Ground International Development : Announcements and Notices - Framework Agreement in Relation to the Possible Cooperation Project

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廣澤國際發展有限公司

(Incorporated in Bermuda with limited liability)

This is a voluntary announcement made by Ground International Development Limited (the "Company").

The board of directors (the "Directors") of the Company (the "Board") (together with its subsidiaries, the "Group") is pleased to announce that, on 25 September 2017 (after trading hours), the Company entered into a conditional cooperation framework agreement (the "Framework Agreement") , which is non-legal binding prior to the satisfaction of the conditions, with (i) an individual (the "Potential Partner") who has substantial experience in managing cruise tourism operations and (ii) a company (the "Project Company") established in the People's Republic of China (the "PRC"), in which the Potential Partner has 40% equity interests. Pursuant to the Framework Agreement, the Company and the Potential Partner intend to set up a joint venture company (the "Proposed JV Company") in the PRC which will acquire the Project Company following the completion of the Gulf Cruise Enterprises Restructuring (as defined below) for the purpose of developing a cruise-tourism project in a gulf at Hainan Province of the PRC (the "Possible Cooperation Project"). Also, the Company plans to set up a wholly foreign owned enterprise in the PRC, with the name of "Ground Cultural Tourism Business (Hainan) Company Limited" (subject to the relevant approval of establishment), as the holding company of the Group's Hainan Province cultural tourism projects in the future.

Date : 25 September 2017

Parties : The Company, the Potential Partner and the Project Company

Pursuant to the Framework Agreement, the Company (or its designated subsidiary(ies)) will initially set up the Proposed JV Company. The Company (or its designated subsidiary(ies)) and the Potential Partner (and his related party(ies)) will, together, inject capital of not more than RMB200,000,000 into the Proposed JV Company at a later date and establish it as a cruise- tourism management company. The amount of capital contribution and the percentage of equity interest of each party in the Proposed JV Company are subject to the final investment proposal.

Further, the Project Company intends to restructure and integrate companies that operate cruise business (the "Cruise Companies") in the gulf (the "Gulf") of Hainan Province of the PRC in order to obtain either not less than 51% equity interest of each of the Cruise Companies or the exclusive operating rights on the operation of cruise business of Cruise Companies by injecting capital in accordance with the appraised value of the audited net assets of the Cruise Companies (the "Gulf Cruise Enterprises Restructuring"). Upon completion of the Gulf Cruise Enterprises Restructuring, the Proposed JV Company will acquire the entire equity interest of the Project Company, the consideration of which will be determined with reference to the appraised value of the audited net assets of the Project Company, and will be negotiated and confirmed among the Company, the Proposed JV Company and the shareholder(s) of the Project Company. After acquiring the Project Company, the Proposed JV Company will adopt the "4 unification model" to manage the Project Company and the Cruise Companies. The "4 unification model" includes the unification of (i) the management team; (ii) the financial management; (iii) the asset management; and (iv) the business management.

The Potential Partner will assist the Group in obtaining support for the Possible Cooperation Project from relevant municipal governmental departments on the services fees, the pricing adjustment and the entering into of the industry, etc.. Besides, the Potential Partner will also assist the Group to obtain the rights to use other gulfs and beaches in Hainan Province.

Upon entering into of the Framework Agreement, the Group shall be entitled to commence due diligence work on the Project Company and the Cruise Companies. Subject to the completion of the due diligence work and the Company being satisfied with the due diligence results and upon the contracting parties reaching a consensus on the cooperation model, formal agreements (the "Formal Agreements") shall be entered into by the parties within the period commencing from the date of the Framework Agreement to 31 December 2018 (or a later date as the contracting parties may agree) (the "Exclusivity Period"). Otherwise the Framework Agreement shall be terminated automatically.

During the Exclusivity Period, unless agreed by each of the contracting parties , no contracting party nor the shareholders of the Project Company may directly or indirectly, or procure its/his directors, staff, employees, representatives, agents, and its/his respective associates, directly or indirectly, to (a) solicit, initiate or induce inquiry or invite; or (b) initial or continue to negotiate or provide any information; or (c) enter into any agreement or memorandum of cooperation with any person or entity (other than the Company or its subsidiaries or their associates) with respect to the Possible Cooperation Project. In case any member of the Project Company or the Potential Partner receive any of the abovementioned enquiry or offer, they should promptly notify the Group.

The Group is principally engaged in the business of property development and management, including planning, design, budgeting, licensing, contract tendering and contract administration, property investment, and provision of financial services.

As disclosed in the Company's annual report for the year ended 31 March 2017, in order to effectively promote its business development, the Group has formulated a growth model of "one primary sector as supplemented by two" (一主兩輔) for business adjustment and upgrade transformation. With the cultural tourism and healthcare sectors as the core businesses under

such growth model, the Group is dedicated to expand its business into other tourist areas in Jilin Province and other provinces in the PRC. The Possible Cooperation Project enables the Group to develop the cultural tourism projects in the gulfs of Hainan Province, the PRC, and this marks the next milestone of the Company's expansion of its cultural and healthcare tourism business.

The Directors consider that the entering into of the Framework Agreement will enable the Group to explore business opportunities in the Hainan Province and the formation of the Proposed JV Company and the Possible Cooperation Project may act as the first step of the Company to develop different projects within the regions of Southern China with the plan to connect projects in Jilin Province and Hainan Province in the coming years.

The Directors consider that the terms of the Framework Agreement are fair and reasonable, and the entering into of the Framework Agreement is in the interests of the Company and its shareholders (the "Shareholders") as a whole.

The Potential Partner has substantial experience in managing cruise tourism operations and has 40% equity interests of the Project Company. The Project Company is a company established in the PRC which engages in the cruise-tourism in the Gulf.

To the best of the Directors' knowledge, information and belief, having made all reasonable enquiries, the Potential Partner and Project Company and their ultimate beneficial owner(s) are third parties independent of and not connected with the Company or its connected persons (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")) or any of their respective associates (as defined under the Listing Rules).

The formation of the Proposed JV Company and the Possible Cooperation Project, if materialised, may constitute a notifiable transaction of the Company under Chapter 14 of the Listing Rules. The Company will keep potential investors and the Shareholders informed of any material development in connection with the formation of the Proposed JV Company and the Possible Cooperation Project by way of further announcement(s) as and when appropriate in compliance with the requirements under the Listing Rules.

The Board wishes to emphasise that no legally binding agreement in relation to the formation of the Proposed JV Company and/or the Possible Cooperation Project have been entered into as at the date of this announcement, and that the completion of the Formal Agreement and the transactions contemplated thereunder, including the formation of the Proposed JV Company and the Possible Cooperation Project, will be subject to fulfilment of certain conditions precedent to be set out in the Formal Agreement. The formation of the Proposed JV Company and the Possible Cooperation Project may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

Chairperson

Hong Kong, 25 September 2017

As at the date of this announcement, the executive Directors of the Company are Ms. Chai Xiu, Ms. Cui Xintong, Mr. Wang Guanghui and Mr. Huang Bingxing; and the independent non-executive directors of the Company are Mr. Chan Yuk Tong, Mr. Mei Jianping and Mr. Xiang Qiang.