the Seller Guarantor, any of its subsidiary or any of its direct or indirect holding company on the Stock Exchange or any internationally recognized stock exchange, provided that the subsidiary or such direct or indirect holding company of the Seller Guarantor has previously entered into a deed of guarantee assuming all the obligations of the Seller Guarantor under the Sale and Purchase Agreement (and related transaction documents).

The commercial terms of the undertaking were negotiated on an arms’ length basis by the parties in light of, among other things, the time limitation periods that were agreed to apply to certain of the contractual protections provided by the Seller to the Purchaser under the Sale and Purchase Agreement and also taking into account the value agreed to be attributed to the Corporate Avenue 1 & 2 Property for the purpose of the Final Consideration (being RMB6,600,860,000). In the context of the Disposal, the Directors are the view that the terms of the undertaking are fair and reasonable and in the interests of the Company, taking into account the Company’s plans for the Seller Guarantor over the period of the undertaking and the Seller Guarantor’s current property and development portfolio.

5. LICENCE AGREEMENT

At Closing, Sky Link (Hong Kong) Limited, an indirect subsidiary of the Company, will enter into a licence agreement with Shanghai Xing Bang under which the “CORPORATE AVENUE 企業天地” brand will be licensed to Shanghai Xing Bang on a royalty-free basis for use in respect of

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LETTER FROM THE BOARD

the Corporate Avenue 1 & 2 Property for an initial term of two years, automatically renewable each year thereafter up to a total term of ten years. The terms of this licence were negotiated on an arms’ length basis between the parties in the context of the Disposal and taking into account the consideration payable by the Purchaser under the Sale And Purchase Agreement.

6. PROPERTY MANAGEMENT AND ASSET MANAGEMENT SERVICES

Pursuant to the Sale and Purchase Agreement, the Seller and the Purchaser have agreed that affiliates of the Company will assist with the handover of the Corporate Avenue 1 & 2 Property by providing transitional asset management and property management services to Shanghai Xing Bang pursuant to the asset management agreement and the property management agreement to be entered into between Shanghai Xing Bang and any such affiliates at Closing.

The management fee payable under the transitional asset management agreement is RMB300,000 for the entire initial term while the management fees payable under the transitional property management agreement comprise monthly payments of (i) RMB137,000 in respect of the office and retail portion of the Corporate Avenue 1 & 2 Property and (ii) RMB20 for each car parking space. These management fees were negotiated on an arms’ length basis between the parties, in the context of the Disposal, having regard to the terms of the existing asset management and property management agreements, the transitional nature of such services, the agreed scope of services to be provided, manpower required and headquarter services to be shared under each agreement.

Each of the asset management agreement and the property management agreement will terminate on 31 December 2015, subject to the parties agreeing before 1 December 2015 to extend such expiry term.

7. BRIDGE AGREEMENT

Pursuant to the Sale and Purchase Agreement, Shanghai Xing Bang will enter into an agreement in relation to the construction of a bridge connecting the Corporate Avenue 1 & 2 Property and the Corporate Avenue 3 Property, which is currently under development and is owned by Shanghai Le Fu Properties Co., Ltd. (上海樂復房地產有限公司) (an indirect subsidiary of the Company) (“ Shanghai Le Fu ”).

The construction cost of this bridge has already been provisioned in the accounts of Shanghai Le Fu in relation to the development of the Corporate Avenue 3 Property, and so the bridge agreement requires Shanghai Le Fu to continue to build and fund the construction cost of the bridge as planned. Under the bridge agreement, the future maintenance costs of the bridge will be shared equally between Shanghai Xing Bang and Shanghai Le Fu, given that both properties will enjoy the benefits of the bridge.

8. EMPLOYMENT ARRANGEMENTS

At or prior to Closing, the employment contracts of the existing employees of the Shanghai Xing Bang will be terminated and they will be transferred to the Group.

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LETTER FROM THE BOARD

9. FINANCIAL INFORMATION ON THE TARGET GROUP

At 30 June 2015, the unaudited consolidated net assets of the Target Group were RMB 5,760,000,000, of which a fair valuation gain net of tax amounting to RMB1,232,700,000 was recorded at 30 June 2015.

For the financial year ended 31 December 2014, the audited consolidated net asset value, turnover, profits both before and after taxation of the Target Group were approximately RMB4,464,000,000, RMB253,000,000, RMB394,000,000 and RMB286,000,000 respectively.

