Beijing Capital Land : CONTINUING CONNECTED TRANSACTIONS RELATING TO THE FINANCIAL SERVICES FRAMEWORK AGREEMENT

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(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 2868)

CONTINUING CONNECTED TRANSACTIONS

RELATING TO THE FINANCIAL SERVICES

FRAMEWORK AGREEMENT

SUMMARY

The Board is pleased to announce that on 17 February 2020, the Company and Capital Securities entered into the Financial Services Framework Agreement, pursuant to which, Capital Securities shall provide underwriting and/or management services to the Group for the Group's future offering of bonds and/or products in relation to asset securitisation as the case may be, on terms to be provided in separate service agreements to be entered into.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Capital Securities is a subsidiary of Capital Group, the controlling shareholder of the Company, and Capital Securities is therefore a connected person of the Company pursuant to the Listing Rules. Accordingly, the Transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As none of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceed 5%, the Transaction is only subject to the reporting, annual review and announcement requirements but is exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Board is pleased to announce that on 17 February 2020, the Company and Capital Securities entered into the Financial Services Framework Agreement, pursuant to which, Capital Securities shall provide underwriting and/or management services to the Group for the Group's future offering of bonds and/or products in relation to asset securitisation as the case may be, on terms to be provided in separate service agreements to be entered into.

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THE FINANCIAL SERVICES FRAMEWORK AGREEMENT

Date

17 February 2020

Parties

1. the Company; and
2. Capital Securities.

Term

The term of the Financial Services Framework Agreement shall be effective from 17 February 2020 to 31 December 2022, subject to renewal by the parties.

Scope of financial services

Pursuant to the Financial Services Framework Agreement, Capital Securities shall provide services to the Group in the Group's future offering of bonds and/or products in relation to asset securitisation by acting as an underwriter and/or a manager.

Service agreement(s)

The Company and Capital Securities may, from time to time and as necessary, enter into separate service agreement(s) which will set out the detailed terms of the relevant services to the Group, provided that any such agreement(s) shall be entered into in accordance with the terms of the Financial Services Framework Agreement and subject to the Annual Caps.

Pricing basis

The Service Fees for each service agreement shall be on normal commercial terms and negotiated on arm's length basis between the Company and Capital Securities with reference to, among others, the prevailing market rates for service fees, scale of offering and conditions of capital markets in relation to the provision of underwriting and/or management services, and fees charged by Capital Securities for providing relevant services to independent third parties.

Termination

The Financial Services Framework Agreement may be terminated under the following circumstances:

1. the Financial Services Framework Agreement not having been renewed by both Capital Securities and the Company upon expiry of its term;
2. by the consent of both Capital Securities and the Company;

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1. the cancellation of the relevant qualification of Capital Securities for carrying out investment and management activities;
2. Capital Securities having been dissolved, revoked or declared bankrupt by law; and
3. the transactions regarding the offering of bonds and products in relation to asset securitisation to be entered into by the Group are subject to restrictions under applicable laws and regulations.

PROPOSED ANNUAL CAPS AND BASIS

The Annual Caps for the Service Fees payable by the Group to Capital Securities shall be RMB35,000,000 for each of the financial years ending 31 December 2020, 31 December 2021 and 31 December 2022.

In determining the Annual Caps for the Service Fees, the Group has taken into account the following factors:

1. the historical amount of service fees paid to Capital Securities in respect of its provision of underwriting and/or management services to the Group;
2. the expected scale of future offering of bonds and products in relation to asset securitisation to be entered into by the Group assuming that Capital Securities will solely underwrite while the actual Service Fees shall be calculated by reference to the actual amount of bonds and products in relation to asset securitisation being underwritten and/ or managed;
3. the level of service fees chargeable by other service provider(s) which are independent third parties for providing such services of similar nature and scale; and
4. the level of service fees chargeable to the independent third party(ies) by Capital Securities for providing such services of similar nature and scale.

HISTORICAL TRANSACTION AMOUNTS

The historical amounts of service fees paid to Capital Securities by the Group for each of the three years ended 31 December 2019 is set out below.

Period	RMB
For the year ended 31 December 2017	3,300,000
For the year ended 31 December 2018	8,190,764
For the year ended 31 December 2019	8,831,500

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REASONS FOR AND BENEFITS OF THE FINANCIAL SERVICES FRAMEWORK AGREEMENT

Capital Securities has provided related financial services to the Group on a number of occasions in the past. As a result of its long-term working relationship with the Group, Capital Securities is familiar with the Group's capital structure, business operations and financing needs. Therefore, Capital Securities will be in a better position to provide the Group with more suitable, effective and flexible financial services on the same or more favourable terms compared with that of other financial institutions.

Internal control measures

The Financial Services Framework Agreement is on a non-exclusive basis and the Group retains a discretion in electing its service provider for underwriting and/or management services for its capital market financing activities, if any. Nevertheless, the Company will still adopt internal control measures to ensure that the continuing connected transactions contemplated under the Financial Services Framework Agreement will be implemented in accordance with the terms and conditions therein, including measures to monitor the terms of the service agreement(s) to be on normal commercial terms and no less favourable than terms of independent third parties for similar services.

