Guangdong Land : Discloseable Transaction - Curtain Wall Work Agreement in relation to the Southern Land under the GDH City Project

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 Bermuda with limited liability)

(Stock Code: 0124)

Discloseable Transaction

Curtain Wall Work Agreement

in relation to the Southern Land under the GDH City Project

THE AGREEMENT

The Board is pleased to announce that, upon the conclusion of a contracting tender process for the selection of the contractor for the curtain wall work of the Southern Land, on 31 July 2020, Guangdong Land Shenzhen (a wholly-owned subsidiary of the Company) entered into the Agreement with the Contractor in relation to the curtain wall work of the Southern Land at the Consideration of RMB173,266,680.79 (equivalent to approximately HK$192,241,000), subject to adjustments (if any) as set out below.

LISTING RULES IMPLICATIONS

Since the Group entered into the Curtain Wall Sample Work Agreement (which, on a standalone basis, did not constitute a notifiable transaction of the Company) and the Agreement with the same party within twelve months, the Transactions are aggregated pursuant to Rule 14.22 of the Listing Rules. Since one of the applicable percentage ratios in respect of the Transactions (on an aggregated basis) exceeds 5% but all of them are less than 25%, the Transactions constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

1

1. INTRODUCTION

Reference is made to the circular of the Company dated 22 June 2016 in relation to the Buxin Project (now known as the GDH City Project), which set out the details of the GDH City Project. As disclosed in the 2019 Annual Report of the Company, the Southern Land was under the second phase of the development of the GDH City Project and the properties thereon are expected to be filed for completion (竣工備案) in 2023 on current schedule.

The Board is pleased to announce that, upon the conclusion of a contracting tender process for the selection of the contractor for the curtain wall work of the Southern Land, on 31 July 2020, Guangdong Land Shenzhen (a wholly-owned subsidiary of the Company) entered into the Agreement with the Contractor in relation to the curtain wall work of the Southern Land at the Consideration of RMB173,266,680.79 (equivalent to approximately HK$192,241,000), subject to adjustments (if any) as set out below. More details of the Agreement are set out below.

1. THE AGREEMENT

A summary of the salient terms of the Agreement is set out below:

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Contractor and its ultimate beneficial owners are not connected persons of the Company and thus they are third parties independent of the Group.

Subject matter

On 31 July 2020, the Contractor was appointed as the contractor for the curtain wall work of the Southern Land (the "Curtain Wall Work"). Pursuant to the Agreement, the scope of the Curtain Wall Work shall include commercial shopping buildings and office tower, inter alia, glass curtain walls, aluminium plate curtain walls, aluminium alloy doors and windows, skylight roof, window blinds, aluminium alloy grilles, suspended ceilings, railings, window guard rails and deepening of all construction designs of the Curtain Wall Work, etc.

Consideration and basis of determination of Consideration

The total consideration payable to the Contractor for the Curtain Wall Work shall be RMB173,266,680.79 (equivalent to approximately HK$192,241,000) (the "Consideration"). If the volatility of wages and/or the prices of aluminium profiles, aluminium veneer, steel and glass (collectively "Major Materials") exceeds the percentage as stated in the Agreement or there is a change of works and permit after on-

2

site inspections or there is a state policy adjustment to value-added tax rate (if any), etc., the Consideration may be subject to adjustments pursuant to the corresponding mechanism under the Agreement.

The Consideration comprises:

1. the sub-project fees ( 分部分項工程費) (the "Sub-projectFees"), including direct construction fees (直接工程費), corporate management fees and other relevant fees for the Curtain Wall Work as set out in the paragraph headed "Subject matter" above;
2. the measure fees (措施項目費) (the "Measure Fees"), including safety and civilisation measure fees (安全文明施工措施費) (the "Safety Measure Fees"), and other measure fees (for example, all fees in relation to the guarantee for work period, technology, security and prevention, as well as quality) (the "Other Measure Fees"); and
3. the levies and taxes (徵費及稅金) (the "Levies and Taxes") payable in relation to the works under the applicable rules and regulations of the PRC.

