大連萬達商業地產股份有限公司 Dalian Wanda Commercial Properties Co., Ltd

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大連萬達商業地產股份有限公司 Dalian Wanda Commercial Properties Co., Ltd. (A joint stock limited liability company incorporated in the People’s Republic of China) (Stock code: 3699)

CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS UNDER (1) WANDA KIDSLAND FRAMEWORK AGREEMENT AND (2) DESIGN CONSULTANCY AND OPERATION CONSULTANCY SERVICES FRAMEWORK AGREEMENT

INTRODUCTION

Reference is made to the section headed “Connected Transactions” in the prospectus of the Company dated 10 December 2014 and the 2014 annual report of the Company published on 8 April 2015 in relation to, amongst others, continuing connected transactions of the Company under the Wanda Kidsland Framework Agreement and the Design Consultancy and Operation Consultancy Services Framework Agreement.

The Company carried out the continuing connected transactions in line with the disclosures made in the prospectus during the year of 2014. With the development of the Company’s business operation, the Group has leased additional commercial properties owned by the Group to Wanda Kidsland Group for the purpose of operating the children entertainment and playground business and commercial property management services in respect of such additional leased properties. Therefore, the original annual caps contemplated under the Wanda Kidsland Framework Agreement will be insufficient. The Board has resolved to revise the annual caps for the two years ended 31 December 2016 under the Wanda Kidsland Framework Agreement.

It is also expected that the Group will receive additional design consultancy and operation consultancy services rendered by Wanda Cultural in relation to the new projects expected to be developed in 2016. Therefore, the original annual caps contemplated under the Design Consultancy and Operation Consultancy Services Framework Agreement for the year ended 31 December 2016 will be insufficient. The Board has resolved to revise the annual cap for the year ended 31 December 2016 under the Design Consultancy and Operation Consultancy Services Framework Agreement.

1 LISTING RULES IMPLICATIONS

As at the date of this announcement, the Company is directly owned by Dalian Wanda Group as to 43.71%, which is controlled by Mr. Wang Jianlin. Dalian Wanda Group and Mr. WANG Jianlin are our Controlling Shareholders and constitute connected persons of the Company under the Listing Rules. Wanda Cultural is 100% directly owned by Dalian Wanda Group, and Wanda Kidsland is 100% indirectly owned by Mr. WANG Jianlin, therefore, Wanda Cultural and Wanda Kidsland constitute connected persons of the Company under the Listing Rules.

The transactions under the Wanda Kidsland Framework Agreement are aggregated with the same transactions under the Wanda Group Framework Agreement, Wanda Cinemas Framework Agreement, Wanda Cinemas Headquarter Lease Agreement and Wanda Department Stores Framework Agreement pursuant to Rule 14A.81 of the Listing Rules, as set out greater details in the prospectus of the Company.

As the highest applicable percentage ratio with reference to each of (i) the aggregated annual caps under the Wanda Kidsland Framework Agreement, Wanda Group Framework Agreement, Wanda Cinemas Framework Agreement, Wanda Cinemas Headquarter Lease Agreement and Wanda Department Stores Framework Agreement as revised according to the increased annual caps under the Wanda Kidsland Framework Agreement for the two years ended 31 December 2016, and (ii) the revised annual cap under the Design Consultancy and Operation Consultancy Services Framework Agreement for the year ended 31 December 2016, exceed 0.1% but are less than 5%, respectively, the continuing connected transactions contemplated thereunder are exempted from independent shareholders’ approval requirement under Rule 14A.76(2)(a) but are subject to the reporting, announcement and annual review requirements under Chapter 14A of the Listing Rules.

REVISION OF ANNUAL CAPS

2 It is also expected that the Group will receive additional design consultancy and operation consultancy services rendered by Wanda Cultural in relation to the new projects expected to be developed in 2016. Therefore, the original annual caps contemplated under the Design Consultancy and Operation Consultancy Services Framework Agreement for the year ended 31 December 2016 will be insufficient. The Board has resolved to revise the annual cap for the year ended 31 December 2016 under the Design Consultancy and Operation Consultancy Services Framework Agreement.

Details of the Wanda Kidsland Framework Agreement and the Design Consultancy and Operation Consultancy Services Agreement have been set out in the prospectus and the 2014 annual report of the Company, and are summarized below again for Shareholders’ easy reference.

