Joy City Property : MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN JINAN, THE PRC

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares in Joy City Property Limited, you should at once hand this circular together with the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

MAJOR TRANSACTION

ACQUISITION OF LAND USE RIGHTS

IN JINAN, THE PRC

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ''Definitions'' in this circular.

A letter from the Board is set out on pages 3 to 10 of this circular.

25 November 2019

CONTENTS
	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX I - FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . .	I-1
APPENDIX II - GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1

- i -

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

''Acquisition''	the acquisition of land use rights of the Land through public
	bidding process at the Auction
''Auction''	the public auction held by the Jinan Bureau of Land and
	Resources at which the Land was offered for sale
''Board''	the board of Directors
''Company''	Joy City Property Limited (大悅城地產有限公司), a company
	incorporated under the laws of Bermuda with limited liability,
	the ordinary shares of which are listed on the Main Board of the
	Stock Exchange
''Confirmation Letter''	the confirmation letter of Jinan city land use rights grant by
	auction (成交確認書) entered into between the Project Company
	and the Jinan Bureau of Land and Resources confirming the
	Acquisition at the Auction on 8 October 2019
''Consideration''	RMB3,144,410,000, being the price for the grant of the land use
	rights of the Land
''Directors''	the directors of the Company
''Group''	the Company and its subsidiaries
''Hong Kong''	the Hong Kong Special Administrative Region of the PRC
''Jetway Developments	Jetway Developments Limited (亨達發展有限公司), a company
Limited''	incorporated in Samoa and a direct wholly-owned subsidiary of
	the Company
''Jinan Bureau of Land	Jinan Bureau of Land and Resources (濟南市自然資源和規劃局)
and Resources''
''Jinan Licheng	Jinan Licheng Holdings Group Company Limited* (濟南歷城控
Holdings''	股集團有限公司), a limited liability company incorporated in the
	PRC
''Land''	the plots of land described under the section headed ''2. The
	Result of the Bid'' in the Letter from the Board in this circular
	with a total site area of approximately 211,748 square meters
	which was offered for sale at the Auction
''Land Use Rights	the land use rights grant contract (國有建設用地使用權出讓合同)
Grant Contract''	entered into between the Project Company and Jinan Bureau of
	Land and Resources in respect of the Land on 17 October 2019

- 1 -

	DEFINITIONS
''Latest Practicable	21 November 2019, being the latest practicable date prior to the
Date''	printing of this circular for ascertaining certain information in
	this circular
''Listing Rules''	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
''PRC''	the People's Republic of China, which shall, for the purpose of
	this circular, exclude Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
''PRC Governmental	has the meaning ascribed to it under the Listing Rules
Body''
''PRC law''	has the meaning ascribed to it under the Listing Rules
''Project Company''	Jinan Joy City Property Development Company Limited*
	(濟南大悅城產業發展有限公司), a limited liability company
	incorporated in the PRC which equity interest is held as to
	60% and 40% by Jetway Developments Limited and Jinan
	Licheng Holdings, respectively
''RMB''	Renminbi, the lawful currency of the PRC
''SFO''	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
''Shareholders''	the holders of the Shares
''Shares''	the ordinary shares of the Company
''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''%''	per cent

The shareholding of the respective Shareholder in the Company as disclosed in this circular refers to the percentage shareholding of such Shareholder to the issued share capital of the Company, without taking into account the non-redeemable convertible preference shares issued by the Company or the potential effect on the shareholding upon conversion of the non-redeemable convertible preference shares, unless otherwise stated.

In this circular, unless the context otherwise requires, the terms ''close associate(s)'', ''connected person(s)'', ''controlling shareholder(s)'', ''percentage ratios'', ''subsidiary(ies)'', ''substantial shareholder(s)'', ''Qualified Issuer'' and ''Qualified Property Acquisition'' shall have the meanings given to such terms in the Listing Rules, as modified by the Stock Exchange from time to time.

The English names of Chinese entities marked with ''*'' are translations of their Chinese names and are included in this circular for identification purpose only, and should not be regarded as their official English translation. In the event of any inconsistency, the Chinese name prevails.

