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 Hong Kong with limited liability) (Stock Code: 81) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS PROPERTY LEASE AGREEMENTS Reference is made to the announcement dated 2 August 2011 in connection with the Property Lease Agreements entered into between the Landlord, a subsidiary of the Company, and subsidiaries of COLI. The Property Lease Agreements have expired on 31 July 2014. To renew the agreements, on 1 August 2014, the Landlord has entered into the New Property Lease Agreements with the Tenants respectively for a term of three years commencing from 1 August 2014 and ending on 31 July 2017. As COLI is a controlling shareholder of the Company holding approximately 37.98% of the number of Shares in issue as at the date of this announcement, COLI and its subsidiaries are connected persons of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering into the New Property Lease Agreements constitutes continuing connected transactions of the Company. Since the Cap of the Continuing Connected Transactions for each of the 12-month period between 1 August 2014 and 31 July 2017, namely RMB14.005 million (approximately HK$17.646 million), falls below 5% of the applicable percentage ratios according to the Listing Rules, the Continuing Connected Transactions are only subject to reporting, announcement and annual review requirements but exempt from the independent Shareholders’ approval. Details of the New Property Lease Agreements will be included in the next published annual report and accounts of the Company pursuant to Rule 14A.71 of the Listing Rules. The Directors (including the independent non-executive Directors) are of the view that as far as the Shareholders of the Company are concerned, the New Property Lease Agreements are entered into in the ordinary course of the Company’s business, on normal commercial terms, fair and reasonable and in the best interests of the Company and its Shareholders as a whole. BACKGROUND Reference is made to the announcement dated 2 August 2011 in connection with the Property Lease Agreements entered into between the Landlord and subsidiaries of COLI. -1- RENEWAL OF CONTINUING CONNECTED TRANSACTIONS The Property Lease Agreements have expired on 31 July 2014. To renew the agreements, on 1 August 2014, the Landlord, a subsidiary of the Company, has entered into the New Property Lease Agreements with the Tenants respectively for a term of three years commencing from 1 August 2014 and ending on 31 July 2017. The principal terms of the agreements are set out below: (1) New Property Lease Agreement for 22nd Floor, China Overseas International Center: Date: 1 August 2014 Lessor: The Landlord Lessee: Beijing Zhonghai King Stone Real Estate Development Co., Ltd., a COLI subsidiary Terms: Address of premises 22nd Floor, China Overseas International Center, No.28 Pinganlixi Avenue, Xicheng District, Beijing Area of premises 2,355.22 square metres Use Annual Rent Lease Term Office RMB9.327 million (equivalent to approximately HK$11.752 million) or RMB777,223 (equivalent to HK$979,301) per month. The rent is payable quarterly. 1 August 2014 to 31 July 2017 (2) New Property Lease Agreement for units 01, 02, 03 & 09 of the 23rd Floor, China Overseas International Center: Date: 1 August 2014 Lessor: The Landlord Lessee: Beijing Jia Yi De Real Estate Development Co., Ltd., a COLI subsidiary Terms: Address of premises Units 01, 02, 03 & 09, 23rd Floor, China Overseas International Center, No.28 Pinganlixi Avenue, Xicheng District, Beijing Area of premises 1,181.2 square metres Use Annual Rent Lease Term Office RMB4.678 million (equivalent to approximately HK$5.894 million) or RMB389,796 (equivalent to approximately HK$491,143) per month. The rent is payable quarterly. 1 August 2014 to 31 July 2017 -2- REASONS FOR ENTERING INTO THE NEW PROPERTY LEASE AGREEMENTS The Group is principally engaged in real estate development and investment in the PRC. China Overseas International Center is held by the Landlord as an investment property for rental income purpose. The lease out of the Premises to the Tenants will increase the rental income of the Landlord and provide steady sources of revenues to the Group. The terms of the New Property Lease Agreements have been negotiated on an arm’s length basis betweens the Landlord and the Tenants and on normal commercial terms. The rental of the Premises has been arrived at by the reference to (1) the area and location of the Premises; (2) the prevailing rental payable by the tenants in respect of other spaces of China Overseas International Center and (3) the prevailing market conditions. ESTIMATED CAP Annual Cap for the New Property Lease Agreements is RMB14.005 million (approximately HK$17.646 million), being the total rent payable under the New Property Lease Agreements for each of the 12-month period between 1 August 2014 and 31 July 2017. The Cap was determined by reference to the total rent stated in the New Property Lease Agreements and the historical amounts of rental (being RMB12,477,000) paid pursuant to the Property Lease Agreements for each of the 12month period between 1 August 2011 and 31 July 2014. The Directors (including the independent non-executive Directors) of the Company are of the view that the Cap for the New Property Lease