Wanda Kidsland Framework Agreement

A summary of the key terms under the Wanda Kidsland Framework Agreement are set out below:

Date: 23 December 2014

Parties: (1) The Company; and

(2) Wanda Kidsland

Property lease and The Group shall provide leasing of commercial properties to management services: Wanda Kidsland and its Subsidiaries for the purpose of operating the children entertainment and playground business of Wanda Kidsland Group and the provision of commercial property management services by the Group in respect of such leased properties.

Price determination: The pricing terms are as follows:

• The rents (excluding property management fee) payable for the leases entered into or to be entered into under the Wanda Kidsland Framework Agreement shall be calculated based on the benchmark monthly rental price of RMB45 to RMB65 per sq.m. (GFA) and are subject to annual rental adjustment having regard to the then prevailing market rate. The monthly rental benchmark price was determined at arm’s length, by reference to prevailing market rates and no less than the rental rates we offered to independent third parties and on normal commercial terms.

• The property management fee payable for the leases entered into or to be entered into under the Wanda Kidsland Framework Agreement shall be calculated based on the benchmark monthly property management fee of RMB5 to RMB10 per sq.m. (GFA). The monthly property management benchmark prices were determined at arm’s length, by reference to prevailing market rates and the rates we offered to independent third parties and on normal commercial terms.

3 Term of the agreement: The Wanda Kidsland Framework Agreement has been entered into on 23 December 2014 for a term of 3 years.

Design Consultancy and Operation Consultancy Services Framework Agreement

A summary of the key terms under the Design Consultancy and Operation Consultancy Services Framework Agreement are as follows:

Date: 23 December 2014

Parties: (1) Wanda Cultural; and

(2) the Company

Provision of services: Wanda Cultural shall provide the design consultancy and operation consultancy services, including, but not limited to (i) engaging third party design company, review and modification of, and supervising the implementation of, relevant design plan for the projects during the construction phase; and (ii) overall services relating to the preparation for opening during the period from the completion of construction to commencing operation, such as materials procurement, recruitment, building up management team and the design of opening plan in connection with businesses of Wanda City

Price determination: The pricing terms of the Design Consultancy and Operation Consultancy Services Framework Agreement are as follows:

• The Company will pay reasonable fees for the design consultancy and operation consultancy services provided to the Company by the Wanda Cultural Group calculated based on an actual costs incurred basis plus a prevailing market margin.

• The fee basis for the design and consultancy services rendered under the Design Consultancy and Operation Consultancy Services Framework Agreement was determined taking into consideration the expected quality and comprehensive management services to be rendered by Wanda Cultural Group, the initial investment made by Wanda Cultural Group, and by reference to the market price in respect of design consultancy services at the relevant time or as agreed by parties after arm’s-length negotiations.

Term of the agreement: The Design Consultancy and Operation Consultancy Services Framework Agreement has been entered into on 23 December 2014 for a term of 3 years.

4 Historical Figures and Existing Annual Caps

Set out below are the existing annual caps for the three years ended 31 December 2016, and the actual transaction value for the year of 2014 and nine months ended 30 September 2015 under (1) the Wanda Kidsland Framework Agreement and (2) the Design Consultancy and Operation Consultancy Services Framework Agreement:

Historical Figures and Existing Annual Caps (RMB million) Actual transaction Actual value for the Annual transaction nine months Annual Annual cap for the value for the ended 30 cap for the cap for the Connected Transaction year 2014 year 2014 September 2015 year 2015 year 2016

Wanda Kidsland Framework Lease of 3.00 2.73 19.71 15.80 29.60 Agreement (Note 1&2) commercial properties

Property 0.30 0.30 5.59 1.60 3.30 management services

Design Consultancy Provision of design 600 422.17 326.23 700 700 and Operation consultancy and Consultancy Services operation consultancy Framework Agreement services (Note 3)

Note 1: There was no historical transaction under the Wanda Kidsland Framework Agreement for the two years ended 31 December 2013.

Note 2: In the process of the review and assessment of the continuing connected transactions for the year 2015 conducted by the Company in December 2015, the Company noticed that the actual transaction value as of 30 September 2015 under the Wanda Kidsland Framework Agreement exceeded the annual cap for the year 2015. This is primarily due to the increasing demand from Wanda Kidsland as a result of its quick expansion. The Group paid greater attention to the aggregated annual caps for property leasing and management services with Wanda Group for the year 2015, which will not reach the annual cap previously disclosed. The Company inadvertently paid less attention to the caps under each separate framework agreements for property leasing and management services. Please refer to the sections headed “Board Confirmations and Remediation Measures” of this announcement for the remediation measures adopted by the Company.

