CONTINUING CONNECTED TRANSACTIONS AND ANNUAL CAPS FOR TENANCY AGREEMENT AND RELATED AGREEMENTS

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Incorporated in Hong Kong with limited liability) (Stock Code: 0270) CONTINUING CONNECTED TRANSACTIONS AND ANNUAL CAPS FOR TENANCY AGREEMENT AND RELATED AGREEMENTS On 30 October 2015, GDTDS, a subsidiary of the Company, entered into the Tenancy Agreement with Guangzhou Jindongyuan for a fixed term of three years ending on 31 October In connection with the Tenancy Agreement, GDTDS also entered into the Management Agreement with GDH Property Management for the term during the subsistence of the Tenancy Agreement. Guangdong Holdings and GDH are respectively the ultimate and immediate controlling shareholders of the Company, holding approximately 54.68% of the issued share capital of the Company as at the date of this announcement, and hence each of them is a connected person of the Company. Accordingly, each of Guangzhou Jindongyuan (being a wholly owned subsidiary and thus an associate of Guangdong Holdings as defined in the Listing Rules) and GDH Property Management (being an indirect subsidiary and thus an associate of both Guangdong Holdings and GDH as defined in the Listing Rules) is a connected person of the Company. Therefore, each of the transactions as contemplated under the Tenancy Agreement and the Related Agreements constitutes a continuing connected transaction of the Company under the Listing Rules. Based on the estimated annual payment under the Tenancy Agreement and the Related Agreements on an aggregate basis, the Annual Caps for the relevant periods in 2015, 2016, 2017 and 2018 are RMB200,000, RMB7,000,000, RMB8,000,000 and RMB7,000,000, respectively. The highest Annual Cap is estimated to be RMB8,000,000 (equivalent to approximately HK$9,746,400), which exceeds 0.1% but is less than 5% of certain applicable percentage ratio pursuant to Rule of the Listing Rules. Accordingly, the transactions as contemplated under the Tenancy 1

2 Agreement and the Related Agreements on an aggregate basis are subject to the reporting and announcement requirements, but shall be exempt from the circular and shareholders approval requirements in accordance with Rule 14A.76(2) of the Listing Rules. The Company will comply with the annual review requirements under Rules 14A.55 to 14A.57 of the Listing Rules in relation to the Tenancy Agreement and the Related Agreements on an aggregate basis. TENANCY AGREEMENT AND THE RELATED AGREEMENTS On 30 October 2015, GDTDS, a subsidiary of the Company, entered into the Tenancy Agreement and the Related Agreements whereby (i) Guangzhou Jindongyuan has agreed to let and GDTDS has agreed to take the premises on Basement 1 of Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) situated on Beijing Road, Yuexiu area, Guangzhou, the PRC; and (ii) GDH Property Management has agreed to provide management service for GDTDS in connection with the lease of the Premises on the following terms: Parties: Premises: Term: Landlord - Guangzhou Jindongyuan Tenant - GDTDS Basement 1 of Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) situated on Beijing Road, Yuexiu area, Guangzhou, the PRC with gross floor area of approximately 7,986 sq.m. A fixed term of three years from 1 November 2015 to 31 October 2018 with an option for GDTDS to renew two further terms of the tenancy, each for three years Monthly Rental: 2.6% of turnover (net of applicable tax, if any) from the date of the Tenancy Agreement to the end of the first nine months, and for the remaining terms (including the renewal terms, if applicable), the applicable charging rate will be increased to 3.5%. If any floor area is sub-let to a third party, GDTDS shall pay to the Landlord the amount of rent proportional to the sub-let area Monthly Management Fee: Management fee at RMB25 per sq.m. (inclusive of central air-conditioning and usage of water and electricity in public area) and other expenses, if any, shall be payable to GDH Property Management, which provides property management services to Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) Rent Free Period: During the renovation period, which shall not be more than three months, no rent shall be payable to Guangzhou Jindongyuan, the landlord, and that no management fee shall be payable to GDH Property Management Outgoings: For the account of GDTDS 2