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LETTER FROM THE BOARD

Executive Directors:	Registered office:
Mr. ZHOU Zheng (Chairman)	Clarendon House
Mr. CAO Ronggen	2 Church Street
	Hamilton HM11
Non-executive Director:	Bermuda
Mr. JIANG Yong
	Principal place of business in Hong Kong:
Independent non-executive Directors:	33/F., COFCO Tower
Mr. LAU Hon Chuen, Ambrose GBS, JP	262 Gloucester Road
Mr. LAM Kin Ming, Lawrence	Causeway Bay
Mr. WU Kwok Cheung MH	Hong Kong
	25 November 2019

To the Shareholders and holders of the convertible preference shares (for information only)

Dear Sir or Madam,

MAJOR TRANSACTION

ACQUISITION OF LAND USE RIGHTS

IN JINAN, THE PRC

1. INTRODUCTION

Reference is made to the announcement of the Company dated 30 September 2019 in relation to the acquisition of land use rights in Jinan, the PRC. On 29 September 2019, the Project Company (an indirect non wholly-owned subsidiary of the Company) has been notified by the Jinan Bureau of Land and Resources that it has successfully bid for the land use rights of the Land offered for sale by the Jinan Bureau of Land and Resources at the Auction for RMB3,144,410,000. The Confirmation Letter was entered into between the Project Company and the Jinan Bureau of Land and Resources on 8 October 2019 and the Land Use Rights Grant Contract in relation to the Acquisition was entered into between the Project Company and the Jinan Bureau of Land and Resources on 17 October 2019. As of the Latest Practicable Date, the Consideration has been paid in full by the Project Company and the security deposit for the Auction of RMB1,149,000,000 has formed part of this

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LETTER FROM THE BOARD

payment. The Project Company was established for the purpose of the Acquisition and the development of the Land. As of the Latest Practicable Date, the equity interest of the Project Company was owned as to 60% and 40% by Jetway Developments Limited (a direct wholly-owned subsidiary of the Company) and Jinan Licheng Holdings (an independent third party of the Company), respectively, and the Acquisition has completed, therefore the Company indirectly holds the interests in the Land through the Project Company.

The purpose of this circular is to provide you with, among other things, further details of the Acquisition and such other information as required under the Listing Rules.

2. THE RESULT OF THE BID

Date	:	29 September 2019
Successful bidder	:	the Project Company, an indirect non wholly-owned
		subsidiary of the Company
Location of the Land	: The Land is located north of Gong Ye Bei Road and west
		of Ji Gang in Wang She Ren Pian District (王舍人片區工
		業北路以北、濟鋼西臨), Jinan, the PRC
Total site area	: approximately 211,748 square meters
Total planned gross	:	approximately 767,562 square meters
floor area
Proposed use of the	:	Commercial and residential
Land
Term of the land use	: 40 years for commercial use and 70 years for residential
right		use
Consideration	: RMB3,144,410,000, which was the bidding price of the
		Land submitted by the Project Company at the Auction

held by the Jinan Bureau of Land and Resources. The Project Company will pay 50% of the Consideration within 30 days of the date of the Land Use Rights Grant Contract and the remaining 50% of the Consideration within 90 days of the date of the Land Use Rights Grant Contract.

As of the Latest Practicable Date, the Consideration has been paid by the Project Company in full and the security deposit of RMB1,149,000,000 has formed part of this payment.

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LETTER FROM THE BOARD

3. THE CONFIRMATION LETTER

Date	:	8 October 2019
Parties	:	(1) the Project Company, an indirect non wholly-owned
		subsidiary of the Company; and
		(2) Jinan Bureau of Land and Resources.
Location of the Land	: The Land is located north of Gong Ye Bei Road and west
		of Ji Gang in Wang She Ren Pian District (王舍人片區工
		業北路以北、濟鋼西臨), Jinan, the PRC
Total site area	: approximately 211,748 square meters
Total planned gross	:	approximately 767,562 square meters
floor area
Proposed use of the	:	Commercial and residential
Land
Term of the land use	: 40 years for commercial use and 70 years for residential
right		use
Consideration	: RMB3,144,410,000, which was the bidding price of the
		Land submitted by the Project Company at the Auction
		held by the Jinan Bureau of Land and Resources. The
		Project Company will pay 50% of the Consideration
		within 30 days of the date of the Land Use Rights Grant
		Contract and the remaining 50% of the Consideration

within 90 days of the date of the Land Use Rights Grant Contract.

As of the Latest Practicable Date, the Consideration has been paid by the Project Company in full and the security deposit of RMB1,149,000,000 has formed part of this payment.