Note 3: There was no historical transaction under the Design Consultancy and Operation Consultancy Services Framework Agreement for the two years ended 31 December 2012, the historical transaction value thereof was RMB180.65 million for the year ended 31 December 2013.

5 Revision of Annual Caps

Due to the strategic planning of Wanda Kidsland to increase its market share and scale of expansion, the Group has leased additional commercial properties to Wanda Kidsland Group for the purpose of operating its children entertainment and playground business. Therefore, the original annual caps contemplated under the Wanda Kidsland Framework Agreement will be insufficient. The Board has resolved to revise the annual caps for the two years ended 31 December 2016 under the Wanda Kidsland Framework Agreement. 1

Due to the expected development of new projects, it is expected that the Group will receive additional design and operation consultancy services to be rendered by Wanda Cultural Group in the year ended 31 December 2016. Therefore, the original annual caps contemplated under the Design Consultancy and Operation Consultancy Services Framework Agreement for the year ended 31 December 2016 will be insufficient. The Board has resolved to revise the annual cap for the year ended 31 December 2016 under the Design Consultancy and Operation Consultancy Services Framework Agreement.

Details of the new For the For the annual caps are set year ended year ended out below: 31 December 31 December 2015 2016 (RMB million) (RMB million)

Wanda Kidsland Lease of Original annual caps 15.80 29.60 Framework commercial Agreement properties

Revised annual caps 43.5 180

Property Original annual caps 1.60 3.30 management services

Revised annual caps 13.0 47

For the year ended 31 December 2016 (RMB million)

Design Consultancy Provision of design Original annual cap 700 and Operation consultancy and Consultancy Services operation consultancy Framework Agreement services

Revised annual cap 950

Note 1: As a result of such revision, the aggregated caps for property leasing and management services as disclosed on page 330 of the prospectus will be adjusted accordingly. The revised aggregated caps for the property leasing and management services for the two years ended 31 December 2016 will be RMB2,848.1 million and RMB3,633.1 million, respectively.

6 Price Determination

The revised annual caps under the Wanda Kidsland Framework Agreement were arrived at based upon (i) the actual transaction value for 2014 (ii) the additional commercial properties currently expected to be leased to Wanda Kidsland Group under the Wanda Kidsland Framework Agreement and (iii) additional areas leased to Wanda Kidsland Group in the vicinity of the existing stores of Wanda Kidsland Group to support Wanda Kidsland Group’s children entertainment and playground premises expansion projects; and (iv) the expectation on the increasing trend of cooperation between our Company and Wanda Kidsland Group.

The revised annual caps under the Design Consultancy and Operation Consultancy Services Framework Agreement were arrived at based upon (i) the actual transaction value for 2014 and (ii) the projected needs of the Group to receive additional design consultancy and operation consultancy services in relation with new projects of the Company and (iii) the expected increasing cooperation with Wanda Culture.

All the terms and conditions of Wanda Kidsland Framework Agreement and the Design Consultancy and Operation Consultancy Services Framework Agreement, including the pricing policy remain unchanged.

BOARD CONFIRMATIONS AND REMEDIATION MEASURES

The Company published this announcement as soon as the Company became aware of the matter relating to the Wanda Kidsland Framework Agreement. The Company has conducted an internal investigation and will strengthen its internal control measures in relation to the monitoring of continuing connected transactions. Such strengthened internal control measures would involve closely monitoring the continuing connected transactions under each separate framework agreements on a monthly basis and routinely discussing with responsible staff at each subsidiaries with respect to existing and potential continuing connected transactions. In addition, with a view to enhancing the knowledge and understanding of the Listing Rules, the Company will arrange additional training to be provided by the Company’s external counsel for the relevant staff of the Group to ensure that the management will be promptly informed of circumstances potentially involving any connected transactions of the Company.

The Company undertakes that it will endeavor to monitor the transactions under Wanda Kidsland Framework Agreement and Design Consultancy and Operation Consultancy Services Framework Agreement as well as other continuing connected transactions against the relevant annual caps in the future to ensure that necessary measures and appropriate actions for the compliance with applicable requirements under the Listing Rules will be promptly taken.

