Hengli Commercial Properties : Announcements and Notices - Supplemental Announcement Continuing Connected Transactions Tenancy Agreements

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萬 達 酒 店 發 展 有 限 公 司 WANDA HOTEL DEVELOPMENT COMPANY LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 169) SUPPLEMENTAL ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS TENANCY AGREEMENTS

Reference is made to the announcement (the "Announcement") of Wanda Hotel Development Company Limited (the "Company") dated 27 September 2016 in relation to three tenancy agreements (the "Tenancy Agreements") entered into by Guilin Gaoxin Wanda Shopping Plaza Co., Ltd. (桂林高新萬達廣場有限公司) (an indirect non-wholly owned subsidiary of the Company) (the "Guilin Project Company"), as landlord, on 8 June 2015, 28 July 2015 and 8 September 2015.

Unless otherwise defined, capitalized terms used in this announcement shall have the same meanings as defined in the Announcement.

The Board would like to clarify and provide further information on the Tenancy Agreements as follows:

2015 ANNUAL CAPS OF THE KIDSLAND TENANCY AGREEMENT AND THE CINEMA TENANCY AGREEMENT

Applying the same basis for determining the annual caps of the Kidsland Tenancy Agreement and the Cinema Tenancy Agreement for the year ending 31 December 2016 and onwards as stated in the Announcement, the annual caps of the Kidsland Tenancy Agreement and the Cinema Tenancy Agreement for the year ended 31 December 2015 would have been RMB442,000 and RMB705,000 respectively. As disclosed in the Announcement, the amount of rent received by the Guilin Project Company under the Kidsland Tenancy Agreement and the Cinema Tenancy Agreement for the year ended 31 December 2015 amounted to approximately RMB420,000 and RMB617,000 respectively, which were below the aforementioned annual caps for the year ended 31 December 2015.

ANNUAL CAPS OF THE DEPARTMENT STORE TENANCY AGREEMENT

The Department Store Tenancy Agreement was for a term of 10 years commencing from 12 September 2015 to 11 September 2025. As disclosed in the Announcement, the Department Store Tenancy Agreement was subsequently terminated on 30 June 2016 by mutual consent due to the strategic store network optimization initiative of Wanda Department Store which involved the closure of the store at the premises under the Department Store Tenancy Agreement and certain other stores operated by Wanda Department Store.

Based on the monthly rent payable to the Guilin Project Company pursuant to the Department Store Tenancy Agreement with a certain margin of buffer for the sake of prudence, it is estimated that the annual caps of the total amounts receivable the Guilin Project Company from Wanda Department Store under the Department Store Tenancy Agreement would have been set at the following amounts (as if the annual caps were determined at the time of signing of the Department Store Tenancy Agreement):

Year ended/ending 31 December 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Annual cap

(RMB'000) 1,663 5,492 8,319 10,390 10,701 11,022 11,353 11,694 12,044 12,406 8,829

As the highest percentage ratio (as defined under the Listing Rules) (other than the profits ratio) in respect of the above annual caps of the Department Store Tenancy Agreement exceeded 5%, the transactions contemplated thereunder were subject to the reporting, announcement, independent shareholders' approval and annual review requirements under Chapter 14A of the Listing Rules. Solely due to an inadvertent oversight, the Company failed to comply with such requirements before the Department Store Tenancy Agreement was terminated. Since the Department Store Tenancy Agreement was terminated on 30 June 2016, no general meeting will be convened by the Company to seek independent shareholders' approval for the transactions thereunder retrospectively.

STRENGTHENING INTERNAL CONTROL MEASURES

As disclosed in the Announcement, the Group has taken steps to strengthen its internal control measures in relation to the monitoring of connected transactions to ensure compliance with applicable requirements under the Listing Rules.

In this regard, the Group has sought external legal advice on the relevant requirements under the Listing Rules and has reviewed the internal communication and reporting system and practice with the relevant departments and staff, particularly over the reporting of potential connected transactions. The Company has designated certain members of the management to closely monitor subsisting and potential connected transactions of the Group on a regular basis. The Group will modify the existing procedures in monitoring connected transactions to require periodical circulation of a list of connected persons of the Group setting out their relationship with the Group and details of any subsisting connected transactions with such connected persons (including annual caps) with a view to ensure, inter alia, that (i) any proposed potential connected transactions will be identified and reported to the management members of the Group for assessment on any applicable Listing Rules compliance implications and such proposed transactions will only be entered into after obtaining the clearance from management members; and (ii) the transaction amounts of all existing continuing connected transactions will not exceed the relevant annual caps without re-complying with the applicable Listing Rules requirements. The Group also plans to arrange regular training sessions for the relevant management members and staff of the Group to enhance their understanding and awareness of the compliance requirements regarding connected transactions.

The Company will endeavor to ensure that all necessary measures and appropriate actions for the full compliance with applicable requirements under the Listing Rules will be promptly taken.

By order of the Board

Wanda Hotel Development Company Limited Ding Benxi

Chairman

Hong Kong, 12 October 2016

As at the date of this announcement, Mr. Ding Benxi (Chairman), Mr. Qi Jie and Mr. Qu Dejun are the non-executive Directors; Mr. Liu Chaohui is the executive Director; and Mr. Liu Jipeng, Dr. Xue Yunkui and Mr. Zhang Huaqiao are the independent non-executive Directors.