The Consideration shall be paid by Guangdong Land Shenzhen in cash in the manners set out below:

1. Work Fees
   Sub-project Fees and corresponding Levies and Taxes (collectively "Work Fees") (after deduction of the relevant fees) shall be paid by the following means:
2. 1. where the Contractor provides production scheduling orders (material purchase orders, etc.), upon review and confirmation by Guangdong Land Shenzhen, Guangdong Land Shenzhen shall pay 10% of the sum of Sub- project Fees, Measure Fees and Levies and Taxes (net of the payment for Safety Measure Fees and provisionally listed amounts) involved in the works under the Agreement;
   2. where the Contractor lodges application for the work progress fees to the engineers and Guangdong Land Shenzhen at the monthly agreed time under the Agreement, upon review and confirmation of the application for the work progress fees by the engineers and Guangdong Land Shenzhen, Guangdong Land Shenzhen shall pay to the Contractor the work progress fees, which is 70% of the sub-project construction price (representing the sum of the value of the completed installation and the value of the arrived major materials), as well as corresponding Levies and Taxes in respect of the completed works (reviewed and confirmed by Guangdong Land Shenzhen) in that month after deduction of other deductible amounts;
   3. if Guangdong Land Shenzhen confirms in writing that it is necessary to increase or decrease the construction price for on-site permit and change of works, payment or deduction shall be made to the sub-project construction price (and Levies and Taxes) (reviewed and confirmed by Guangdong Land

Shenzhen) of the latest subsequent instalment of work progress fees which 3

shall be aggregated up to 80% of the relevant payment; and

1. 1. within the context of the Agreement, upon eligible inspection of completion and successful transmission of all works, relocation of all equipment, machineries, materials and other articles of the Contractor from the worksite and receipt of the certificate of compliance for works completion and inspection under the seal of the engineers and Guangdong Land Shenzhen for approval and transmission of the complete completion information to Guangdong Land Shenzhen, Guangdong Land Shenzhen shall pay to the Contractor the work progress fees up to 90% of the construction price in respect of the aggregated completed works (total sum of sub-project construction price, construction price for on-site permit and change of works, as well as corresponding Levies and Taxes) reviewed and confirmed by Guangdong Land Shenzhen after deduction of other deductible amounts;
2. Measure Fees
   Safety Measure Fees shall be paid by the following means:
3. 1. upon signing of the Agreement, Guangdong Land Shenzhen shall pay 50% of the Safety Measure Fees after the proposal on safety and civilisation measures and construction organisational design be assessed and passed by the engineers and Guangdong Land Shenzhen; and
   2. upon delivery of works inspection information for all works within the context of the Agreement that passes inspection without occurrence of any safety incident, Guangdong Land Shenzhen shall pay the remaining 50% of the Safety Measure Fees;

Other Measure Fees shall be paid by the following means:

1. 1. Guangdong Land Shenzhen shall pay 8% of the sub-project items' progress fees (excluding Levies and Taxes) confirmed in that month while the accumulated payment amount of the progress fees for Other Measure Fees shall not exceed 80% of total Other Measure Fees; and
   2. Guangdong Land Shenzhen shall pay to the Contractor up to 90% of the total Other Measure Fees upon eligible inspection of completion of the works, receipt of the certificate of compliance for works completion and inspection approved under the seal of the engineers and Guangdong Land Shenzhen and transmission of the complete information to Guangdong Land Shenzhen;
2. Remainder of the Consideration
   Remainder of the Consideration shall be paid by the following means:
3. 1. upon confirmation of eligible inspection of completion for the Curtain Wall Work by both parties to the Agreement, the Contractor submits settlement information as required under the relevant provisions of the Agreement. Upon review and issue of written confirmation of the construction price for settlement of completion of the Curtain Wall Work by Guangdong Land

4

Shenzhen, the Contractor shall apply to Guangdong Land Shenzhen for payment for settlement of completion of works while Guangdong Land Shenzhen shall pay to the Contractor up to 97% of the payment for settlement of completion of works (confirmed by Guangdong Land Shenzhen in writing); and

1. the remaining 3% of the Consideration, being work quality bond, shall be paid to the Contractor after deduction of deductible amounts upon the expiration of the works quality warranty period.

In general, the warranty period for waterproofing works and leak-proofing works for waterproof pools, waterscapes, lavatories/rooms and extremal walls is five years. The warranty period for decoration and renovation works is two years. The warranty periods for other works shall be those as required under the relevant rules and regulations of Shenzhen and the PRC (if the relevant rules and regulations are silent on the warranty period, the warranty period for such works shall be two years).

For each of the payments under Work Fees and Measure Fees above, such payment shall be made within 30 days from receipt of the tax invoice for the relevant payment by Guangdong Land Shenzhen from the Contractor.