The independent non-executive Directors will, and the Company will engage its external auditors to, conduct annual review of the continuing connected transactions in accordance with the Listing Rules requirements. Further, the Company and Capital Securities will ensure sufficient communication between both parties and monitor the implementation of the arrangements under the Financial Services Framework Agreement.

The Directors (including the independent non-executive Directors) are of the view that the Financial Services Framework Agreement and the transactions contemplated thereunder are on normal commercial terms or better, fair and reasonable, no less favourable than the level of charges chargeable by independent third parties in respect of the provision of similar services and in the ordinary and usual course of business of the Group, and in the interests of the Company and the Shareholders as a whole, and that the Annual Caps are fair and reasonable, and in the interests of the Company and the Shareholders as a whole.

Save for Li Songping and Su Jian, who, for reasons of their directorships and/or management roles in Capital Group, have abstained from voting on a voluntary basis, none of the other Directors have a material interest in the Financial Services Framework Agreement and the transactions contemplated thereunder under the Listing Rules and therefore no other Director was required to abstain from voting on the relevant resolution of the Board approving the Financial Services Framework Agreement and the transactions thereunder.

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LISTING RULES IMPLICATIONS

As at the date of this announcement, Capital Securities is a subsidiary of Capital Group, the controlling shareholder of the Company, and is therefore a connected person of the Company pursuant to the Listing Rules. Accordingly, the Transaction constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As none of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) exceed 5%, the Transaction is only subject to the reporting, annual review and announcement requirements but is exempt from independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

GENERAL INFORMATION ON THE PARTIES

The Company

The Company is a joint stock company incorporated in the PRC with limited liability, whose H shares are listed on the Main Board of the Stock Exchange (Stock Code: 2868). The Company is a leading large integrated real estate developer in the PRC, focusing primarily on developing the four main business streams of residential properties, integrated outlets, urban core integrated complexes and primary land development, complemented by innovative business areas such as high-tech industry properties, cultural and creative industries and rental housing.

Capital Securities

Capital Securities is a company established in the PRC with limited liability and a subsidiary of Capital Group, and is principally engaged in the businesses of securities brokerage, underwriting, self-investment, investment consulting, asset management, investment banking and direct investment.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the meaning ascribed to them below:

"Annual Caps"	the proposed annual caps for the Service Fees payable by
	the Group to Capital Securities for the three years ending 31
	December 2020, 31 December 2021 and 31 December 2022
	as set out in the section headed "Proposed Annual Caps and
	Basis" in this announcement
"Board"	the board of Directors
"Capital Group"	Beijing Capital Group Co., Ltd.* (北京首都創業集團有限公
	司), a state-owned enterprise incorporated in the PRC on 26
	October 1994 and under the direct supervision of the Beijing
	Municipal Government, the controlling shareholder of the
	Company and a connected person of the Company
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"Capital Securities"

"Company"

Capital Securities Co., Ltd.* (首創證券有限責任公司)

Beijing Capital Land Ltd. (首創置業股份有限公司), a joint stock company incorporated under in the PRC with limited liability and whose H shares are listed and traded on the Main Board of the Stock Exchange

"Director(s)"	the director(s) of the Company
"Financial Services	the Financial Services Framework Agreement dated 17
Framework Agreement"	February 2020 entered into between the Company and
	Capital Securities in relation to the provision of underwriting
	and/or management services by Capital Securities to the
	Group in connection with the Group's offering of bonds and
	products in relation to asset securitisation
"Group"	the Company and its subsidiaries
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"independent third	person(s) or company(ies) which is/are not connected with
party(ies)"	the Company and Capital Securities, and is/are not connected
	person(s) of the Company and Capital Securities
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange, as amended and modified from time to time
"PRC"	the People's Republic of China, which for the purpose of this
	announcement only, excludes Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Service Fee(s)"	the rate(s) of service fee(s) payable by the Group to Capital
	Securities under the service agreement(s)
"Shareholder(s)"	holder(s) of the share(s) of the Company
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Transaction"	the provision of underwriting and/or management services
	by Capital Securities to the Group in connection with the
	Group's offering of bonds and products in relation to asset
	securitisation pursuant to the terms of the Financial Services
	Framework Agreement
"%"	per cent.

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In this announcement, unless the context requires otherwise, the terms "connected person(s)", "connected transaction(s)", "controlling shareholder(s)", "percentage ratio" and "subsidiary(ies)" shall have the meanings given to such terms in the Listing Rules.

• The English name is a translation of its Chinese name and is included for identification purposes only.

By Order of the Board

Beijing Capital Land Ltd.

Lee Sze Wai

Company Secretary

Hong Kong, 17 February 2020

The Board as of the date of this announcement comprises Mr. Li Songping (Chairman) who is the non-executive Director, Mr. Zhong Beichen (President), Mr. Li Xiaobin, Mr. Hu Weimin and Mr. Fan Shubin who are the executive Directors, Mr. Su Jian who is the non-executive Director, and Mr. Li Wang, Mr. Wong Yik Chung, John and Mr. Liu Xin who are the independent non-executive Directors.

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