For the financial year ended 31 December 2013, the audited consolidated net asset value, turnover, profits both before and after taxation of the Target Group were approximately RMB4,179,000,000, RMB245,000,000, RMB367,000,000 and RMB283,000,000 respectively.

10. REASONS FOR AND BENEFITS OF THE DISPOSAL AND USE OF PROCEEDS

In order to accelerate overall asset turnover and realisation of the value of assets owned, the Company’s strategy is to divest commercial properties at the right price and time. The Company considers that the Disposal represents an opportunity for the Group to realise its investment in the Corporate Avenue 1 & 2 Property at an attractive value in the prevailing market conditions, in line with the Company’s strategic monetisation plan for its property portfolio.

After paying down debt and deducting the transaction costs and expenses, the Group will record net proceeds of approximately RMB4,284,000,000 upon Closing, which in turn will reduce the Group’s net gearing by 15.6% with reference to the consolidated net asset value of the Company as at 31 December 2014. The Company intends to use the net proceeds for the Group’s financial purposes to repay existing indebtedness with near maturities and the remainder to fund the general working capital purpose. The Directors (including the independent non-executive Directors) are of the view that the terms of the Disposal are on normal commercial terms and fair and reasonable and in the interests of the Group and the Shareholders as a whole.

11. FINANCIAL EFFECTS OF THE DISPOSAL

Earnings

After deducting (i) the estimated consolidated net assets of the Target Group at Closing of approximately RMB5,020,000,000 and (ii) the estimated tax and transaction expenses of approximately RMB683,000,000 from the Estimated Consideration, the Group expects that there will be a gain of approximately RMB922,000,000 arising from the Disposal.

After taking into account the fair valuation gain of RMB1,232,700,000 recorded at 30 June 2015, the estimated total net profit contributed to the Group from the Disposal of the Target Group will be approximately RMB2,154,700,000.

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LETTER FROM THE BOARD

Assets and liabilities

Following the Disposal, the Target Group will cease to be the subsidiaries of the Company and thus the assets, liabilities and financial results of the Target Group will no longer be consolidated into the Group. Accordingly, upon Closing, the total assets and liabilities of the Group will be reduced by the assets and liabilities attributable to the Target Group.

12. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is accelerating its overall asset turnover and will continue to realise the value of existing assets. It is the Group’s strategy to divest commercial properties in its portfolio that are mature and stabilized or are non-core assets at the right time and price. Increasing asset turnover will allow the Group to unlock the value of such assets to increase profitability and help to strengthen the Group’s cash flow and reduce debt.

In relation to the development of the Group’s residential properties, construction works commenced immediately after the completion of the relocation of two residential sites situated at the Shanghai Rui Hong Xing Cheng project and the Shanghai Taipingqiao project in mid 2014. Pre-sales of Rui Hong Xin Cheng Phase 6 and Taipingqiao Lakeville Phase 4 are scheduled to take place in the fourth quarter of year 2015 according to the latest development plan. The Group will continue to launch new phases of residential properties in other projects located in Wuhan, Chongqing, Foshan and Dalian, the PRC.

The Directors are of the view that the PRC real estate market will continue to develop and grow in the long run. Together with the Group’s prudent financial and capital positions, this will lay a solid foundation for the Group’s sustainable development. The Directors remain positive on the long term prospects of the Group.

13. LISTING RULES IMPLICATIONS

As the highest of the applicable percentage ratios in respect of the Disposal exceeds 25% but is less than 75%, the Disposal constituted a major transaction of the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no Shareholder has a material interest in the Disposal and accordingly, no Shareholder is required to abstain from voting if the Company were to convene a general meeting to approve the Disposal.

Shui On Properties Limited, Shui On Investment Company Limited, Chester International Cayman Limited, Lanvic Limited, Boswell Limited, Merchant Treasure Limited and Doreturn Limited, which are controlled by Shui On Company Limited and which together constitute a closely allied

— 12 —

LETTER FROM THE BOARD

group of Shareholders, held 1,198,103,792 Shares, 1,450,808,826 Shares, 183,503,493 Shares, 573,333,333 Shares, 708,448,322 Shares, 150,000,000 Shares, and 293,319,781 Shares, respectively, representing in aggregate approximately 56.78% of the issued share capital of the Company on 24 July 2015.

On 24 July 2015, the Company obtained the written approval of Shui On Properties Limited, Shui On Investment Company Limited, Chester International Cayman Limited, Lanvic Limited, Boswell Limited, Merchant Treasure Limited and Doreturn Limited in lieu of holding a general meeting to approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement pursuant to Rule 14.44 of the Listing Rules. Accordingly, no general meeting was required to be convened to approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement.