The Consideration was determined based on the bidding price offered by the Contractor. Tenders were received from a total of 16 bidders, and the Group has considered the quotations, specialised technological know-hows and experience, equipment quality, construction plan, proposed construction period of all 16 bidders for the determination of the successful bidder, among which the quotation and the bidders' relevant experience in carrying out construction works of comparable scale and complexity were the major factors considered by the Group. After conducting an overall evaluation of the tender proposals, the Group awarded the Curtain Wall Work to the Contractor on the basis that it obtained the most votes from the Group's tender evaluation committee. The Contractor's bidding price is within the mid-range of the bidding prices submitted by the bidders and the Company considers that the Consideration was consistent with the Group's estimation of the Curtain Wall Work's contract value having regard to the market price of the curtain wall works that are of similar scale and nature, in particular, the Group has relied on the results of other open tenders published by the Shenzhen Building and Construction Bureau (深圳市住房和建設局).

The Consideration is expected to be funded by the internal resources and/or borrowings of the Group (including bank borrowings and/or loan(s) from the Company's holding company group).

Adjustment mechanism for the Consideration

The Consideration may be adjusted based on the relevant mechanism under the Agreement:

1. Price fluctuations of wages and/or Major Materials
   According to the requirements of the Agreement, when the price fluctuations (not caused by the Contractor) of wages and/or Major Materials (based on the price quoted in "Shenzhen Construction Works Price Information" (《深圳建設工程價 格信息》)) exceed ±5%, the Consideration will be subject to corresponding

5

adjustment while the adjusted amounts shall be determined based on the relevant price fluctuations, the relevant works quantity/materials quantity and the applicable tax rate. The above price fluctuation adjustment is not applicable to any permit issued.

1. Value-addedtax rate adjustments according to the PRC government policy
   According to the terms of the Agreement, in the event that there is any adjustment to the applicable value-added tax rate according to the PRC government policy, the adjusted value-added tax rate would be adopted (and reflected in the value-added tax invoices to be issued by the Contractor), and the amount of the adjustment shall be calculated based on the project price under the Agreement and the difference between the then original and the adjusted value-added tax rates at the relevant time.
2. Change of works and permit after on-site inspections
   The Contractor will submit the changed construction price (including detailed budget of works accompanied with changed budgetary breakdown inclusive of complete changed works quantity calculation sheet and comprehensive order price analysis table) to the engineers within 14 days upon receipt of work change instruction, and the engineers forward the same to Guangdong Land Shenzhen upon review and signing of the express opinion. The changed work fees are confirmed upon the approval of the engineers and Guangdong Land Shenzhen.
   The Contractor has the on-site permit originated and submitted to the engineers with permit budget, accompanied with detailed particulars of the permit budget including complete permitted works quantity calculation sheet and comprehensive order price analysis table, and the engineers forward the same to Guangdong Land Shenzhen upon review and signing of the express opinion. Guangdong Land Shenzhen shall review and confirm the permitted work fees pursuant to the agreed terms of the Agreement.
   According to the terms of the Agreement, the relevant adjustment shall be made in the following manners:
3. 1. whether there is an identical or similar applicable item in the Agreement shall be first referred to and, if any, such price shall be used as basis of price determination;
   2. if there is no identical or similar applicable item in the Agreement, such price shall be arrived at on the bases of the comprehensive order price calculated in compliance with the basis or requirements issued by the relevant official department(s) of the PRC such as "Fixed Consumption for Construction Works in Shenzhen (2016)" (《深圳市建築工程消耗量定額（2016）》), "Fixed Operating Mechanical Capacity per 8-hour Shift for Construction Works in Shenzhen (2014)" (《深圳市建設工程施工機械台班定額 （2014）》), "Consumption Standard for Building Decoration Works in Shenzhen (2003)" (《深圳市建築裝飾工程消耗量標準（2003）》), "Consumption Standard for Installation Work in Shenzhen (2003)" (《深圳 市安裝工程消耗量標準（2003）》), "Composite Price of Municipal

6

Works in Shenzhen (2002)" (《深圳市市政工程綜合價格（2002）》) and the valuation process be published by Shenzhen Construction Engineering Costs Management Station (深圳市建設工程造價管理站), which was applicable during that bidding period, and of the price calculation method(s) as agreed under the Agreement. The labour cost, material fee, and mechanical order price shall follow "Shenzhen Construction Works Price Information" ( 《深圳建設工程價格信息》) issued by the Shenzhen Construction Engineering Costs Management Station (深圳市建設工程造價 管理站) in current period of month of bidding deadline. If "Shenzhen Construction Works Price Information" (《深圳建設工程價格信息》) (in current period of month of bidding deadline) has no such materials and equipment order price, such materials and equipment order price shall be jointly negotiated and confirmed among Guangdong Land Shenzhen, the engineers and the Contractor with reference to their market prices; and

1. if the quotation for the works quantity list of the Agreement does not have any identical or similar and related fixed amount item(s) and there is no information available for reference to the benchmarks or regulations issued by the relevant official departments of the PRC, such prices shall be jointly negotiated and confirmed among Guangdong Land Shenzhen, the engineers and the Contractor with reference to their market prices.