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LETTER FROM THE BOARD

4. MAJOR TERMS OF THE LAND USE RIGHTS GRANT CONTRACT

Date	:	17 October 2019
Parties	:	(1) the Project Company (as the transferee); and
		(2) Jinan Bureau of Land and Resources (as the
		transferor).
Payment terms of the	: The Project Company will pay 50% of the Consideration
Consideration		within 30 days of the date of the Land Use Rights Grant
		Contract and the remaining 50% of the Consideration
		within 90 days of the date of the Land Use Rights Grant
		Contract.
Commencement of	:	On or before 16 October 2020
construction
Completion of	:	On or before 16 October 2023
construction
Conditions of the land	:	(a) the residential plot ratio shall be more than 1.5 and
use right		no more than 2.4 and the commercial plot ratio shall
		be more than 1.2 and no more than 3.5;

1. the building height limit shall be 100 metres;
2. the green space ratio shall comply with applicable laws and regulations; and
3. the residential building density shall be no more than 22% and the commercial building density shall be no more than 50%.

5. THE DEVELOPMENT PLAN OF THE LAND

It is expected that the Land will be developed in four phases, of which the first, second and third phases are planned to be residential (such as residential apartments) and the forth phase is planned to be commercial (such as offices and shopping mall). The earliest time for commencement of construction on the Land is expected to be around October 2020, the earliest time for completion of construction is expected to be around October 2023 and the earliest time for pre-sale of properties is expected to be around August 2020. The construction costs for developing the Land is estimated to be not more than RMB3,121,180,000, which is expected to be funded by external borrowings and funds from property sales of the Project Company. The Project Company will, in accordance with the practical market conditions, make adjustment to the actual arrangements of the construction and development of the Land.

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LETTER FROM THE BOARD

6. BASIS OF THE CONSIDERATION

The Consideration was arrived at as a result of successful bidding of the Land by the Project Company at the Auction using the land use right online trading system of the Jinan Bureau of Land and Resources, which was conducted in accordance with the relevant PRC laws and regulations. The Project Company set the bid price for the Land after taking into account (i) the minimum bid price for the Land listed by the Jinan Bureau of Land and Resources at the Auction of RMB3,144,410,000; (ii) the current property market conditions in Licheng District of Jinan; (iii) the strategic location of the Land in the core suburbs of Jinan City and a transport hub; (iv) the Land's average floor area price is among the prices of land plots in the surrounding area auctioned recently; and (v) the development potential of the Land. In view of the factors above, the Directors consider that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The aggregate costs relating to the Acquisition, including the Consideration and related tax and administration costs, is expected to be approximately RMB3,280,000,000, which will be funded by the Group and Jinan Licheng Holdings on a pro rata basis according to their respective shareholding interest in the Project Company. Accordingly, the total contribution to the Project Company by the Group is expected to be approximately RMB1,968,000,000, which will be financed by its internal resources, namely the cash and cash equivalents of the Group.

7. THE PROJECT COMPANY

On 17 September 2019, Jetway Developments Limited (a direct wholly-owned subsidiary of the Company) and Jinan Licheng Holdings (an independent third party of the Company) entered into the Joint Venture Agreement on an arm's length basis and on normal commercial terms, pursuant to which (a) Jetway Developments Limited and Jinan Licheng Holdings will initially contribute RMB715,000,000 and RMB476,666,666 in the registered capital of the Project Company, representing 60% and 40% of the equity interest of the Project Company respectively; and (b) Jetway Developments Limited and Jinan Licheng Holdings will, through the Project Company, jointly acquire the Land at the Auction and develop the Land.

Pursuant to the Joint Venture Agreement, (a) the board of directors of the Project Company will comprise of 5 directors, of which 3 directors will be appointed by Jetway Development Limited and 2 directors will be appointed by Jinan Licheng Holdings, and the chairman of the board of directors will be appointed by Jetway Development Limited; (b) the Consideration will be funded by the shareholders of the Project Company on a pro rata basis in proportion to their respective shareholding interests in the Project Company through shareholders' loans and capital contribution and the construction costs for developing the Land will be funded by the Project Company through external borrowings and funds from property sales with the remaining balance, if any, to be funded by the shareholders of the Project Company on a pro rata basis; (c) the dividends and distributions of the Project Company will be made to its shareholders on a pro rata basis in proportion to their respective shareholding interests in the Project Company; (d) the scope of business of the Project Company may not be changed without the unanimous consent of the

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LETTER FROM THE BOARD

shareholders of the Project Company; and (e) the Project Company may not enter into any transactions which are not on an arm's length basis without the unanimous consent of the shareholders of the Project Company.

The Directors consider that the terms and conditions of the Joint Venture Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

As of the Latest Practicable Date, the Acquisition has completed and the Company indirectly holds the interests in the Land through the Project Company. As the Project Company is owned as to 60% and 40% by Jetway Developments Limited and Jinan Licheng Holdings, respectively, as of the Latest Practicable Date and an indirect non wholly-owned subsidiary of the Company, the financial results, assets and liabilities of the Project Company will be consolidated into the accounts of the Group.

8. REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in development, operation, sales, leasing and management of mixed-use complexes and commercial properties in the PRC.

The Land is located in a prime area of Licheng District of Jinan, which is strategically located in the core suburbs of Jinan City and a transport hub, therefore it is considered suitable for development of integrated commercial and residential properties. In view of the location and the designated use of the Land, it is expected to achieve high investment value after completion of the development of the Land, and thus generate stable and satisfactory revenue and profit to the Group. The Directors consider that the Acquisition is in line with the business development strategy and planning of the Group and will uphold the brand image of Joy City as a leading complex and commercial property developer and operator in the PRC, whilst leveraging on the resources of the Group and Jinan Licheng Holdings.

The Directors consider the Acquisition is in the Group's ordinary and usual course of business and the Acquisition is in the interests of the Company and the Shareholders as a whole, and the terms thereof are on normal commercial terms, which are fair and reasonable.

9. INFORMATION ON THE PARTIES

The Company is an investment holding company incorporated in Bermuda. The Group is principally engaged in development, operation, sales, leasing and management of mixed- use complexes and commercial properties in the PRC. The Group develops, holds and operates various property projects in the PRC and Hong Kong.

Jetway Developments Limited is a company incorporated in Samoa with limited liability and a wholly-owned subsidiary of the Company. Jetway Developments Limited is principally engaged in property development and investment in the PRC.

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LETTER FROM THE BOARD

The Project Company is a limited liability company incorporated in the PRC which equity interest is held as to 60% and 40% by Jetway Developments Limited and Jinan Licheng Holdings, respectively. The Project Company was established for the purpose of the development of the Land.

Jinan Licheng Holdings is a limited liability company incorporated in the PRC and is principally engaged in property development and investment in the PRC. The ultimate beneficial owner of Jinan Licheng Holdings is the Finance Bureau of Licheng District, Jinan City.

The Jinan Bureau of Land and Resources is a PRC governmental authority and the seller of the Land.

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, Jinan Licheng Holdings and the Jinan Bureau of Land and Resources and their respective ultimate beneficial owners are third parties independent of the Group and its connected persons.

10. FINANCIAL EFFECTS OF THE ACQUISITION OF THE COMPANY

As the Group is expected to finance its contribution to the Consideration using its internal resources, the total investment properties and inventories of the Group was increased by approximately RMB3,280 million and the Group's net cash position was decreased by approximately RMB1,968 million, and the remaining portion of the Consideration will be contributed by Jinan Licheng Holdings based on its respective shareholding interest in the Project Company. As such, the total assets and the total liabilities of the Group did not have any material change as a result of the Acquisition. The Company considers that there was not any material effect on the earnings of the Group as a result of the Acquisition.

11. LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Acquisition exceeds 25% but are all less than 100%, the transaction contemplated under the Acquisition constitutes a major transaction for the Company. As the Group's principal businesses include property development, the Company is regarded as a ''Qualified Issuer'' and the Acquisition involves an acquisition of governmental land(s) from a PRC Governmental Body through auction governed by the PRC law and thus is regarded as a ''Qualified Property Acquisition'' under Rule 14.04(10B) and (10C) of the Listing Rules. As such, the Acquisition is subject to reporting and announcement requirements and are exempt from shareholders' approval requirements pursuant to Rule 14.33A of the Listing Rules.

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LETTER FROM THE BOARD

12. ADDITIONAL INFORMATION

The Directors believe that the terms of the Confirmation Letter and the Land Use Rights Grant Contract and the transaction contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. None of the Directors have any material interest in the Confirmation Letter or the Land Use Rights Grant Contract.

Your attention is also drawn to the additional information set out in the appendices to this circular.

By order of the Board

Joy City Property Limited

Zhou Zheng

Chairman

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APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

1. CONSOLIDATED FINANCIAL STATEMENTS

Details of the financial information of the Group for each of the financial years ended 31 December 2016, 31 December 2017 and 31 December 2018 and the six months period ended 30 June 2019 are disclosed in the following documents which have been published on both the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.joy-cityproperty.com):

. interim report of the Group for the six months period ended 30 June 2019 published on 16 September 2019 (pages 70 to 128) (available on: https:// www1.hkexnews.hk/listedco/listconews/sehk/2019/0916/ltn20190916137.pdf);

. annual report of the Group for the year ended 31 December 2018 published on 23 April 2019 (pages 135 to 287) (available on: https://www1.hkexnews.hk/listedco/ listconews/sehk/2019/0423/ltn20190423590.pdf);

. annual report of the Group for the year ended ended 31 December 2017 published on 12 April 2018 (pages 140 to 279) (available on: https://www1.hkexnews.hk/ listedco/listconews/sehk/2018/0412/ltn20180412311.pdf); and

. annual report of the Group for the year ended 31 December 2016 published on 21 April 2017 (pages 119 to 226) (available on: https://www1.hkexnews.hk/listedco/ listconews/sehk/2017/0421/ltn20170421538.pdf).