14. INFORMATION ON THE COMPANY, THE PURCHASER AND THE PURCHASER GUARANTOR

The Company, through its subsidiaries and associates, is one of the leading property developers in the PRC. The Group principally engages in the development, sale, leasing, management and ownership of high quality residential, office, retail, entertainment and cultural properties in the PRC.

The Purchaser is a company incorporated in the BVI and a special purpose vehicle indirectly and wholly-owned by The Link REIT. The Purchaser currently has no other business activity and it will solely be used to hold the Target and hence the Corporate Avenue 1 & 2 Property upon Closing.

The Purchaser Guarantor is a company incorporated in the Cayman Islands and a special purpose vehicle indirectly and wholly-owned by The Link REIT.

The Link REIT is a collective investment scheme authorised by the SFC and the units of the Link REIT are listed on the Main Board of the Stock Exchange (stock code: 00823). HSBC Institutional Trust Services (Asia) Limited is the trustee of The Link REIT.

The Link REIT, managed by The Link Management Limited, currently has a portfolio consisting of properties with an internal floor area of approximately 11,000,000 square feet of retail space and approximately 77,000 car parking spaces in Hong Kong. All of its properties, except EC Mall in Beijing, the PRC and its related car parks, are located in Hong Kong.

15. RECOMMENDATION

The Directors consider that the Disposal is on normal commercial terms and in the usual course of business of the Group, and that the terms and conditions of the Sale and Purchase Agreement are fair and reasonable and in the interests of the Group and the Shareholders as a whole and would recommend the Shareholders to vote in favour of the resolutions to approve the Disposal if it had been necessary to hold a general meeting for such purpose.

— 13 —

LETTER FROM THE BOARD

16. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

By Order of the Board Shui On Land Limited Vincent H. S. LO Chairman

— 14 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Financial Information of the Group for the three years ended 31 December 2014

The audited consolidated financial statements of the Group (i) for the year ended 31 December 2014 is disclosed in the 2014 annual report of the Company published on 22 April 2015, from pages 115 to 217; (ii) for the year ended 31 December 2013 is disclosed in the 2013 annual report of the Company published on 11 April 2014, from pages 105 to 195; and (iii) for the year ended 31 December 2012 is disclosed in the 2012 annual report of the Company published on 19 April 2013 from pages 129 to 207, all of which have been published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the website of the Company (www.shuionland.com).

Statement of Indebtedness

Borrowings

As at the close of business on 30 June 2015, being the latest practicable date for the purpose of determining this indebtedness of the Group prior to the printing of this circular, the Group had total borrowings amounting to approximately RMB49,185 million, details of which are as follows:

• (i) the liability component of convertible bonds with the carrying amount of RMB432 million (the corresponding principal amount is RMB434 million) which were unsecured;

• (ii) senior notes with the aggregate carrying amount of RMB13,895 million (the aggregate principal amount was approximately RMB14,048 million) which were unsecured and guaranteed;

• (iii) bank and other borrowings with the aggregate carrying amount of approximately RMB33,969 million (the aggregate principal amount was approximately RMB34,131 million), of which RMB4,036 million (the corresponding principal amount of approximately RMB4,065 million) were unsecured, and RMB29,933 million (the corresponding principal amount was approximately RMB30,066 million) were secured by certain assets of the Group. Amongst these bank and other borrowings, borrowings with the aggregate carrying amount of RMB12,962 million (the corresponding aggregate principal amount amounted to RMB13,088 million) were guaranteed;

• (iv) loans from non-controlling shareholders of subsidiaries with carrying amount of RMB72 million (the aggregate principal amount of RMB84 million) which were unsecured;

• (v) amounts due to related companies with the aggregate principal amount of RMB808 million which were unsecured; and

• (vi) amounts due to non-controlling shareholders of subsidiaries with the aggregate principal amount of RMB9 million which were unsecured.

— I-1 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Mortgages and charge

As at 30 June 2015, the Group’s secured bank borrowings were secured by certain of the Group’s bank deposits, investment properties, property, plant and equipment, prepaid lease payments, properties under development for sale, properties held for sale, accounts receivables, benefits accrued to the relevant properties and equity interests in certain subsidiaries.