3 BASIS AND REASONS FOR THE TRANSACTION AND THE ANNUAL CAPS The Premises are situated on Beijing Road, Yuexiu area, Guangzhou and the leasing of the Premises allows the Group to further expand its department store operation business in a prime location of Guangzhou. The entering into of the Tenancy Agreement and the Related Agreements are in the ordinary and usual course of business of GDTDS. The terms of the Tenancy Agreement and the Related Agreements are on normal commercial terms or better and were negotiated on an arm s length basis between the parties with reference to the prevailing market conditions. Pursuant to the Tenancy Agreement and the Related Agreements on an aggregate basis, the Annual Caps for the total annual payment (comprising the above rental, management fee and other expenses) for the relevant periods in 2015, 2016, 2017 and 2018 are as follows: For the two months ending 31 December 2015 For the year ending 31 December 2016 For the year ending 31 December 2017 For the ten months ending 31 December 2018 (RMB) (RMB) (RMB) (RMB) Estimated Total Payment under the Tenancy Agreement 73, ,908, ,963, ,633, Estimated Total Payment under the Management Agreement 99, ,714, ,760, ,174, Total 173, ,622, ,724, ,807, Annual Caps (each an Annual Cap ) 200, ,000, ,000, ,000, It is expected that the department store in the Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) will commence business by the end of December The above Estimated Total Payment under the Tenancy Agreement is calculated based on the applicable charging rate on the estimated turnover to be generated by the new department store whereas the Estimated Total Payment under the Management Agreement is calculated based on the estimated monthly management fee of approximately RMB199,650 plus other ancillary expenses such as water and electricity charges, carpark fee etc. Those other ancillary expenses are calculated by reference to the latest charging rates and the estimated consumption level for the various services used by GDTDS in connection with its occupation of the Premises. The Directors (including the independent non-executive Directors) are of the view that each of the Tenancy Agreement and the Related Agreements was entered into in the ordinary and usual course of business of GDTDS and on normal commercial terms or better and that the terms of the Tenancy Agreement and the Related Agreements are fair and reasonable under the prevailing market conditions and are in the interests of the Company and its shareholders as a whole. 3

4 Mr. Huang Xiaofeng and Mr. Wu Jianguo, being Directors of the Company, are also directors of Guangdong Holdings and GDH. In addition, Mr. Zhang Hui, Ms. Zhao Chunxiao, Mr. Lan Runing and Mr. Li Wai Keung, Directors of the Company, are also directors of GDH. All of the abovementioned Directors present at the board meeting of the Company were not counted in the quorum and they did not vote on the Directors resolutions approving, inter alia, the entering into of the Tenancy Agreement and the Related Agreements and the Annual Caps of the aggregate annual payment under the Tenancy Agreement and the Related Agreements for the relevant periods. CONNECTED PERSON Guangdong Holdings and GDH are respectively the ultimate and immediate controlling shareholders of the Company, holding approximately 54.68% of the issued share capital of the Company as at the date of this announcement, and hence each of them is a connected person of the Company. Accordingly, each of Guangzhou Jindongyuan (being a wholly owned subsidiary and thus an associate of Guangdong Holdings as defined in the Listing Rules) and GDH Property Management (being an indirect subsidiary and thus an associate of both Guangdong Holdings and GDH as defined in the Listing Rules) is a connected person of the Company. Therefore, each of the transactions as contemplated under the Tenancy Agreement and the Related Management Agreements constitutes a continuing connected transaction of the Company under the Listing Rules. LISTING RULES IMPLICATIONS Based on the estimated annual payment under the Tenancy Agreement and the Related Agreements on an aggregate basis, the Annual Caps for the relevant periods in 2015, 2016, 2017 and 2018 are RMB200,000, RMB7,000,000, RMB8,000,000 and RMB7,000,000, respectively. The highest Annual Cap is estimated to be RMB8,000,000 (equivalent to approximately HK$9,746,400), which exceeds 0.1% but is less than 5% of certain applicable percentage ratio pursuant to Rule of the Listing Rules. Accordingly, the transactions as contemplated under the Tenancy Agreement and the Related Agreements on an aggregate basis are subject to the reporting and announcement requirements, but shall be exempt from the circular and shareholders approval requirements in accordance with Rule 14A.76(2) of the Listing Rules. The Company will comply with the annual review requirements under Rules 14A.55 to 14A.57 of the Listing Rules in relation to the Tenancy Agreement and the Related Agreements on an aggregate basis. PRINCIPAL BUSINESS OF THE COMPANY AND THE CONNECTED PERSON The Group is principally engaged in investment holding, water resources, property holding and investment, hotel ownership and operation, hotel management, department store operations and investments in infrastructure and energy projects. The principal businesses of Guangdong Holdings include investment holding and project development. The principal business of GDH is investment holding. 4