7 The Directors (including the independent non-executive Directors) are of the view that insofar as (i) the leasing of commercial properties and the property management services to be provided by the Company to Wanda Kidsland Group, and (ii) the design consultancy and operation consultancy services to be provided by Wanda Cultural Group are concerned, the original annual caps under the Wanda Kidsland Framework Agreement and the Design Consultancy and Operation Consultancy Services Framework Agreement as previously disclosed should be increased to cater for the additional commercial properties to be leased by the Group to Wanda Kidsland Group and the additional operational needs of the Group.

The Directors (including the independent non-executive Directors) consider that (i) the Wanda Kidsland Framework Agreement and the revised annual caps thereunder, (ii) the Design Consultancy and Operational Consultancy Services Framework Agreement and the revised annual caps thereunder, are in the ordinary and usual course of business of the Company, on normal commercial terms, fair and reasonable and in the interest of the Company and its Shareholders as a whole.

As each of Mr. DING Benxi, Mr. QI Jie, Mr. ZHANG Lin, Mr. QU Dejun, Mr. WANG Guiya and Mr. YIN Hai may be considered to have a conflict of interest in the transactions under the Wanda Kidsland Framework Agreement and the Design Consultancy and Operational Consultancy Services Framework Agreement due to their positions as directors or members of management in Dalian Wanda Group or its subsidiaries, they have abstained from voting on the resolutions in relation to the transactions.

GENERAL Information

The Company is the largest owner and operator of shopping centers in the PRC, the largest developer and seller of commercial properties in the PRC and the largest owner and operator of luxury hotels in the PRC. The business of the Group comprises three segments, namely investment property development and operations, property development and sales and hotel business.

Wanda Kidsland is 100% indirectly owned by Mr. WANG Jianlin. The principal business of Wanda Kidsland is children’s entertainment business in the PRC.

Wanda Cultural is 100% directly owned by Dalian Wanda Group. The principal business of Wanda Cultural is organizing cultural and art communication activities, investment in cultural industry related projects, investment and project management, and providing management, investment and trading consultancy services to enterprises.

IMPLICATIONS UNDER THE LISTING RULES

8 The transactions under the Wanda Kidsland Framework Agreement are aggregated with the transactions under the Wanda Group Framework Agreement, Wanda Cinemas Framework Agreement, Wanda Cinemas Headquarter Lease Agreement and Wanda Department Stores Framework Agreement pursuant to Rule 14A.81 of the Listing Rules.

DEFINITIONS

“Board” the board of Directors

“Company” Dalian Wanda Commercial Properties Co., Ltd. (Stock Code: 3699), a joint stock company with limited liability incorporated in the PRC on 10 December 2009

“connected person(s)” shall have the meaning ascribed to it under the Listing Rules

“continuing connected shall have the meaning ascribed to it under the Listing Rules transactions”

“Controlling Shareholder” shall have the meaning ascribed to is under the Listing Rules

“Dalian Hexing” Dalian Hexing Investment Co., Ltd. (大連合興投資有限公司), a company incorporated in the PRC with limited liability on 27 April 2007 which is directly owned as to 98% by Mr. WANG Jianlin and as to 2% by Mr. WANG Sicong, Mr. WANG Jianlin’s son, and a Controlling Shareholder of the Company

“Dalian Wanda Group” Dalian Wanda Group Co., Ltd. (大連萬達集團股份有限公司), a joint stock company incorporated in the PRC with limited liability on 28 September 1992, which is owned as to 99.76% through Dalian Hexing and directly owned as to 0.24% by Mr. WANG Jianlin, and a Controlling Shareholder of the Company, holding a 43.71% equity interest in the Company

9 “Design Consultancy and the design consultancy and operation consultancy services Operation Consultancy framework agreement entered into between the Company and Services Framework Wanda Cultural Group for a term of 3 years on December Agreement” 23, 2014 (as amended from time to time), with respect to the provision of the design consultancy and operation consultancy services, including, but not limited to (i) engaging third party design company, review and modification of, and supervising the implementation of, relevant design plan for the projects during the construction phase; and (ii) overall services relating to the preparation for opening during the period from the completion of construction to commencing operation, such as materials procurement, recruitment, building up management team and the design of opening plan in connection with businesses of Wanda City

“Directors” directors of the Company

“Domestic Shares” ordinary shares issued by the Company in the PRC, with a nominal value of RMB1.00 each, which are subscribed for and paid for in RMB

“GFA” the GFA of a building comprise the area contained within the external walls of the building measured at each floor level (including any floor below ground level and the thickness of the external walls of the building). For both above-ground areas and underground areas, the GFA generally include mechanical and electrical service rooms, refuse rooms, water tanks and car-parking floors.