Contingent liabilities

In addition, as at 30 June 2015, the Group had the following contingent liabilities:

• (i) Pursuant to an agreement entered into with the district government (the “ Hongkou Government ”) and the Education Authority of the Hongkou District, Shanghai, the PRC on 31 July 2002, guarantees of no more than RMB324 million will be granted by the Group to support bank borrowings arranged in the name of a company to be nominated by the Hongkou Government, as part of the financial arrangement for the site clearance work in relation to the development of a parcel of land. As at 30 June 2015, such arrangement has not taken place.

• (ii) The Group has provided a guarantee to (i) a joint venture which was formed between Richcoast and Mitsui Fudosan Residential Co., Ltd. (“ Mitsui ”, a non-controlling shareholder of an associate’s subsidiary) and (ii) Mitsui for an aggregate amount not exceeding RMB128 million in respect of Richcoast’s payment obligations to the joint venture and Mitsui.

• (iii) The Group has issued a financial guarantee to an independent third party in respect of an outstanding amount due from a subsidiary of an associate. The maximum amount that could be paid by the Group if the guarantee was called upon is RMB149 million.

Liabilities arising from rental guarantee arrangements

The Group disposed of a number of properties to independent third parties (“ purchasers ”) in previous years. As part of the disposal, the Group also agreed to provide the purchasers with rental guarantees whereby the Group agreed to compensate the purchasers on a yearly basis, as follows:

• (i) Rental guarantee arrangement 1 - the compensation is calculated from the date when the first instalment was received till January 2019 which could be further extended by the purchaser for three times, each for a one-year period, when certain conditions are met — the shortfall between 8% of the consideration receivable by the Group from the purchaser and the net operating income to be generated by the property.

• (ii) Rental guarantee arrangement 2 - the compensation is calculated from the date when the first instalment was received till January 2017 — the shortfall between 8% of the consideration receivable by the Group from the purchaser and the net operating income to be generated by the properties.

— I-2 —

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 30 June 2015, the aggregate fair value of financial liabilities arising from these rental guarantee arrangements amounted to RMB524 million. In respect of the guarantee period from 30 June 2015 and beyond, the aggregate maximum amount the Group could be required to settle as if there were no operating income to be generated by the disposed properties was RMB1,471 million.

Save as aforementioned and apart from intra-group liabilities and normal trade business, at the close of business on 30 June 2015, the Group did not have any other outstanding borrowings, loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance leases, hire purchase commitments, guarantees or other material contingent liabilities.

Working Capital

The Directors are of the opinion that, after taking into account the net cash proceeds to be received from the Disposal, the present financial resources available to the Group including but not limited to revenue generated by its principal operations and funds through disposal of properties, cash and cash equivalents on hand, other banking facilities and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its business for the next twelve months from the date of this circular.

— I-3 —

PROPERTY VALUATION REPORT

APPENDIX II

The following is a text of the letter and valuation report prepared for the purpose of incorporation in this circular issued by Knight Frank Petty Limited, an independent property valuer, in connection with the valuation of the Corporate Avenue 1 & 2 Property as at 30 June 2015.

Knight Frank 4/F, Shui On Centre 6-8 Harbour Road Wanchai Hong Kong

T +852 2840 1177 F +852 2840 0600 www.knightfrank.com.hk

The Directors Shanghai Xing Bang Properties Co., Ltd. 26/F, Shui On Plaza 333 Huai Hai Zhong Road Shanghai The PRC

14 August 2015

Dear Sirs,

Corporate Avenue 1 & 2 located at No. 202, Hu Bin Road, No. 222, Hu Bin Road and No. 333, South Huang Pi Road, Huang Pu District, Shanghai, The People’s Republic of China

In accordance with your instructions for us to value the captioned property interest held by Shui On Land Limited (hereinafter referred to as the “ Company ”) and its subsidiaries (hereinafter together referred to as the “ Group ”) in the People’s Republic of China (the “ PRC ”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interest as at 30 June 2015.

Basis of Valuation

Our valuation is our opinion of the market value of the property interest which we would define as “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”

— II-1 —

APPENDIX II

PROPERTY VALUATION REPORT

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of an asset or liability is also estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

Valuation Methodology

We have valued the property by reference to sales evidence as available on the market, and where appropriate, on the basis of capitalisation of the rental incomes as shown on the documents handed to us by the Group. We have allowed for outgoings, and where appropriate, made provisions for reversionary income potential.

Title Documents and Encumbrances

We have been provided with copies of extracts of title documents relating to the property. However, we have not inspected the original documents to verify ownership or to verify any amendments which may not appear on the copies handed to us. We have relied on the information given by the Group and its legal adviser, Jin Mao PRC Lawyers, regarding the title and other legal matters relating to the property.

