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.

® KINGDEE INTERNATIONAL SOFTWARE GROUP COMPANY LIMITED

金 蝶 國 際 軟 件 集 團 有 限 公 司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 268) CONTINUING TRANSACTIONS BECOMING CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcement dated 28 July 2016 of the Company in which it was announced that Shenzhen CloudHub has, as a result of the Shenzhen CloudHub Agreement, ceased to be a controlled structured entity in the consolidated financial statements of the Company and become a subsidiary of Baijin Investment, Shenzhen CloudHub has become an associate of Mr. Xu and therefore a connected person of the Company.

Pursuant to the Strategic Cooperation Framework Agreement dated 1 January 2016 entered into between Kingdee China, a wholly-owned subsidiary of the Company, and Shenzhen CloudHub, the parties agreed to enter into cooperation in several specific areas as set out in the agreement. The term of the Strategic Cooperation Framework Agreement is two years from the date of the agreement.

By reason of the Shenzhen CloudHub Agreement, Shenzhen CloudHub has, since 28 July 2016, become a connected person of the Company and as a result, since the same date, the transactions under the Strategic Cooperation Framework Agreement have become continuing connected transactions of the Company pursuant to Rule 14A.60(1) of the Listing Rules and the Company is making this announcement on this basis.

There has been a delay in the announcement of the continuing transactions under the Strategic Cooperation Framework Agreement becoming continuing connected transactions and further details are set out in this announcement.

Reference is made to the announcement dated 28 July 2016 of the Company in which it was announced that Shenzhen CloudHub has, as a result of the Shenzhen CloudHub Agreement, ceased to be a controlled structured entity in the consolidated financial statements of the Company and become a subsidiary of Baijin Investment, Shenzhen CloudHub has become an associate of Mr. Xu and therefore a connected person of the Company.

STRATEGIC COOPERATION FRAMEWORK AGREEMENT

Pursuant to the Strategic Cooperation Framework Agreement dated 1 January 2016 entered into between Kingdee China, a wholly-owned subsidiary of the Company, and Shenzhen CloudHub, the parties agreed to enter into cooperation in the following areas:

  1. Shenzhen CloudHub appoints Kingdee China as a distributor for Kingdee China to purchase the PrivateCloud Products from Shenzhen CloudHub and further distribution in the PRC (including Hong Kong) ("Category A");

  2. Kingdee China agrees to use its channels and networks to promote the PublicCloud Products of Shenzhen CloudHub ("Category B") in consideration of a promotion fee payable by Shenzhen CloudHub to Kingdee China; and

  3. Shenzhen CloudHub agrees to use the strengths of its mobile office platform to provide sales support, business consultation and other services for the sale of Kingdee collaborative office software ("Category C") in consideration of a service fee payable by Kingdee China to Shenzhen CloudHub.

In addition, both parties agreed to work together to promote technological advancement and undertake technological exchange regularly or on an ad hoc basis. If such cooperation will involve in any technology transfer, the parties will enter into separate agreements regarding such transfer.

The term of the Strategic Cooperation Framework Agreement is two years from the date of the agreement. Pursuant to the terms of the Strategic Cooperation Framework Agreement, the pricing for the transactions under the above Categories A, B and C should be determined by reference to market prices offered to any independent third party by Shenzhen CloudHub or Kingdee China (as the case may be) for similar products and/or services.

CONTINUING TRANSACTIONS BECOMING CONTINUING CONNECTED TRANSACTIONS

By reason of the Shenzhen CloudHub Agreement, Shenzhen CloudHub has, since 28 July 2016, become a connected person of the Company and as a result, since the same date, the transactions under the Strategic Cooperation Framework Agreement have become continuing connected transactions of the Company pursuant to Rule 14A.60(1) of the Listing Rules and the Company is making this announcement on this basis. Based on the below historical amounts (since 28 July 2016) and the annual caps for the financial year of 2017, the transactions under the Strategic Cooperation Framework Agreement are, pursuant to Rule 14A.60(1) of the Listing Rules, subject to the reporting, annual review and announcement requirements under Chapter 14A of the Listing Rules.