2. INDEBTEDNESS STATEMENT Borrowings

As at the close of business on 30 September 2019, being the latest practicable date for the purpose of determining the indebtedness of the Group prior to the printing of this circular, the Group had total borrowings amounting to approximately RMB32,020 million, details of which are as follows:

(i) Bank borrowings

As at the close of business on 30 September 2019, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had aggregate outstanding bank borrowings of approximately RMB18,984 million, details of which are set out below:

Bank borrowings	RMB'000
Short term bank loans, unsecured and unguaranteed	1,571,445
Long term bank loans, unsecured and unguaranteed	3,107,836
Long term bank loans, secured and guaranteed	563,464
Long term bank loans, unsecured and guaranteed	2,575,381
Long term bank loans, secured and unguaranteed	11,165,596
	18,983,722

- I-1 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

As at 30 September 2019, bank borrowings of RMB4,965 million, RMB4,397 million, RMB5,311 million and RMB4,311 million will be repaid within one year, in the second year, in the third to fifth year, and beyond five years, respectively.

(ii) Loans from fellow subsidiaries

As at the close of business on 30 September 2019, the Group had outstanding loans from fellow subsidiaries of approximately RMB1,489 million, of which RMB1,098 million were unsecured and unguaranteed, and RMB391 million was unsecured and guaranteed.

(iii) Loan from a non-controlling interest

As at the close of business on 30 September 2019, the Group had outstanding amount due to a non-controlling shareholder of a subsidiary of approximately RMB661million, which was unsecured and unguaranteed.

(iv) Loan from a third party

As at the close of business on 30 September 2019, the Group had outstanding loan from a third party of approximately RMB977 million, which was unsecured and unguaranteed.

(v) Bonds

As at the close of business on 30 September 2019, the Group had a total amount of outstanding bonds of RMB9,909 million, of which RMB5,733 million were guarantee notes, and RMB4,176 million were bonds payable, which unsecured and unguaranteed.

Charges

As at the close of business on 30 September 2019, the Group's secured borrowings were secured by certain of the Group's investment properties with a carrying amount of RMB35,878 million, property, plant and equipment with a carrying amount of RMB2,724 million, properties under development for sale with a carrying amount of RMB7,757 million and right-of-use assets with a carrying amount of RMB1,626 million.

Lease liabilities

As at the close of business on 30 September 2019, the Group, as a leasee, has outstanding unpaid contractual lease payments for the remainder of the relevant lease terms amounting to RMB206 million, which are neither secured nor guaranteed.

- I-2 -

APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

Contingent liabilities

1. The Group has certain non-compliance incidents which are relating to the failure to comply with certain terms and conditions of the relevant construction works planning permits in respect of two projects, Chaoyang Joy City and Shenyang Joy City. The Group may be subject to the losses including a fine of up to 10% of the construction costs, demolishment of the relevant property and confiscation of any illegal revenue.
   The construction costs of Chaoyang Joy City amounted to RMB3,343 million, including the cost for the non-compliant structure of RMB42 million. The non- compliant structure has been occupied as office and has not generated any revenue. Chaoyang Joy City generated revenue since the year 2010. The aggregate revenue of the shopping mall of Chaoyang Joy City since it generated revenue up to 30 September 2019 amounted to RMB4,529 million.
   The construction costs of Shenyang Joy City amounted to RMB1,907 million, including an estimated cost for the excess area of RMB81 million. Shenyang Joy City generated revenue since the year 2009. The aggregate revenue of Shenyang Joy City since it generated revenue up to 30 September 2019 amounted to RMB2,172 million.
   Based on the reasons and circumstances of these non-compliances and the PRC legal advice, the management of the Group considers that the risk of above losses is remote, and accordingly, no provision has been made. In addition, COFCO Corporation, the ultimate holding company of the Company, has undertaken to indemnify the Company against all the above losses in connection with the above non-compliances.
2. As at the close of business on 30 September 2019, the Group was involved in a number of legal proceedings and claims against it in the ordinary course of business. After taking into account the legal advice, the provision for probable losses for a pending legal proceeding and claim of RMB3,000,000 which is recorded in other payables and accruals.
   Except for above, other legal proceedings in the PRC have been initiated against certain subsidiaries of the Group in respect of the total claims of approximately RMB45 millions under the disputes against construction contracts, leases contracts and property sale contracts. As at the Latest Practicable Date, no liabilities have materialised for any PRC subsidiaries of the Group. The Company is of the view that based on past experience, the probability of loss for these legal proceedings is remote and the total amounts of the claims do not have material effect to the Group. Hence, no provision was made in respect of these legal proceedings.
3. As at the close of business on 30 September 2019, the Group had provided guarantees to certain banks relating to mortgage facilities arranged for certain buyers of properties developed by the Group and the outstanding mortgage loans under these guarantees amounted to RMB2,633 million.