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

Source of Information

We have relied to a considerable extent on the information given by the Group. We have no reason to doubt the truth and accuracy of the information provided to us by the Group which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, ownership, completion dates of buildings, particulars of occupancy, tenancy details, floor and site areas and all other relevant matters. Dimensions, measurements and areas included in the valuation report are based on information contained in the documents provided to us and are therefore only approximations. We have not been able to carry out on-site measurements to verify the correctness of the site and floor areas of the property and we have assumed that the site and the floor areas shown on the documents handed to us are correct. We were also advised by the Group that no material facts have been omitted from the information provided.

Inspection and Structural Condition

We have inspected the exterior, and where possible, the interior of the property. The inspection was carried out by Mr Eddie Lo, our Senior Manager in April 2015. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report that the property is free from rot, infestation or any other structural defects. No tests were carried out on any of the services.

— II-2 —

PROPERTY VALUATION REPORT

APPENDIX II

Identity of Property to be valued

We exercised reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property, identified by the property addresses in your instructions, is the property inspected by us and contained within our valuation report. If there is ambiguity as to the property addresses, or the extent of the property to be valued, this should be drawn to our attention in your instructions or immediately upon receipt of our report.

Environmental Issues

We are not environmental specialists and therefore we have not carried out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor have we undertaken searches of public archives to seek evidence of past activities that might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation is prepared on the assumption that the property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified.

Remarks

In preparing our valuation report, we have complied with “The HKIS Valuation Standards (2012 Edition)” published by the Hong Kong Institute of Surveyors and all requirements contained in the provision of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited.

Currency

All money amounts stated are in Renminbi.

Our valuation report is attached.

Yours faithfully, For and on behalf of Knight Frank Petty Limited

Clement W M Leung MCIREA MHKIS MRICS RPS (GP)

Executive Director Head of China Valuation

Notes: Clement W M Leung MCIREA, MHKIS, MRICS, RPS(GP), is a qualified valuer and has about 22 years’ experience in the valuation of properties in Hong Kong, Macau and Asia Pacific Region and has 20 years’ experience in the valuation of properties in the People’s Republic of China.

— II-3 —

PROPERTY VALUATION REPORT

APPENDIX II

Property Description and tenure

Corporate Avenue Shanghai Taipingqiao Project is a 1 & 2 located at large-scale redevelopment project and is No. 202, Hu Bin a mixed use property development Road, No. 222, project upon completion located at the Hu Bin Road and city centre of Shanghai - the No. 333, South Taipingqiao Area in Huang Pu District. Huang Pi Road, It is located one block south of Huai Huang Pu Hai Zhong Road and at the intersection District, of Shanghai’s major urban freeways. Shanghai, The PRC Corporate Avenue 1 & 2 is part of the Shanghai Taipingqiao Project. It is a commercial development with a site area of approximately 11,119 sq m. The property is bounded by Hu Bin Road on the south, Shun Chang Road on the east, Tai Cang Road on the north and South Huang Pi Road on the west within the Taipingqiao Area.

Market value in Particular of existing state as occupancy at 30 June 2015

Office portion of RMB6,448,600,000 the property with a total lettable (100% interest area of attributable to the approximately Group: 64,766 sq m has RMB6,448,600,000) been leased under various tenancies with the last tenancy expiring on 31 October 2020 yielding a total monthly rental of approximately RMB20,570,000 exclusive of management fee whilst retail portion of the property with a total lettable area of approximately 4,399 sq m has been fully leased under various tenancies with the last tenancy expiring on 19 October 2019 yielding a total monthly base rental of approximately RMB3,940,000 exclusive of management fee.

— II-4 —

PROPERTY VALUATION REPORT

APPENDIX II

Market value in Particular of existing state as Property Description and tenure occupancy at 30 June 2015 Corporate Avenue 1 & 2 is composed of Office portion a 3-storey commercial building and two with a total Grade A office buildings, namely One lettable area of Corporate Avenue of 21-storey and Two approximately Corporate Avenue of 10-storey, both 1,137 sq m and erected upon a common 2-storey the remaining commercial podium and a 2-level portion of the basement, which accommodates car property are parking spaces and other buildings vacant. facilities. It was complete in 2003. Two footbridges are on Level 2 of the commercial podium providing pedestrian links between the building blocks.

