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: 86)

CONTINUING CONNECTED TRANSACTIONS MASTER LEASE AGREEMENT The Board announces that on 14 February 2014, the Company as lessee, entered into the Master Agreement with Art View as lessor, whereby any member of the Group may continue, amend or renew the Existing Leases or enter into new leases, sub-leases and licenses in relation to the Property with Art View as the lessor from time to time during the period commenced from 1 January 2014 and ending on 31 December 2015 subject to the Annual Caps. In addition, on 14 February 2014, UAF has entered into the Sub-tenancy Agreement with AGL, pursuant to which AGL sub-leased a portion of 24/F., Allied Kajima Building to UAF. Such portion forms part of the leasing arrangement between AGL and Art View in respect of 24/F., Allied Kajima Building as contemplated under the Head Tenancy Agreement. LISTING RULES IMPLICATIONS The Company is a subsidiary of APL which, in turn, owns 50% indirect shareholding interest in Art View. Accordingly, Art View is a connected person of the Company within the meaning of the Listing Rules, and the transactions contemplated under the Master Lease Agreement constitute continuing connected transactions of the Company under the Listing Rules. UAF is a non wholly-owned subsidiary of the Company that is held as to approximately 56.16% by APL, which in turn is held as to approximately 74.99% by AGL. Given that AGL is an associate of APL (which is a substantial shareholder of the Company), AGL is regarded as a connected person of the Company under the Listing Rules.

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The transaction contemplated under the Sub-tenancy Agreement constitutes a continuing connected transaction of the Company and, on a stand-alone basis, is exempted from the reporting, announcement and independent shareholders’ approval requirements. Under Rule 14A.25 of the Listing Rules, the transaction contemplated under the Sub-tenancy Agreement is aggregated with the transaction contemplated under the Master Lease Agreement. Since the applicable percentage ratios of the Listing Rules calculated with reference to the aggregated annual caps for the Master Lease Agreement and the Sub-tenancy Agreement are more than 0.1% but less than 5%, the transactions contemplated under the Master Lease Agreement and the Sub-tenancy Agreement are subject to the announcement, reporting and annual review requirements but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules. Details of the Master Lease Agreement and the Sub-tenancy Agreement and the transactions contemplated thereunder will be included in the Company’s next published annual report and accounts in accordance with Rules 14A.45 and 14A.46 of the Listing Rules. INTRODUCTION The Board announces that the Company as lessee, entered into the Master Lease Agreement with Art View as lessor, whereby any member of the Group may continue, amend or renew the Existing Leases or enter into new leases, sub-leases and licenses in relation to the Property with Art View as the lessor from time to time as are necessary for the future business needs of the Group. THE MASTER LEASE AGREEMENT Date

:

14 February 2014

Parties :

(1) The Company (2) Art View

Term

Two years from 1 January 2014 to 31 December 2015

:

Subject: The Master Lease Agreement sets out a framework of the terms on which any member of the Group may continue, amend or renew the Existing Leases or enter into new leases sub-leases and licenses in relation to the Property from time to time with Art View as the lessor i.e. the Leases.

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Major terms of the Leases: (a) The terms of all Leases shall be negotiated on an arm’s length basis and shall be fair and reasonable. (b) All the terms of the Existing Leases in effect at the effective date of the Master Lease Agreement shall remain in full force and effect notwithstanding the Master Lease Agreement, and any renewal or amendment of the terms of the Existing Leases shall comply with the terms of the Master Lease Agreement. (c) The rent and management fees and charges payable by the member(s) of the Group to Art View under each Lease will be determined between Art View and the relevant member(s) of the Group with reference to the prevailing market conditions and the rental level of similar properties in the vicinity of the Property. (d) The terms of the Leases (including options to renew the relevant lease, sub-lease or licence, if any) shall expire on or before the expiry date of the Master Lease Agreement. (e) On the basis of the currently agreed rent and management fees and charges payable to Art View under each Lease, the aggregate annual rent and management fees and charges payable by the Group to Art View under all the Leases shall be within the limit of the Annual Caps. (f)

In the event that the aggregate annual rent and management fees and charges under all the Leases exceed the Annual Caps, Art View and the Company shall enter into a supplemental agreement to the Master Lease Agreement for the purpose of amending the terms and conditions therein in particular the Annual Caps and Art View agrees to provide assistance to the Company in complying with the applicable requirements under the Listing Rules.