The above adjustments (if any) under items (i) and (ii) would be the result of the fluctuation in wages and/or prices of the materials or adjustments of the value-added tax rate due to the PRC government policy (both of such adjustments could be upward or downward), which are not within the control of both parties to the Agreement. The above adjustments (if any) under item (iii) are slight and insignificant changes needed in light of the design and/or actual situation and therefore the Company considers that the relevant adjustments (if any) will not cause the Consideration to be increased significantly.

Other terms

The Agreement has become effective on 31 July 2020.

Under the Agreement, the period of the Curtain Wall Work is 531 calendar days and the work is expected to be completed on 30 March 2022.

Guarantee

The Contractor shall give an irrevocable guarantee in favour of Guangdong Land Shenzhen in respect of the performance of the duties under the Agreement by the Contractor, up to a maximum amount of 10% of contractual tentative total price (net of the provisionally listed amounts) under the Agreement, being RMB16,226,668.08 (equivalent to approximately HK$18,004,000), for the period from the date of the Agreement to 28 days after passing of inspection of completion of the Curtain Wall Work, submission of all work completion information and issue of proof of delivery of the works for the Curtain Wall Work.

7

1. REASONS FOR AND BENEFITS OF ENTERING INTO THE AGREEMENT

As disclosed in the circular of the Company dated 22 June 2016, the Group has acquired the GDH City Land in June 2016 with the purpose to develop the GDH City Project, being a multi-functional commercial complex with jewelry as the main theme. Guangdong Land Shenzhen selected the Contractor as the constructor for the Curtain Wall Work through open tender.

Based on the following reasons, the Board (including the independent non-executive Directors) considers that the terms and conditions (including adjustment mechanism for the Consideration) of the Agreement are fair and reasonable, on normal commercial terms and are in the interests of the Company and the Shareholders as a whole:

1. Guangdong Land Shenzhen employed the Contractor for the provision of services under the Agreement through open tender, being an open and transparent process. Besides, the Company understands that the Contractor has extensive experience in the curtain wall work business in the PRC. The Directors believe that engaging the Contractor to carry out the Curtain Wall Work would allow the Group to successfully leverage on the technical expertise and experience of the Contractor and to ensure that the Curtain Wall Work will be completed up to the standard as required by Guangdong Land Shenzhen, without devoting the manpower and internal resources of the Group to the Curtain Wall Work, thereby minimising the management and operational costs;
2. The Agreement was based on Shenzhen construction project construction contract (深圳市建設工程施工合同), a standard form construction contract published by Shenzhen Construction Engineering Costs Management Station (深圳市建設工程 造 價 管理 站 ). Such standard form construction contract is widely used in construction projects of similar scale in Shenzhen and the payment terms for each part of the Consideration have followed the terms of such standard form construction contract. The payment terms for each part of the Consideration are in line with the market and industry practice for projects with similar scale;
3. As the construction period as agreed under the Agreement is relatively longer, Guangdong Land Shenzhen and the Contractor could not accurately estimate the fluctuations of wages and prices of the Major Materials of the Curtain Wall Work at the time of entering into the Agreement. Thus, the two-wayadjustment mechanism as mentioned above based on the price quoted in "Shenzhen Construction Works Price Information" (《深圳建設工程價格信息》) is a usual market practice and fair and reasonable to both parties to the Agreement. The adjustment mechanism was formulated with reference to the relevant requirements of "Code of Valuation with Bill Quantity of Construction Works" (《建設工程工 程量清單計價規範》) as promulgated by the Ministry of Housing and Urban- Rural Development of the PRC (中國住房和城鄉建設部);
4. For an adjustment due to a change of value-added tax rate, such adjustment would be due to a change in the relevant PRC government policy. Guangdong Land Shenzhen, as a company incorporated in the PRC, must comply with the relevant laws and regulations. Accordingly, such adjustment event is beyond the control of both parties to the Agreement;