The property provides the following approximate gross floor areas:

Use	**Gross **	Floor Area
		sq m
Retail
Pavilion (Levels 1-3)		1,450
One Corporate Avenue
(Levels 1-2)		2,128
Two Corporate Avenue
(Levels 1-2)		3,797
Sub-total:		7,375
Office
One Corporate Avenue
(Levels 3-25)		57,981
Two Corporate Avenue
(Levels 3-11)		17,799
Sub-total:		75,780
Car park (Basement)
(226 nos)		13,237
Other		1,688
Grand Total:		98,080

The property is held under a land use right term of 50 years commencing from 16 May 2001 and expiring on 15 May 2051 for composite use.

— II-5 —

PROPERTY VALUATION REPORT

APPENDIX II

Notes:

1. Pursuant to the Business Licence No 310000400268025 dated 5 August 2014, Shanghai Xing Bang Properties Co., Ltd. (“ Shanghai Xing Bang ”) was incorporated with a registered capital of RMB287,595,000 for a valid period from 21 June 2001 to 20 June 2051. The scope of business for Shanghai Xing Bang includes construction, development and operation of real estate; lease and sale of real estate; provision of amenities, commercial and entertainment facilities in association with real estate development; and property management.

2. Pursuant to the Shanghai Real Estate Ownership Certificate No Hu Fang Di Shi Zi (2001) Di 010129 issued by the Shanghai Real Estate and Land Resources Administration Bureau dated 18 December 2001, the title to the land with a site area of approximately 11,119 sq m is vested in Shanghai Xing Bang for a term commencing from 16 May 2001 and expiring on 15 May 2051 for composite use.

3. Pursuant to the Shanghai Real Estate Ownership Certificate No Hu Fang Di Lu Zi (2004) Di 002166 issued by the Shanghai Real Estate and Land Resources Administration Bureau dated 9 March 2004, the title to the property with a total gross floor area of 98,080.47 sq m is vested in Shanghai Xing Bang for composite use.

4. We have been provide with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the following:

5. (i) Shanghai Xing Bang is the sole owner of the property;

6. (ii) the property is subject to a mortgage in favour of Deutsche Bank China Co., Ltd. Shanghai Branch for a loan amount of HK$435,000,000 for a security period expiring on 28 October 2016;

7. (iii) Shanghai Xing Bang can occupy and use the property and transfer the property in accordance with the provision of relevant laws and regulations and the above-said mortgage; and

8. (iv) apart from the said mortgage, the property is free from other mortgage and encumbrances.

— II-6 —

GENERAL INFORMATION

APPENDIX III

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

Interests of Directors and chief executive of the Company

At the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV 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 were taken or deemed to have been taken 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 pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) to be notified to the Company and the Stock Exchange were as follows:

• (a) Long position in the Shares and the underlying Shares of the Company

				Approximate	Approximate
					percentage
					of interests
					to the
					issued share
					capital of
					the
					Company as
					at the
					Latest
	Number of ordinary Shares				Practicable
	Personal	Family	Other		Date
Name of Directors	interests	interests	interests	Total	(Note 4)
Mr. Vincent H. S. LO	—	1,849,521	4,587,365,484	4,589,215,005	57.17%
(“Mr. Lo”)		(Note 1)	(Notes 2 & 3)
Sir John R. H. BOND	250,000	—	—	250,000	0.003%
Dr. William K. L. FUNG	5,511,456	—	—	5,511,456	0.06%
Professor Gary C.	305,381	—	—	305,381	0.0038%
BIDDLE
Dr. Roger L. McCARTHY	200,000	—	—	200,000	0.002%

— III-1 —

GENERAL INFORMATION

APPENDIX III

Notes:

• (1) These Shares were beneficially owned by Ms. Loletta CHU (“ Mrs. Lo ”), the spouse of Mr. Lo. Mr. Lo was deemed to be interested in 1,849,521 Shares under Part XV of the SFO.

• (2) These Shares were held by Shui On Company Limited (“ SOCL ”) through its controlled corporations, comprising 1,198,103,792 Shares, 1,450,808,826 Shares, 183,503,493 Shares, 29,847,937 Shares, 573,333,333 Shares, 708,448,322 Shares, 150,000,000 Shares and 293,319,781 Shares held by Shui On Properties Limited (“ SOP ”), Shui On Investment Company Limited (“ SOI ”), Chester International Cayman Limited (“ Chester International ”), New Rainbow Investments Limited (“ NRI ”), Lanvic Limited (“ Lanvic ”), Boswell Limited (“ Boswell ”), Merchant Treasure Limited (“ Merchant Treasure ”) and Doreturn Limited (“ Doreturn ”) respectively whereas SOP, Chester International, Lanvic, Boswell, Merchant Treasure and Doreturn were all wholly-owned subsidiaries of SOI. NRI was a wholly-owned subsidiary of SOCAM Development Limited which in turn was held by SOCL as to 48.38%. SOCL was held under the Bosrich Unit Trust, the trustee of which was Bosrich Holdings (PTC) Inc. (“ Bosrich ”). The units of the Bosrich Unit Trust were the property of a discretionary trust, of which Mr. Lo was a discretionary beneficiary and HSBC International Trustee Limited (“ HSBC Trustee ”) was the trustee. Accordingly, Mr. Lo, Mrs. Lo, Bosrich and HSBC Trustee were deemed to be interested in such shares under Part XV of the SFO.