“Group” the Company and its Subsidiaries

“H Shares” overseas listed foreign shares in the ordinary share capital of the Company, with a nominated value of RMB1.00 each, which are listed on the Main Board of the Stock Exchange

“Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

“PRC” the People’s Republic of China

“RMB” Renminbi, the lawful currency of the PRC

“Shares” share(s) in the share capital of our Company, with a nominal value of RMB1.00 each, comprising our Domestic Shares and our H Shares

“Shareholder(s)” holder(s) of the Shares

10 “Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subsidiaries” shall have the meaning ascribed to it under the Listing Rules

“Wanda Cinema” Wanda Cinema Line Co., Ltd. (萬達電影院線股份有限公司), a company established under the laws of the PRC as a joint stock company on 20 January 2005 and a direct 60.71%-owned subsidiary of Dalian Wanda Group, and a connected person of the Company

“Wanda Cinemas the property lease and management services framework agreement Framework Agreement” for a term of 20 years between the Company and Wanda Cinema on July 1, 2012, with respect to leasing of commercial properties owned by us to Wanda Cinemas Group for the purpose of operating its cinemas business and the provision of commercial property management services by us in respect of such leased properties

“Wanda Cinemas the property lease and management services agreement between Headquarter Lease the Company and Wanda Cinema with respect to the lease of Agreement” commercial properties for use as headquarter offices and provision of property management services, entered into in November 2011, supplemented by a supplemental agreement on 27 July 2012

“Wanda Cultural” Beijing Wanda Cultural Industry Group Co., Ltd. (北京萬達文化產業集團有限公司), a company established under the laws of the PRC with limited liability on 19 September 2012 and which is directly wholly-owned by Dalian Wanda Group, and is the connected person

“Wanda Cultural Group” Wanda Cultural and its Subsidiaries

“Wanda Department Store” Wanda Department Store Co., Ltd. (萬達百貨有限公司), a company established under the laws of the PRC with limited liability on 17 April 2007 and is indirectly wholly-owned by Mr. WANG Jianlin, and a connected person of the Company

“Wanda Department Wanda Department Store and its Subsidiaries Store Group”

“Wanda Department the property lease and management service framework agreement Stores Framework between the Company and Wanda Department Store dated 23 Agreement” December 2014, with respect to leasing of commercial properties owned by the Company to Wanda Department Store Group for the purpose of (i) operating the department store and retail business owned by Mr. WANG Jianlin, (ii) for use as headquarter offices and (iii) the provision of commercial property management services by us in respect of such leased properties

11 “Wanda Group the property lease and management services framework agreement Framework Agreement” with Dalian Wanda Group for (for itself and on behalf of its subsidiaries) dated 23 December 2014, with respect to (i) the leasing of commercial properties owned by us to Dalian Wanda Group and its subsidiaries (excluding Wanda Cinemas Group) for use as headquarter offices, (ii) the leasing of commercial properties owned by us to Beijing Dagexing Group for operating Wanda Cultural’s karaoke entertainment business under the name of ““大歌星” 量販式KTV”, and (iii) the provision of commercial property management services by us in respect of such leased properties

“Wanda Kidsland” Wanda Kidsland Co. Limited (萬達兒童娛樂有限公司), a company established under the laws of the PRC with limited liability, which is indirectly wholly-owned by Mr. WANG Jianlin, and a connected person

“Wanda Kidsland the property lease and management services framework agreement Framework Agreement” entered into between the Company and Wanda Kidsland Group for a term of 3 years on 23 December 2014 (as amended from time to time), with respect to leasing of commercial properties owned by the Company to Wanda Kidsland Group for the purpose of operating the children entertainment and playground business of Wanda Kidsland Group and the provision of commercial property management services by the Company in respect of such leased properties

“Wanda Kidsland Group” Wanda Kidsland and its Subsidiaries

“%” per cent.

By Order of the Board Dalian Wanda Commercial Properties Co., Ltd. DING Benxi Chairman

Beijing, PRC 30 December 2015

As at the date of this announcement, our executive Directors are Mr. DING Benxi and Mr. QI Jie; our non-executive Directors are Mr. ZHANG Lin, Mr. QU Dejun, Mr. WANG Guiya and Mr. YIN Hai; and our independent non-executive Directors are Mr. LIU Jipeng, Dr. XUE Yunkui and Dr. HU, Fred Zuliu.