The Board of Shui On Land Limited announced that on 20 April 2023, Shanghai Ruilou Enterprise Management Co. Ltd. (being an indirect wholly-owned subsidiary of the Company) entered into the Shareholders' Agreement with, among others, Shanghai Pucheng Investment Development Co. Ltd., for the joint venture arrangement in relation to the JV Company.

Where the JV Company is expected to carry out the property redevelopment project at the Land in Pujiang Town, Minhang District, Shanghai, the PRC (i.e., the Zhaojia Lou Project). Purpose and principal business of the JV Company: The formation of the JV Company is for the single purpose of carrying out the Zhaojia Lou Project. The principal business of the JV Company covers, among other things, real estate development and operations, implementation of construction works, construction designs, and property management.

Registered capital and capital commitment: The registered capital of the JV Company is RMB 2,700 million (equivalent to approximately HKD 3,083 million) which will be contributed by Shanghai Ruilou and Shanghai Pucheng as to RMB 2,430 million (equivalent to approximately HKD 2,775 million) and RMB 270 million (equivalent to approximately HKD 308 million) respectively before 31 December 2027. The total capital commitment to be contributed by the JV Partners to the JV Company (the "Capital Commitment") is approximately RMB 5,167 million (equivalent to approximately HKD 5,900 million) and shall be contributed by the JV Partners on a pro-rata basis. The respective contribution to the Capital Commitment of the JV Company by the JV Partners is determined after arm's length negotiation between the parties with reference to the funding needs of the JV Company required for the carrying out of the Zhaojia Lou Project and the operation of the JV Company.

The amount of approximately RMB 4,650 million (equivalent to approximately HKD 5,310 million) to be contributed by Shanghai Ruilou shall be funded by the Group's internal working capital and external financing (if appropriate). The JV Company is owned as to 90% and 10% by Shanghai Ruilou and Shanghai Pucheng respectively and is a non-wholly owned subsidiary of the Company. Future funding: The further financing needs of the JV Company beyond the registered capital shall be funded by bank loans and other external financings.

In the event that the above external financing is not sufficient to meet the needs of the JV Company, the JV Partners may agree, pursuant to the Shareholders' Agreement, that (a) the registered capital of the JV Company will be increased and the JV Partners will contribute additional registered capital of the JV Company; or (b) the JV Partners will advance shareholders' loans to the JV Company. Management: The board of directors of the JV Company shall comprise five directors, four of whom shall be nominated by Shanghai Ruilou and one of whom shall be nominated by Shanghai Pucheng. The chairman of the JV Company's board of directors shall be nominated by Shanghai Ruilou.

The JV Company may not, without the unanimous consent of both of the JV Partners, decide and conduct various major decisions and actions typical of its kind, which shall include: (a) changing the registered capital of the JV Company; (b) changing the articles of association of the JV Company; (c) changing the nature or scope of the business of the JV Company, and if there are changes then they must still be consistent with the scope or purpose specified in the documents in respect of the future tender of the Land; and (d) entering into any transactions which are not on an arm's length basis. Profit sharing: The JV Company shall not make any distribution to the JV Partners until the JV Company has made up for the losses incurred during the previous financial years and provided for the statutory surplus reserve. The distributable profits of the JV Company shall be distributed to the JV Partners in proportion to their respective equity interests in the JV Company.

Termination: The Shareholders' Agreement shall be terminated in the event that (a) the Zhaojia Lou Project is terminated; (b) the JV Company becomes wholly owned by a JV Partner; (c) the JV Partners agree to such termination; (d) the JV Company is merged with another entity, acquired or dissolved; or (e) the JV Company is declared insolvent. Upon termination of the Shareholders' Agreement, the JV Company shall be wound up and its assets shall be realised and distributed to the JV Partners in accordance with the applicable laws.