• (3) Out of these 4,587,365,484 Shares, SOP may lend up to 350,000,000 Shares in aggregate to J.P. Morgan Securities plc pursuant to a Stock Lending Agreement dated 21 May 2015 entered into between SOP (as lender) and J.P. Morgan Securities plc (as borrower), details of which were set out in the announcement of the Company dated 22 May 2015.

• (4) These percentages have been complied based on the total number of issued Shares (i.e. 8,026,630,189 Shares) at the Latest Practicable Date.

• (b) Interests in the debentures of the associated corporation of the Company

	Name of Associated		Amount of
Name of Director	Corporation	Nature of Interests	Debentures
Mr. Lo	Shui On Development	Family interests	USD1,300,000
	(Holding) Limited
Sir John R. H. BOND	Shui On Development	Personal interests	USD813,000
	(Holding) Limited
Dr. William K. L. FUNG	Shui On Development	Family interests	USD500,000
	(Holding) Limited	Interests of Controlled	USD3,000,000
		Corporation

Save as disclosed herein, at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short position in any Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV 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 were taken or deemed to have been taken 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, pursuant to the Model Code to be notified to the Company and the Stock Exchange.

— III-2 —

GENERAL INFORMATION

APPENDIX III

At the Latest Practicable Date, none of the Directors was interested, directly or indirectly, in any assets which have been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2014 (being the date to which the latest published audited financial statements of the Group were made up).

At the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement, which was subsisting and was significant in relation to the business of the Group.

At the Latest Practicable Date, save as disclosed below, none of the Directors or the proposed Directors was a director or employee of a company which had an interest or short position in the Shares, underlying Shares or debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of companies which had such discloseable interest or Position within Name of Directors short position such companies Mr. Lo SOCL, SOP, SOI, NRI and Boswell Director Mr. Frankie Y. L. WONG SOCL, SOP, SOI and Boswell Director

3. EXPERTS AND CONSENTS

The following is the qualification of the experts who have provided advice referred to or contained in this circular:

Name Qualification Knight Frank Petty Limited Independent property valuer Jin Mao PRC Lawyers PRC legal adviser

Each of Knight Frank Petty Limited and Jin Mao PRC Lawyers has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and valuation report and/or references to its name in the form and context in which they respectively appear.

4. EXPERTS’ INTEREST

Each of Knight Frank Petty Limited and Jin Mao PRC Lawyers has confirmed that as at the Latest Practicable Date:

• (a) it did not have any shareholding interest in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group; and

— III-3 —

GENERAL INFORMATION

APPENDIX III

• (b) it was not interested, directly or indirectly, in any assets which have been acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2014 (being the date to which the latest published audited financial statements of the Group were made up).

Knight Frank Petty Limited has confirmed that the valuation report prepared by Knight Frank Petty Limited is given as of the date of this circular for incorporation herein.

5. SERVICE CONTRACTS

At the Latest Practicable Date, none of the Directors had entered into, with any member of the Group, a service agreement which is not expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

6. MATERIAL LITIGATION

At the Latest Practicable Date, there was no litigation or claim of material importance that is known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

7. COMPETING INTERESTS OF DIRECTORS

Mr. Lo is an executive Director and the Chairman of the Company, as well as the ultimate controlling shareholder, chairman and chief executive officer of SOCL and its subsidiaries (excluding SOCAM Development Limited and its subsidiaries) (the “ Shui On Group ”). The core businesses of the Shui On Group include property development and investment projects in Hong Kong and the PRC, as more fully described in the section headed “Relationship with the Shui On Group” of the Company’s listing prospectus dated 20 September 2006 (the “ Listing Prospectus ”). The Company has entered into a deed of non-competition dated 30 May 2006 with SOCL and Mr. Lo pursuant to which SOCL and Mr. Lo have severally undertaken not to compete with the business of the Company. For more details, see the section headed “Relationship with the Shui On Group” of the Listing Prospectus. In addition, Mr. Lo is also the chairman and controlling shareholder of SOCAM Development Limited, which is engaged in property development in the PRC.