8

1. If the Contractor was to bear the additional costs in relation to the said fluctuations of wages and/or the prices of Major Materials or changes in the value-added tax rate, Guangdong Land Shenzhen might need to accept higher bidding prices (hence higher costs to the Group) or fewer bidders would participate in the tenders for the Curtain Wall Work; and
2. Variation requests are not uncommon during the course of works. To ensure the flexibility of the Curtain Wall Work, an adjustment mechanism as described in the section entitled "B. THE AGREEMENT - Adjustment mechanism for the Consideration - (iii) Change of works and permit after on-site inspections" is, in particular, added into the Agreement and while the relevant adjustment mechanism for the Consideration is customary and fair and reasonable to both parties to the Agreement. In addition, since it is necessary for the Curtain Wall Work to obtain an approval of the documents related to work specifications and scale such as construction plan from the relevant governmental authority(ies) of the PRC before implementation, none of such changes of works can be significantly modified and will lead to significant increase in the Consideration.

The possibility of the transactions contemplated under the Agreement being re-classified as transactions of a higher category under Chapter 14 of the Listing Rules as a result of adjustment to the Consideration (if any) is very low. In the event that the transactions contemplated under the Agreement would fall into a higher transaction threshold classification under Chapter 14 of the Listing Rules as a result of an adjustment to the Consideration, the Company would re-comply with the relevant requirements under the Listing Rules.

1. INFORMATION ON THE GROUP AND GUANGDONG LAND SHENZHEN

The Group is principally engaged in property development and investment businesses. Guangdong Land Shenzhen is an indirectly wholly-owned subsidiary of the Company, and is principally engaged in the development of the GDH City Project and holding the land use rights of the Zhuhai Jinwan Project.

1. INFORMATION ON THE CONTRACTOR

The Company understands that the Contractor is principally engaged in the businesses related to curtain wall construction work, metal window and door work, renovation and decoration construction work, renovation and decoration construction design, curtain wall construction design and steel structure work and etc. The Company understands that the ultimate beneficial owner of the Contractor is China Air Force Armaments Department Factory Administration Bureau (中國空軍裝備部工廠管理局).

9

1. LISTING RULES IMPLICATIONS

Upon the conclusion of the selection of the contractor for the curtain wall visual sample construction work in relation to the Northern Land and the Southern Land under the GDH City Project through tender, on 10 September 2019, Guangdong Land Shenzhen entered into the Curtain Wall Sample Work Agreement with the Contractor at the contract price of RMB2,588,315.16 (equivalent to approximately HK$2,872,000). The scope of the work included, inter alia, supply, installation, testing on the required curtain wall visual samples, construction designs on the curtain wall accessorial steel structure work and the structure reinforcement of the construction attached to the curtain wall samples, etc. Such work was completed in May 2020. On a standalone basis, all the applicable percentage ratios in respect of the Curtain Wall Sample Work Agreement were less than 5%, therefore such transactions did not constitute a notifiable transaction for the Company.

On a standalone basis, since one of the applicable percentage ratios in respect of the Agreement exceeds 5% but all of them are less than 25%, the Agreement constitutes a discloseable transaction for the Company.

Since the Group entered into the Curtain Wall Sample Work Agreement and the Agreement with the same party within twelve months, the Curtain Wall Sample Work Agreement and the Agreement (the "Transactions") are aggregated pursuant to Rule

14.22 of the Listing Rules. Since one of the applicable percentage ratios in respect of the Transactions (on an aggregated basis) exceeds 5% but all of them are less than 25%, the Transactions constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

1. DEFINITIONS

In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise:

In this announcement, the English names of the PRC entities are translations of their Chinese names, and are included herein for identification purposes only. In the event of any inconsistency, the Chinese names shall prevail.

For the purpose of this announcement, unless otherwise specified, conversion of Renminbi, the lawful currency of the PRC, into Hong Kong dollars, the lawful currency of Hong Kong, is based on the approximate exchange rate of HK$1 to RMB0.9013. No representation is made that any amount in HK$ and RMB could be converted at such rate.

By Order of the Board

Guangdong Land Holdings Limited

XU Yeqin

Chairman

Hong Kong, 31 July 2020

As at the date of this announcement, the Board comprises five Executive Directors, namely Mr. XU Yeqin, Mr. LI Yonggang, Mr. WU Mingchang, Ms. ZHU Guang and Mr. ZHANG Jun; and three Independent Non-Executive Directors, namely Mr. Alan Howard SMITH, Mr. Felix FONG Wo and Mr. Vincent Marshall LEE Kwan Ho.

13