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APPENDIX I	FINANCIAL INFORMATION OF THE GROUP

General

Save as aforesaid and apart from intra-group liabilities, the Group did not have any debt securities, issued and outstanding, and authorised or otherwise created but unissued, any other outstanding loan capital, any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and liabilities under acceptance (other than normal trade bills) or similar indebtedness, debentures, mortgages, charges, loans, acceptance credits, hire purchase commitments, guarantees or other material contingent liabilities at the close of business on 30 September 2019.

3. WORKING CAPITAL

The Directors are satisfied after due and careful consideration and taking into account the present internal financial resources available to the Group, the banking facilities presently available, the effect of the Acquisition and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements for at least twelve months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2018, being the date to which the latest published audited consolidated accounts of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

As disclosed in 2019 interim report of the Company, gross revenue of the Group amounted to RMB6,732,035,000 for the six months ended 30 June 2019. Gross profit and net profit of the Group amounted to RMB3,573,079,000 and RMB1,690,516,000 respectively for the six months ended 30 June 2019. Total assets and total equity amounted to approximately RMB102,670,935,000 and RMB44,937,454,000 respectively as at 30 June 2019.

The Group's liquidity remained on a healthy level and financial resources were also reasonably distributed. As at 30 June 2019, the Group's cash and bank balances, pledged deposits and restricted bank deposits totalled RMB9,627,482,000. The majority of the Group's cash and bank balances, pledged deposits and restricted bank deposits are deposited with creditworthy banks with no recent history of default. As at 30 June 2019, the Group's net gearing ratio was 50.2%, based on the division of net debt by total equity.

Save and except for the transactions already disclosed in announcements and circulars of the Company prior to the Latest Practicable Date, the Company did not have any intention, negotiation, agreement, arrangement and understanding (concluded or otherwise) about (i) the acquisition of any new business; (ii) any disposal, scaling-down and/or termination of its existing business and/or major operating assets; and (iii) the injection of any new business to the Group.

- I-4 -

APPENDIX II	GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTEREST BY DIRECTORS

1. As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were (i) required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she has taken or was deemed to have under such provisions of the SFO); (ii) required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to the Company and the Stock Exchange were as follows:

Long Positions

	Company/name of		Number of issued	Approximate
Name of Directors/	associated		ordinary shares	percentage of the
chief executive	corporations	Capacity	held (Note 1) issued share capital
Mr. JIANG Yong	The Company	Beneficial owner	300,000	0.00%	(Note 2)
	China Foods	Beneficial owner	50,000	0.00%	(Note 3)
	Limited
Mr. LAM Kin Ming,	The Company	Beneficial owner	6,000	0.00% (Note 2)
Lawrence

Notes:

1. Long positions in the shares of the Company or its associated corporations, other than equity derivatives such as share options, warrants or convertible bonds.
2. The percentage (rounded to 2 decimal places) was calculated based on the total number of ordinary shares of the Company in issue as at 30 June 2019, i.e. 14,231,124,858 ordinary shares.
3. The percentage (rounded to 2 decimal places) were calculated based on the total number of ordinary shares of China Foods Limited in issue as at 30 June 2019, i.e. 2,797,223,396 ordinary shares.

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APPENDIX II	GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company has any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which are (i) required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she is taken or was deemed to have under such provisions of the SFO); (ii) required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to the Company and the Stock Exchange.