HISTORICAL AMOUNTS AND 2017 ANNUAL CAPS

The following table sets out the historical amounts for the period from 28 July 2016 to 31 December 2016 and the annual caps for the financial year of 2017. No annual cap was applicable for the financial year ended 31 December 2016:

Category Historical amount for the period from 28 July to 31 December 2016 Annual caps for the year ending 31 December 2017

(RMB) (RMB)

Category A and Category C (on an aggregated basis) 13,808,000 25,000,000 Category B 9,389,000 35,000,000

Total 23,197,000 60,000,000

Based on the above, the Directors (including the independent non-executive Directors) consider that the terms of the Strategic Cooperation Agreement, the above historical amounts in 2016 and the 2017 annual caps are fair and reasonable, on normal commercial terms and in the interests of the Company and shareholders of the Company as a whole, and the transactions under the Strategic Cooperation Framework Agreement are transactions in the ordinary and usual course of business of the Group.

REASONS FOR AND BENEFITS OF THE STRATEGIC COOPERATION FRAMEWORK AGREEMENT

The Company believes that the Strategic Cooperation Framework Agreement with Shenzhen CloudHub enables the Group to offer competitive products with significant differentiation and more comprehensive ERP solutions to customers, so as to facilitate the business development and branding of ERP products in the enterprise Internet market. The Company also believes the cooperation with Shenzhen CloudHub can strengthen the expertise and marketing capabilities of the Group in the enterprise Internet segment.

DELAY IN DISCLOSURE

In the course of preparing for the year-end financial audit for the year ended 31 December 2016, the Company noted that, due to the change in capacity of Shenzhen CloudHub as a connected person since 28 July 2016, it should have announced the transactions under the Strategic Cooperation Framework Agreement at around the same time as the announcement of the Company dated 28 July 2016 in accordance with Rule 14A.60(1) of the Listing Rules. The Company regrets that this was not announced at the relevant time. In order to avoid re-occurrence of a similar incident, the Group has strengthened its internal controls in monitoring all connected transactions and continuing connected transactions within the Group and will provide specific training to all current and new staff who are responsible for sales and those who monitor connected transactions for the Group. The Company will continue to closely monitor the conduct of the transactions under the Strategic Cooperation Framework Agreement and re-comply with Chapter 14A of the Listing Rules if required.

GENERAL INFORMATION

Shenzhen CloudHub is principally engaged in the provision of mobile Internet enterprise services through a mobile office platform offered to registered enterprises and organizations.

Baijin Investment is an investment holding company and the registered holder of 60.35% of the equity interest in Shenzhen CloudHub. As Mr. Xu, an executive Director, the Chairman of the Board and the controlling shareholder of the Company, is beneficially interested in 100% of Baijin Investment's equity interest, Shenzhen CloudHub is an associate of Mr. Xu and is therefore a connected person of the Company.

The Group is principally engaged in the provision of software products and Cloud services for corporates, government organizations and other users worldwide. Kingdee China is a direct wholly-owned subsidiary of the Company, which, together with its subsidiaries, principally carries out business in the corporate management software and internet services markets.

DEFINITIONS

"associate" has the meaning ascribed to it under the Listing Rules

"Baijin Investment" 深圳白金投資有限公司 (Shenzhen Baijin Investment Company

Limited*), a company incorporated in the PRC and wholly owned by Mr. Xu

"Board" the board of Directors

"Company" Kingdee International Software Group Company Limited, a company incorporated in the Cayman Islands with limited liabilities, whose shares are listed on the Stock Exchange (Stock Code: 268)

"connected person" has the meaning ascribed to it under the Listing Rules "Group" the Company and its subsidiaries

"Hong Kong" the Hong Kong Special Administrative Region of the People's

Republic China

"Hongjin Investment" 深圳弘金投資有限公司 (Shenzhen Hongjin Investment Company

Limited*), a company incorporated in the PRC, the equity interest of which is held as to 99% by Mr. Xu and as to 1% by a Mr. Chang Zhu, and is regarded as a controlled structured entity in the Group's consolidated financial statements through certain contractual arrangements entered into among Kingdee China, the equity holders of Hongjin Investment and Hongjin Investment

"Kingdee China" 金蝶軟件(中國)有限公司 (Kingdee Software (China) Co., Ltd*),

a company incorporated in the PRC and a direct wholly-owned subsidiary of the Company

"Listing Rules" the Rules Governing the Listing of Securities on the Stock

Exchange

Kingdee International Software Group Co. Ltd. published this content on 10 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 10 March 2017 11:53:05 UTC.

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