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Existing Leases: Details of the Existing Leases are set out below:

Premises

Monthly Rental (HK$)

Monthly Management Fee and Air-conditioning Charges (HK$)

Area (sq. feet)

Term

Room 801, Allied Kajima Building

2,806

25 March 2012 – 31 May 2014

84,180

17,677.80

Room 802, Allied Kajima Building

1,410

1 June 2012 – 31 May 2014

42,300

8,883.00

Room 1401-2, Allied Kajima Building

3,746

16 April 2013 – 15 April 2015

119,872

23,599.80

Room 1601-3, Allied Kajima Building

5,626

1 December 2012 – 30 November 2014

180,032

35,443.80

20/F., Allied Kajima Building

9,506

1 January 2014 – 31 December 2015

323,204

59,887.80

21/F., Allied Kajima Building

9,506

1 January 2014 – 31 December 2015

323,204

59,887.80

Annual Caps: The Annual Caps in respect of the Leases are set out below:

For the years ending 31 December 2014 2015 (HK$) (HK$)

Annual Caps for the Leases

16,090,000

21,920,000

The Annual Caps are calculated with reference to the estimated aggregated annual rent and management fees and charges payable by the Group to Art View under the Existing Leases, taking into consideration a possible increase in the area of the Property to be leased by the Group from Art View for the 24-month period commencing from 1 January 2014 to 31 December 2015.

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Sub-tenancy Agreement: In addition, on 14 February 2014, UAF has entered into the Sub-tenancy Agreement with AGL, pursuant to which AGL sub-leased a portion of 24/F. of the Property to UAF. Such portion forms part of the leasing arrangement between AGL and Art View in respect of 24/F. of the Property as contemplated under the Head Tenancy Agreement. The aggregate annual caps for the purpose of calculation of size tests under the Listing Rules are as follows:

For the years ending 31 December 2014 2015 (HK$) (HK$)

Annual Caps for the Leases

16,090,000

21,920,000

Total amount payable under 239,000   the Sub-tenancy Agreement

60,000 (for the period from 1 January 2015 until 31 March 2015)

Aggregate annual caps

16,329,000

21,980,000

REASONS FOR AND BENEFITS OF THE TRANSACTIONS Between August 2006 and December 2013, UAF and Art View entered into Expired Leases and four of the Existing Leases for the leasing of the Premises. The Group also anticipates that it will continue the Existing Leases and may renew such leases when they expire, and may further enter into new leases in respect of the Property to satisfy the future business needs of the Group from time to time. Accordingly the Company and Art View have entered into the Master Lease Agreement to set out a framework of the terms on which they may continue or renew the Existing Leases, amend the terms of the Existing Leases and enter into new leases in respect of the Property. In view of the above and that (i) compared with leasing from independent third parties, Art View and AGL have a better understanding of the Group’s requirements in terms of office premises and (ii) the amount payable pursuant to the Existing Leases and the Sub-tenancy Agreement were not above market rates, the Directors (including the Independent Non-Executive Directors) consider that the Leases contemplated under the Master Lease Agreement and the leasing arrangement under the Sub-tenancy Agreement have been entered into in the ordinary and usual course of business of the Group and the Master Lease Agreement and the Sub-tenancy Agreement (together with the Annual

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Caps) have been entered into on normal commercial terms (or better to the Group) after arm’s length negotiations between the parties, and the terms of the Leases contemplated under the Master Lease Agreement and the leasing arrangement under the Sub-tenancy Agreement (together with the Annual Caps) are fair and reasonable and in the interests of the Company and its shareholders as a whole. LISTING RULES IMPLICATIONS The Company is a subsidiary of APL which, in turn, owns 50% indirect shareholding interest in Art View. Accordingly, Art View is a connected person of the Company within the meaning of the Listing Rules, and the transactions contemplated under the Master Lease Agreement constitute continuing connected transactions of the Company under the Listing Rules. UAF is a non wholly-owned subsidiary of the Company that is held as to approximately 56.16% by APL, which in turn is held as to approximately 74.99% by AGL. Given that AGL is an associate of APL (which is a substantial shareholder of the Company), AGL is regarded as a connected person of the Company under the Listing Rules. The transaction contemplated under the Sub-tenancy Agreement constitutes a continuing connected transaction of the Company and, on a stand-alone basis, is exempted from the reporting, announcement and independent shareholders’ approval requirements. Under Rule 14A.25 of the Listing Rules, the transaction contemplated under the Sub-tenancy Agreement is aggregated with the transaction contemplated under the Master Lease Agreement. Since the applicable percentage ratios of the Listing Rules calculated with reference to the aggregated annual caps for the Master Lease Agreement and the Sub-tenancy Agreement are more than 0.1% but less than 5%, the transactions contemplated under the Master Lease Agreement and the Sub-tenancy Agreement are subject to the announcement, reporting and annual review requirements but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules. Details of the Master Lease Agreement and the Sub-tenancy Agreement and the transactions contemplated thereunder will be included in the Company’s next published annual report and accounts in accordance with Rules 14A.45 and 14A.46 of the Listing Rules. INFORMATION ABOUT THE COMPANY, ART VIEW, UAF AND AGL The Company The Company is incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board and is a non wholly-owned subsidiary of APL.