5 The principal businesses of Guangzhou Jindongyuan include property development and operation, property management and property leasing. The principal businesses of GDH Property Management include property management, real estate consultation, property leasing and venue leasing. DEFINITIONS In this announcement, the following expressions shall have the following meanings unless the context requires otherwise: Company Director(s) GDH GDH Property Management GDTDS Group Guangdong Holdings Guangzhou Jindongyuan HK$ Hong Kong Listing Rules Management Agreement Guangdong Investment Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board of the Stock Exchange; the director(s) of the Company; GDH Limited, a company incorporated in Hong Kong with limited liability; 粤 海 物 業 管 理 有 限 公 司 越 秀 分 公 司 (GDH Property Management Co., Ltd., Yuexiu branch*), a company established under the laws of the PRC; 廣 東 天 河 城 百 貨 有 限 公 司 (Guangdong Teemall Department Stores Ltd.*), a subsidiary of the Company established under the laws of the PRC; the Company and its subsidiaries; 廣 東 粤 海 控 股 集 團 有 限 公 司 (Guangdong Holdings Limited*), an enterprise established under the laws of the PRC; 廣 州 金 東 源 房 地 產 開 發 有 限 公 司 (Guangzhou Jindongyuan Real Estate Development Company Limited*), a company established under the laws of the PRC; Hong Kong dollars, the legal currency of Hong Kong; The Hong Kong Special Administrative Region of the PRC; the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time; a property management service agreement dated 30 October 2015 between GDH Property Management and GDTDS during the subsistence of the Tenancy Agreement; 5

6 PRC Premises RMB sq.m. Stock Exchange Tenancy Agreement Tenancy Agreement and the Related Agreements Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) the People s Republic of China; Basement 1 of Yuehaiyangzhong Hui ( 粤 海 仰 忠 匯 ) situated on Beijing Road, Yuexiu area, Guangzhou, the PRC; Reminbi, the lawful currency of the PRC; square metre; The Stock Exchange of Hong Kong Limited; a tenancy agreement and a supplemental tenancy agreement both dated 30 October 2015 between Guangdong Jindongyuan as the landlord and GDTDS as the tenant in respect of the Premises; Tenancy Agreement and the Management Agreement; A new commercial complex situated on Beijing Road, Yuexiu area, Guangzhou, the PRC; and % per cent. By Order of the Board TSANG Hon Nam Director Hong Kong, 30 October 2015 * The English translation of the Chinese name of the relevant company included in this announcement is prepared by the Company for reference only, and such translation may not be accurate and such company may not have an official English translation/version of its Chinese name. For the purpose of this announcement, unless otherwise indicated, the exchange rate of RMB1.00=HK$ has been used, where applicable, for purpose of illustration only and it does not constitute any representation that any amount has been, could have been or may be exchanged at that rate or at any other rate. As at the date of this announcement, the board of Directors comprises four Executive Directors, namely, Mr. HUANG Xiaofeng, Mr. WEN Yinheng, Mrs. HO LAM Lai Ping, Theresa and Mr. TSANG Hon Nam; six Non-Executive Directors, namely, Mr. HUANG Zhenhai, Mr. WU Jianguo, Mr. ZHANG Hui, Ms. ZHAO Chunxiao, Mr. LAN Runing and Mr. LI Wai Keung; and five Independent Non-Executive Directors, namely, Dr. CHAN Cho Chak, John, Dr. the Honourable LI Kwok Po, David, Mr. FUNG, Daniel R., Dr. CHENG Mo Chi, Moses and Mr. WU Ting Yuk, Anthony. 6