Agreements is fair and reasonable. COMPLIANCE WITH THE LISTING RULES COLI is principally engaged in property development and investment in the PRC. The Tenants are subsidiaries of COLI and their principal activities are property developments in the PRC. As COLI is a controlling shareholder of the Company holding approximately 37.98% of the number of Shares in issue as at the date of this announcement, COLI and its subsidiaries are connected persons of the Company under Chapter 14A of the Listing Rules. Accordingly, the entering into the New Property Lease Agreements constitutes continuing connected transactions of the Company. Since the Cap of the Continuing Connected Transactions for each of the 12-month period between 1 August 2014 and 31 July 2017, namely RMB14.005 million (approximately HK$17.646 million), falls below 5% of the applicable percentage ratios according to the Listing Rules, the Continuing Connected Transactions are only subject to the reporting, announcement and annual review requirements but exempt from the independent Shareholders’ approval. Details of the New Property Lease Agreements will be included in the next published annual report and accounts of the Company pursuant to Rule 14A.71 of the Listing Rules. The Directors (including the independent non-executive Directors) are of the view that as far as the Shareholders of the Company are concerned, the New Property Lease Agreements are entered into in the ordinary and usual course of the Company’s business, on normal commercial terms, fair and reasonable and in the best interests of the Company and the Shareholders as a whole. Further, none of the Directors has a material interest in the New Property Lease Agreements. However, Mr. Hao Jian Min and Mr. Chen Bin, who presented at the Board meeting approving the New Property Lease Agreements, had abstained from voting on the relevant Board resolution. -3- DEFINITIONS In this announcement, the following expressions shall have the meanings set out below unless the context requires otherwise: “associate(s)”, “connected person(s)”, “controlling shareholder”, “percentage ratios”, “subsidiary(ies)” each has the meaning ascribed to it in the Listing Rules; “Board” the board of Directors of the Company; “Cap” the maximum rent payable under the New Property Lease Agreements as described under the section headed “Estimated Cap” in this announcement; “COLI” China Overseas Land & Investment Limited, a company incorporated in Hong Kong with limited liability and whose shares are listed on the Main Board of the Stock Exchange (stock code: 688), being a controlling shareholder of the Company; “Company” China Overseas Grand Oceans Group Ltd., a company incorporated in Hong Kong with limited liability and whose shares are listed on the Main Board of the Stock Exchange (stock code: 81); “Continuing Connected Transactions” the transactions as described under the section headed “Renewal of Continuing Connected Transactions” in this announcement; “Directors” the directors of the Company; “Group” the Company and its subsidiaries from time to time; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; “Landlord” 北京中京藝苑房地產開發有限責任公司(Beijing Zhong Jing Yi Yuen Real Estate Development Company Limited*),a limited liability company incorporated in PRC, a subsidiary of the Company; “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange; “New Property Lease Agreements” the property lease agreements dated 1 August 2014 entered into between the Landlord and the Tenants respectively in respect of the Premises; “PRC” the People’s Republic of China, which for the purpose of this announcement excludes Hong Kong, Macau and Taiwan; -4- “Premises” Premises on 22nd Floor and Units 01, 02, 03 & 09 of the 23rd Floor, China Overseas International Center, No. 28 Pinganlixi Avenue, Xicheng District, Beijing; “Property Lease Agreements” the property lease agreements dated 2 August 2011 entered into between the Landlord and the Tenants respectively in respect of the Premises; “RMB” Renminbi, the lawful currency of the PRC; “Share(s)” the ordinary share(s) of the Company; “Shareholder(s)” the shareholder(s) of the Company from time to time; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Tenants” 北京中海金石房地產閞發有限公司(Beijing Zhonghai King Stone Real Estate Development Co., Ltd.*) and 北京嘉益德房地產開發有限公司(Beijing Jia Yi De Real Estate Development Co., Ltd.*), both of which are subsidiaries of COLI; and “%” per cent. * English or Chinese translation, as the case may be, is for identification only. This announcement contains translation between Renminbi and Hong Kong dollars at RMB1 to HK$1.26. The translation shall not be taken as representation that the Renminbi could actually be converted into Hong Kong dollars at that rate, or at all. For and on behalf of CHINA OVERSEAS GRAND OCEANS GROUP LIMITED Hao Jian Min Chairman and Non-Executive Director Hong Kong, 1 August 2014 As at the date of this announcement, the Board comprises nine Directors, of which four are executive Directors, namely, Mr. Chen Bin, Mr. Xiang Hong, Mr. Paul Wang Man Kwan and Mr. Yang Hai Song; two non-executive Directors, namely Mr. Hao Jian Min and Mr. Billy Yung Kwok Kee, and three independent non-executive Directors, namely Dr. Timpson Chung Shui Ming, Mr. Jeffrey Lam Kin Fung and Mr. Dantes Lo Yiu Ching. -5-