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The principal business activity of the Company is investment holding. The principal business activities of its major subsidiaries are wealth management and brokerage, capital markets, consumer finance as well as principal investments. Art View Art View is incorporated in Hong Kong with limited liability and is a joint venture of APL. The principal business activity of Art View is property investment. UAF UAF is a company incorporated in Hong Kong with limited liability and a non whollyowned subsidiary of the Company. The principal business activity of UAF is money lending. AGL AGL is a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board. The principal business activity of AGL is investment holding. The principal business activities of AGL’s major subsidiaries are property investment and development, hospitality related activities, the provision of financial services and investments in listed and unlisted securities. Mr. Lee Seng Huang (Executive Director and Group Executive Chairman) is one of the trustees of Lee and Lee Trust, being a discretionary trust which, together with Mr. Lee Seng Hui’s personal interest, owns approximately 69.22% interest in the issued share capital of AGL which in turn owns approximately 74.99% of the issued share capital of APL, which in turn owns 50% interest in Art View. Accordingly, Mr. Lee Seng Huang is deemed to be interested in the continuing connected transaction contemplated under the Master Lease Agreement and the Sub-tenancy Agreement and has abstained from voting on the relevant board resolutions of the Company. PRE-COMPLETION LEASES AND EXPIRED LEASES The Board would also like to inform the Shareholders that during the recent negotiation of the transactions, the Company has become aware that:1.

upon Completion, the applicable percentage ratios calculated with reference to the total rental and management fees and charges paid by UAF to Art View in respect of a portion of the Premises under the Pre-completion Leases were more than 0.1% but less than 0.7% and accordingly, it would appear that the Company should have complied with Rule 14A.34 of the Listing Rules upon Completion; and

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2.

during the period between August 2006 and December 2013, there were certain occasions where upon the entering into certain of the Expired Leases and Existing Leases by UAF, the applicable percentage ratios calculated with reference to the total rental and managements fees and charges paid by UAF to Art View on an annual basis in respect of the Premises were, at the relevant times, more than 0.1% but less than 0.5% and accordingly, it would appear that the Company should have complied with Rule 14A.34 of the Listing Rules upon the entering into of such Expired Leases and/or Existing Leases.

The Board would like to confirm in relation to each of the Pre-completion Leases, Expired Leases and Existing Leases: 1.

each lease was entered into in the ordinary and usual course of business of the Company and on normal commercial terms;

2.

that the rental and management fee paid by UAF to Art View was determined with the then prevailing market conditions and as advised by independent valuer, the amount paid by UAF to Art View was not above the market rate; and

3.

the terms were fair and reasonable and in the interests of the the Company and its shareholders as a whole.

The main reason why the Company did not previously become aware the amounts of the various rentals as aforesaid may have from time to time in total exceeded 0.1% was that the leases were entered into at different times for different Premises and it was not realized that the totals were in excess. The Company has put in place a process to ensure that such oversight will not happen again. DEFINITIONS “AGL”

Allied Group Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board (Stock Code: 373), is a substantial shareholder of the Company through its interests in APL

“Allied Kajima Building”

Allied Kajima Building, 138 Gloucester Road, Wanchai, Hong Kong, which is owned as to 100% by Art View

“Annual Caps”

the annual aggregate maximum amounts of the rent and management fees and charges payable by the Group to Art View for the two years ending 31 December 2014 and 2015 under the Master Lease Agreement

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“APL”