1. As at the Latest Practicable Date, (i) Mr. Zhou Zheng is the deputy president of COFCO Corporation, the chairman of the board of Grandjoy Holdings and a director of both Vibrant Oak and Achieve Bloom; (ii) Mr. Cao Ronggen is a director and general manager of Grandjoy Holdings; and (iii) Mr. Jiang Yong is an employee of COFCO Corporation and a director of Grandjoy Holdings.
   Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company was a director or employee of a company which has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.
2. As at the Latest Practicable Date, no Directors had any existing or proposed service contracts with the Company or any of its subsidiaries which is not determinable within one year without payment of compensation other than statutory compensation.
3. As at the Latest Practicable Date, none of the Directors had direct or indirect material interest in any assets which have been, since 31 December 2018 (being the date to which the latest published audited financial statements of the Company were made up), acquired or disposed of by or leased to or by or proposed to be acquired or disposed of by or leased to or by any member of the Group.
4. There is no contract or arrangement subsisting at the date of this circular in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

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APPENDIX II	GENERAL INFORMATION

3. SUBSTANTIAL SHAREHOLDERS

So far as it is known to the Directors, as at the Latest Practicable Date, the following persons (not being a Director or chief executive of the Company) had an interest or short position in the Shares or the underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

				Approximate
				percentage of
Name of substantial		Number of	the issued share
shareholders	Class of shares	shares held	capital
				(Note 1)
COFCO Corporation	Ordinary shares	9,501,359,644	(L)	66.76%
		(Note 2)
	CPS	1,095,300,778	(L)	100%
		(Note 3)
COFCO (Hong Kong)	Ordinary shares	9,501,359,644	(L)	66.76%
Limited		(Note 2)
(''COFCO (HK)'')
	CPS	1,095,300,778	(L)	100%
		(Note 3)
Vibrant Oak Limited	Ordinary shares	9,133,667,644	(L)	64.18%
(''Vibrant Oak'')		(Note 2)
Grandjoy Holdings	Ordinary shares	9,133,667,644	(L)	64.18%
Group Co., Ltd.
(''Grandjoy Holdings'')
Achieve Bloom Limited	Ordinary shares	367,692,000	(L)	2.58%
(''Achieve Bloom'')
	CPS	1,095,300,778	(L)	100%
GIC Private Limited	Ordinary shares	1,135,920,000	(L)	7.98%
		(Note 4)
Citigroup Inc.	Ordinary shares	1,074,982,763	(L)	7.55%
		8,000 (S)	0.00%
		1,074,928,763 (P)	7.55%

Notes:

1. The percentages (rounded to 2 decimal places) of the Shares were calculated based on the total number of Shares in issue as at the Latest Practicable Date and assuming that 1,095,300,778 CPS were not fully converted into 1,095,300,778 Shares.

The percentages of CPS were calculated based on 1,095,300,778 CPS in issue as at the Latest Practicable Date.

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APPENDIX II	GENERAL INFORMATION

1. Vibrant Oak, through its non-wholly owned subsidiary, Grandjoy Holdings, was deemed to be interested in 9,133,667,644 Shares as at the Latest Practicable Date.
   COFCO (HK), through its wholly-owned subsidiaries, Achieve Bloom and Vibrant Oak, and through its non-wholly owned subsidiary, Grandjoy Holdings, was deemed to be interested in 9,501,359,644 Shares as at the Latest Practicable Date.
   COFCO Corporation, through its wholly-owned subsidiary, COFCO (HK), was deemed to be interested in 9,501,359,644 Shares as at the Latest Practicable Date.
2. COFCO (HK), through its wholly-owned subsidiary, Achieve Bloom, was deemed to be interested in 1,095,300,778 CPS as at the Latest Practicable Date.
   COFCO Corporation, through its wholly-owned subsidiary, COFCO (HK), was deemed to be interested in 1,095,300,778 CPS as at the Latest Practicable Date.
3. GIC Private Limited held 1,135,920,000 Shares as investment manager as at the Latest Practicable Date.

1. Indicates a long position.

1. Indicates a short position.

1. Indicates a lending pool.

Save as disclosed above, as at the Latest Practicable Date, so far as was known to any Director or chief executive of the Company, other than a Director or chief executive of the Company, no persons had interests or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

4. MATERIAL CONTRACTS

The Group has entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years preceding the date of this circular which is or may be material:

1. the sale and purchase agreement entered into between Rich Harbour Enterprises Limited and COFCO (BVI) No. 17 Limited (both wholly-owned subsidiaries of the Company) and Tianfu Fund Management Co., Ltd. on 8 December 2017, pursuant to which Rich Harbour Enterprises Limited and COFCO (BVI) No. 17 Limited agreed to dispose the entire equity interest in COFCO Hotel (Beijing) Co., Ltd. (中糧酒店（北京）有限公司) through public sale on the Shanghai Equity Exchange for the consideration of approximately RMB1,360,000,000;
2. the financial services agreement entered into between the Company, COFCO Finance Company Limited (a connected person of the Company) and Joy City Commercial Management (Beijing) Co., Ltd. (a wholly-owned subsidiary of the Company) on 21 December 2017, pursuant to which COFCO Finance Company Limited will provide depository services and entrustment loan services to the Group for a term of three years commencing on 1 January 2018 and ending on 31 December 2020;