Saved as disclosed above, at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective close associates (as defined in the Listing Rules) had any interest in a business which competes or may compete with the business of the Group, or has or may have any other conflicts of interest with the Group pursuant to Rule 8.10 of the Listing Rules.

— III-4 —

GENERAL INFORMATION

APPENDIX III

8. MATERIAL CONTRACTS

The following contracts have been entered into by the Group (not being contract entered into in the ordinary course of business) within two years preceding the date of this circular:

• (a) the framework swap agreement (the “Swap Agreement” ) dated 30 September 2013 entered into between Shui On Development (Holding) Limited ( “Shui On Development” ) and the Investor (as defined in the Company’s circular dated 28 October 2013) pursuant to which, amongst other things, (i) the Investor transferred all its shares in Fieldcity Investments Limited, Foresight Profits Limited, Score High Limited and Rightchina Limited to Shui On Development upon the completion of the restructuring pursuant to the terms of the Swap Agreement; and (ii) Shui On Development transferred its 51% equity interest in Portspin Limited ( “Portspin” ) to Taipingqiao 116 Development Company Limited ( “Taipingqiao 116” ) pursuant to which the Total Amount (as defined in the Company’s circular dated 28 October 2013) of RMB1,038,190,652 was paid to Shui On Development. Details of the transaction were set out in the Company’s announcement dated 30 September 2013 and the Company’s circular dated 28 October 2013;

• (b) the joint venture agreement in relation to Portspin dated 30 September 2013 entered into between Shui On Development, Taipingqiao 116 and Portspin, pursuant to which Shui On Development and Taipingqiao 116, upon completion of restructuring under the Swap Agreement, formed a joint venture in respect of Portspin (the “Portspin JV” ). A capital contribution in an amount equal to the Total Amount referred to in paragraph (a) above was contributed to the Portspin JV. Details of the transaction were set out in the Company’s announcement dated 30 September 2013 and the Company’s circular dated 28 October 2013; and

• (c) the investment agreement dated 31 October 2013 entered into between the Company, China Xintiandi Holding Company Limited ( “China Xintiandi” ), BSREP CXTD Holdings L. P., and Brookfield Property Partners (as defined in the circular of the Company dated 30 November 2013), pursuant to which Brookfield invested an aggregate amount of US$500 million into China Xintiandi and the Company, in return for (1) convertible perpetual securities issued by China Xintiandi in an aggregate principal amount of US$500 million and (2) 415 million warrants issued by the Company, exercisable for 415 million Shares (subject to customary anti-dilution adjustments). Details of the transaction were set out in the Company’s announcement dated 31 October 2013 and the Company’s circular dated 30 November 2013.

9. GENERAL

• (a) The registered office of the Company is at 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands.

• (b) The principal place of business of the Company in Hong Kong is at 34th Floor, Shui On Centre, 6-8 Harbour Road, Wan Chai, Hong Kong.

— III-5 —

GENERAL INFORMATION

APPENDIX III

• (c) The principal share registrar and transfer office of the Company is Royal Bank of Canada Trust Company (Cayman) Limited, 4th Floor, Royal Bank House, 24 Shedden Road, George Town, Grand Cayman KY1-1110, Cayman Islands.

• (d) The branch share registrar and transfer office of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (e) The company secretary of the Company is Mr. UY Kim Lun, a qualified lawyer in Hong Kong.

• (f) This circular is in both English and Chinese. In the event of inconsistency, the English text shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at 34th Floor, Shui On Centre, 6-8 Harbour Road, Wan Chai, Hong Kong from the date of this circular and up to and including 2 September 2015:

• (a) the memorandum and articles of association of the Company;

• (b) each of the material contracts referred to in the section headed “Material Contracts” in this appendix;

• (c) the valuation report issued by Knight Frank Petty Limited on the Corporate Avenue 1 & 2 Property, the text of which is set out in Appendix II to this circular;

• (d) the written consents referred to in paragraph headed “Experts and Consents” of this appendix;

• (e) the annual reports of the Company for the years ended 31 December 2013 and 31 December 2014;

• (f) the circular of the Company dated 30 April 2015 in relation to the issue of new Shares pursuant to the Connected Employee Share Award Scheme; and

• (g) this circular.

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