China Overseas Land & Investment : Announcements and Notices - Continuing Connected Transactions - Renewal of Continuing Connected Transactions with China State Construction International Holdings Limited in Relation to Construction Works

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)

(Incorporated in the Cayman Islands with limited liability)

Reference is made to the announcement jointly issued by COLI and CSC dated 31 October 2014 in relation to, among other things, the Previous CSC Group Engagement Agreement entered into between COLI and CSC which will expire on 31 December 2017.

As the Previous CSC Group Engagement Agreement is due to expire on 31 December 2017, on 6 October 2017, COLI and CSC entered into the New Master CSC Group Engagement Agreement to renew the transactions contemplated thereunder, whereby the CSC Group may tender for the COLI Group's construction works in the PRC, Hong Kong and Macau in accordance with the tendering procedures of the COLI Group from time to time for the period commencing from

1 January 2018 and ending on 31 December 2020 subject to the COLI Works Annual Cap.

COHL is interested in approximately 55.99% of the issued share capital of COLI and approximately 62.96% of the issued share capital of CSC. Accordingly, members of the COLI Group are connected persons of the CSC Group and members of the CSC Group are connected persons of the COLI Group. The transactions contemplated under the New Master CSC Group Engagement Agreement between members of the COLI Group on the one hand and members of the CSC Group on the other hand, constitute continuing connected transactions for both CSC and COLI under Chapter 14A of the Listing Rules.

For COLI, since the applicable percentage ratios as defined under the Listing Rules in respect of the maximum total contract sum that may be granted for each year under the New Master CSC Group Engagement Agreement (i.e. the COLI Works Annual Cap) are more than 0.1% but less than 5%, the transactions contemplated under the New Master CSC Group Engagement Agreement are subject to the annual review, reporting and announcement requirements but are exempt from the independent shareholders' approval requirement.

For CSC, since the applicable percentage ratios as defined under the Listing Rules in respect of the maximum total contract sum that may be awarded for each year under the New Master CSC Group Engagement Agreement (i.e. the COLI Works Annual Cap) exceed 5%, the transactions contemplated under the New Master CSC Group Engagement Agreement are subject to the annual review, reporting, announcement and independent shareholders' approval requirements.

The independent board committee of CSC comprising all the independent non-executive directors of CSC has been formed to advise the CSC's Independent Shareholders in respect of the transactions contemplated under the New Master CSC Group Engagement Agreement. Innovax Capital Limited has been appointed as the independent financial adviser to advise the independent board committee of CSC and the CSC's Independent Shareholders in this connection. Voting at the CSC EGM will be conducted by poll and COHL and its associates will abstain from voting at the CSC EGM.

A circular containing, among other things, further particulars of the transactions contemplated under the New Master CSC Group Engagement Agreement together with, the recommendations of the independent board committee of CSC, a letter from the independent financial adviser to the independent board committee of CSC and the CSC's Independent Shareholders, and a notice convening the CSC EGM is expected to be despatched to the shareholders of CSC on or before 26 October 2017 in accordance with the Listing Rules.

Reference is made to the announcement jointly issued by COLI and CSC dated 31 October 2014 in relation to, among other things, the Previous CSC Group Engagement Agreement entered into between COLI and CSC which will expire on 31 December 2017.

As the Previous CSC Group Engagement Agreement is due to expire on 31 December 2017, on 6 October 2017, COLI and CSC entered into the New Master CSC Group Engagement Agreement to renew the transactions contemplated thereunder, whereby the CSC Group may tender for the COLI Group's construction works in the PRC, Hong Kong and Macau in accordance with the tendering procedures of the COLI Group from time to time for the period commencing from 1 January 2018 and ending on 31 December 2020 subject to the COLI Works Annual Cap.

6 October 2017

1. COLI; and

2. CSC.

The directors of COLI expect that the COLI Group will continue to invite the CSC Group to participate in competitive tender for the COLI Group's construction works in the PRC, Hong Kong and Macau from time to time. In this connection, on 6 October 2017, COLI and CSC entered into the New Master CSC Group Engagement Agreement for a term of three years commencing from 1 January 2018 and ending on 31 December 2020 whereby the parties agreed that:

1. the CSC Group may tender for the COLI Group's construction works in the PRC, Hong Kong and Macau in accordance with the tendering procedures of the COLI Group from time to time and on the same and normal terms as offered to other independent third party construction contractors;

2. if any contract is granted in favour of the CSC Group as a result of the above tender, the CSC Group may act as construction contractor for the COLI Group's construction works in the PRC, Hong Kong and Macau based on the terms of the successful tender provided that the maximum total contract sum that may be awarded by the COLI Group to the CSC Group for each of the three financial years ending 31 December 2020 shall not exceed HK$7,000 million (i.e. the COLI Works Annual Cap); and

3. the construction fees payable by the COLI Group to the CSC Group will be settled pursuant to the payment terms set out in the tender documents for the specific construction contracts.

Pricing basis of the tenders submitted by CSC Group

The price and terms of the tenders submitted by the CSC Group to the COLI Group for the COLI Group's construction works in the PRC, Hong Kong and Macau are subject to the standard and systematic tender submission procedure maintained by the CSC Group, which applies for tender submitted to both connected persons and independent third parties of the CSC Group, in order to ensure that the price and terms of the proposed tender submitted by the CSC Group to the COLI Group is no more favourable than those submitted to independent third parties.

The standard and systematic tender submission procedure generally involves (i) receiving invitation to tender; (ii) initial assessment of tender documents; (iii) further planning and estimation; (iv) preparation for tender report and internal tender adjudication; and (v) tender submission. The procedure, as illustrated in the following diagram, will enable the CSC Group to review the feasibility and profitability of the tender to be submitted and to decide the contents and pricing terms of the tender to be submitted.

The CSC Group's in-house computer system maintains a database of costs information for materials supplied and sub-contractors from the CSC Group's pervious projects and peripheral operation. Such information can assist the CSC Group implementing quantitative comparison between preliminary quotations obtained from sub-contractors and materials suppliers

Invitations to tender/publication of tender notices

Initial assessment of tender documents, technical requirements, quantity specifications, expected completion time, the customer's expectation and possible risk factors associated with a project

Further planning and estimation: this includes site inspection, formulation of a tentative construction program, quantitative costs analysis and risk assessment

Preparation for tender report and internal tender adjudication

Tender submission