Allied Properties (H.K.) Limited, a company incorporated in Hong Kong with limited liability, the securities of which are listed on the Main Board (Stock Code: 56 and Warrant Code: 1183), is a substantial shareholder of the Company and a non wholly-owned subsidiary of AGL

“Art View”

Art View Properties Limited, a joint venture of APL

“associate”

having the meaning ascribed to it under the Listing Rules

“Board”

the board of Directors

“Company”

Sun Hung Kai & Co. Limited, a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board (Stock Code: 86), and a non wholly-owned subsidiary of APL

“Completion”

completion of the acquisition of 100% shareholding interest in UAF Holdings Limited on 24 August 2006, upon which UAF has become a subsidiary of the Company

“connected persons”

having the meaning ascribed to it under the Listing Rules

“Directors”

the directors of the Company

“Existing Leases”

collectively (or individually) the following lease(s) entered into between Art View and UAF, further details of which are set out in the section headed “Existing Leases” of this announcement: (a) a tenancy agreement dated 10 April 2012 in respect of Room 801, Allied Kajima Building for a lease term of 2 years, 2 months and 7 days; (b) a tenancy agreement dated 10 April 2012 in respect of Room 802, Allied Kajima Building for a lease term of 2 years; (c) a tenancy agreement dated 24 April 2013 in respect of Room 1401-2, Allied Kajima Building for a term of 2 years;

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(d) a tenancy agreement dated 12 December 2012 in respect of Room 1601-3, Allied Kajima Building for a term of 2 years; (e) a tenancy agreement dated 14 February 2014 in respect of 20/F., Allied Kajima Building for a term of 2 years; and (f) a tenancy agreement dated 14 February 2014 in respect of 21/F., Allied Kajima Building for a term of 2 years. “Expired Leases”

the leases entered into between Art View and UAF in respect of the Premises after Completion and during the period between August 2006 and December 2011, which have already expired

“Group”

the Company and its subsidiaries from time to time

“Head Tenancy Agreement”

the head tenancy agreement dated 15 May 2013 entered into between Art View and AGL, in which the whole of 24th Floor of Allied Kajima Building was demised by Art View to AGL for a term commenced from 1 April 2013 to 31 March 2015

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“Leases”

the Existing Leases in relation to the Property and any renewal or amendments of these leases, and such other leases which may be entered into or renewed by members of the Group with Art View in relation to the Property under the Master Lease Agreement from time to time

“Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

“Main Board”

Main Board of the Stock Exchange (excludes the option market) operated by the Stock Exchange

“Master Lease Agreement”

the master lease agreement dated 14 February 2014 entered into between the Company and Art View in respect of the leasing of the Property by Art View to the Group

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“Pre-completion Leases”

the leases entered into between Art View and UAF prior to, and existed on, the Completion in respect of a portion of the Premises

“Premises”

all the premises in Allied Kajima Building which are leased by Art View to UAF as detailed in the column titled “Premises” of the table under the section headed “Existing Leases” in this announcement

“Property”

Allied Kajima Building

“percentage ratio(s)”

percentage ratio(s) as set out in Rule 14.07 of the Listing Rules to be applied for determining the classification of a transaction

“Shareholder(s)”

the shareholders of the Company

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Sub-tenancy Agreement”

the sub-tenancy agreement dated 14 February 2014 entered into between AGL and UAF, pursuant to which a portion of 24th Floor of Allied Kajima Building was sub-leased by AGL to UAF for a term commenced from 1 January 2014 to 31 March 2015

“substantial shareholder”

having the meaning ascribed to it under the Listing Rules

“UAF”

United Asia Finance Limited, a company incorporated in Hong Kong with limited liability, a non whollyowned subsidiary of the Company

On behalf of the Board Sun Hung Kai & Co. Limited Peter Anthony Curry Executive Director Hong Kong, 14 February 2014

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As at the date of this announcement, the Board comprises: Executive Directors: Messrs. Lee Seng Huang (Group Executive Chairman), William Leung Wing Cheung, Joseph Tong Tang and Peter Anthony Curry Non-Executive Directors: Messrs. Goh Joo Chuan, Ho Chi Kit (Roy Kuan as his alternate) and Leung Pak To (Liu Zheng as his alternate) Independent Non-Executive Directors: Messrs. David Craig Bartlett, Alan Stephen Jones, Carlisle Caldow Procter and Peter Wong Man Kong

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