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APPENDIX II	GENERAL INFORMATION

1. the framework agreement entered into between Joy City Commercial Management (Beijing) Company Limited (a wholly-owned subsidiary of the Company) and Tianjin Chang He Capital Investment Fund Management Company Limited (an independent third party of the Company) on 1 August 2018, in relation to the formation of the funds to search for opportunities to acquire prospective projects involving a total investment by the Group of not more than RMB2,500,000,000;
2. the framework agreement entered into between the Company, Spring Wisdom Limited (a wholly-owned subsidiary of the Company), Gain Success Limited (a wholly-owned subsidiary of the Company), Shanghai Gaoxing Property Limited (a wholly-owned subsidiary of the Company), Grand Favour Limited (a wholly- owned subsidiary of the Company), Bright Motion Limited (a wholly-owned subsidiary of the Company) and Garbo Commercial Property Fund L.P. (a limited partnership which the Group holds approximately 36.36% of the limited partnership interests) on 30 August 2019 in relation to (i) the transfer of the entire issued share capital in Spring Wisdom Limited by the Company to Grand Favour Limited and in consideration, Grand Favour Limited shall issue one share of US$1 to the Company; (ii) Grand Favour Limited shall transfer the entire issued share capital in Spring Wisdom Limited to Bright Motion Limited and in consideration, Bright Motion Limited shall issue one share of US$1 to Grand Favour Limited; and (iii) Bright Motion Limited shall transfer the entire issued share capital in Spring Wisdom Limited to Garbo Commercial Property Fund L.P. and in consideration, Spring Wisdom Limited will repay the due but outstanding related party's loan, accrued loan interest and certain receivables in the amount of approximately RMB1.432 billion owed to the Company and/or its related parties; and
3. the framework agreement entered into between the Company, Glorious Run Limited (a wholly-owned subsidiary of the Company), Mark Creative Limited (a wholly-owned subsidiary of the Company), Xi'an Qin Han Tang International Plaza Management Company Limited (a subsidiary of the Company), Grand Favour Limited (a wholly-owned subsidiary of the Company), Bright Motion Limited (a wholly-owned subsidiary of the Company) and Garbo Commercial Property Fund L.P. (a limited partnership which the Group holds approximately 36.36% of the limited partnership interests) on 30 August 2019 in relation to (i) the transfer of the entire issued share capital in Glorious Run Limited by the Company to Grand Favour Limited and in consideration, Grand Favour Limited shall issue one share of US$1 to the Company as consideration; (ii) the transfer of the entire issued share capital in Glorious Run Limited by Grand Favour Limited to Bright Motion Limited and in consideration, Bright Motion Limited shall issue one share of US$1 to Grand Favour Limited; and (iii) the transfer of the entire issued share capital in Glorious Run Limited by Bright Motion Limited to Garbo Commercial Property Fund L.P. and in consideration, Mark Creative Limited and Glorious Run Limited will repay the due but outstanding related party's loan, accrued loan interest and certain receivables in the amount of approximately RMB668.6 million owed to the Company and/or its related parties.

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APPENDIX II	GENERAL INFORMATION

5. LITIGATION AND CLAIMS

At as the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Group.

6. DIRECTORS' INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates had any interest in a business which competed or might compete with the business of the Group, or had or might have any other conflicts of interest with the Group pursuant to Rule 8.10 of the Listing Rules.

7. GENERAL

The English text of this circular shall prevail over the Chinese text in case of inconsistency.

The company secretary of the Company is Ms. Ng Chi Man (ACG, ACS).

The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and its principal place of business in Hong Kong is at 33/F., COFCO Tower, 262 Gloucester Road, Causeway Bay, Hong Kong. The transfer office of the Company is Tricor Progressive Limited at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the place of business of the Company in Hong Kong unless (i) a tropic cyclone warning signal number 8 or above is hoisted, or (ii) a black rainstorm warning signal is issued, except public holidays, for a period of 14 days from the date of this circular:

1. the articles of association of the Company;
2. the letter from the Board, the text of which is set out in the section headed ''Letter from the Board'' in this circular;
3. the annual reports of the Company for the three years ended 31 December 2016, 31 December 2017 and 31 December 2018 and the interim report of the Company for the six months ended 30 June 2019;
4. a copy of each of the material contracts referred to in the paragraph headed ''Material Contracts'' in this appendix; and
5. this circular.

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