Li & Fung : CONTINUING CONNECTED TRANSACTIONS-AMENDED AND RESTATED BUYING AGENCY AGREEMENT

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The Board announces that on 14 November 2016, Li & Fung (Trading) Limited, an indirect wholly-owned subsidiary of the Company, entered into the Amended and Restated Buying Agency Agreement with a subsidiary of Global Brands for a term from 9 July 2017 to 31 March 2020 which will become effective upon the approval of the shareholders of Global Brands. The Board approved to set the annual caps for the maximum aggregate commission and other service fees payable under the Agreements for another three years for 2017, 2018 and 2019 for compliance with Rule 14A.53 of the Listing Rules.

Global Brands is an associate of FH 1937, a substantial shareholder of both the Company and Global Brands. Accordingly, the Group and the Global Brands Group are connected persons of each other. Accordingly, the transactions contemplated under the Agreements constitute continuing connected transactions of the Company under the Listing Rules. As all the applicable percentage ratios for the Company are more than 0.1% but less than 5%, such transactions are subject to the reporting, annual review and announcement requirements, but are exempt from the independent shareholders' approval requirement, under Chapter 14A of the Listing Rules.

Reference is made to the announcement of the Company dated 21 August 2014 in relation to, among other things, the continuing connected transactions between the Company and Global Brands Group under the Buying Agency Agreement. The Buying Agency Agreement is for a term of three years from 9 July 2014 and the annual caps for the maximum aggregate commission and other service fees payable under the Buying Agency Agreement were set for three years of 2014, 2015 and 2016.

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On 14 November 2016, Li & Fung (Trading) Limited, an indirect wholly-owned subsidiary of the Company, entered into the Amended and Restated Buying Agency Agreement with Millwork Pte. Ltd., an indirect wholly-owned subsidiary of Global Brands for a term from 9 July 2017 to 31 March 2020 which will become effective upon the approval of the shareholders of Global Brands. The Amended and Restated Buying Agency Agreement is subject to the approval of the shareholders of Global Brands because one or more of the applicable percentage ratios for Global Brands exceeds 5%. The Board approved to set the annual caps for the maximum aggregate commission and other service fees payable under the Agreements for another three years for 2017, 2018 and 2019 for compliance with Rule 14A.53 of the Listing Rules.

Date

14 November 2016

Parties

1. Li & Fung (Trading) Limited, an indirect wholly-owned subsidiary of the Company

2. Millwork Pte. Ltd., an indirect wholly-owned subsidiary of Global Brands

Transaction Nature

The Group provides sourcing and supply chain management services to members of the Global Brands Group for no less than 50% of their total sourcing requirements for the term of the Amended and Restated Buying Agency Agreement at a commission not exceeding 7% of the FOB price on all products and components sourced through the Group. The commission of each transaction will be determined by the relevant member of the Group and the relevant member of Global Brands Group at the time they enter into a transaction with reference to (i) price and payment terms, (ii) scope of the services, and (iii) other relevant factors with a view to ensuring that the commission of each transaction is fair and reasonable.

Term

9 July 2017 to 31 March 2020

For each of 2014, 2015 and 2016, total commission payable to the Group by the Global Brands Group did not exceed 7% on total purchases with the assistance of the Group. Total purchases with the assistance of the Group for the two years ended 31 December 2015 and the nine months ended 30 September 2016 are as follows:-

US$1,666 million US$1,627 million US$1,061 million

The aggregate commission and other service fees paid to the Group has been within the annual caps for the Buying Agency Agreement as disclosed in the Company's announcement dated 21 August 2014.

The annual caps for the maximum aggregate commission and other service fees payable under the Agreements between the Group and the Global Brands Group for the three financial years ending 31 December 2016 and the new annual caps for the three financial years ending 31 December 2019 are set out below:-

Note: This cap includes the maximum aggregate commission and other service fees payable under the Buying Agency Agreement prior to its expiry on 8 July 2017.

New annual caps have been determined with reference to (i) the historical commissions paid to the Group for sourcing and supply chain management services; and (ii) the estimated future growth in Global Brands Group's volume requirements over the term of the Agreements.

The Company will set new annual caps for the remaining period of the Amended and Restated Buying Agency Agreement (i.e. 1 January 2020 - 31 March 2020) to comply with the then applicable provisions of the Listing Rules relating to continuing connected transactions.

As mentioned in the Company's announcement dated 21 August 2014, the volume of transactions under the Buying Agency Agreement means the Global Brands Group is a large customer of the Group. The minimum volume commitment of no less than 50% of total sourcing requirements of the Global Brands Group gives sufficient certainty on volume to allow the Group to offer a high level of service and dedicated resources to the Global Brands Group under the Buying Agency Agreement.

The Directors (including the Independent Non-executive Directors) consider that the Amended and Restated Buying Agency Agreement (together with the annual caps) has been entered into on normal commercial terms after arm's length negotiations between the parties, and in the ordinary and usual course of business of the Group, and the terms thereof (together with the annual caps) are fair and reasonable and in the interests of the Company and its shareholders as a whole.

Dr. Victor Fung Kwok King, being a director of both the Company and FH 1937, and Dr. William Fung Kwok Lun being a director of the Company, Global Brands and FH 1937, are considered to have a material interest in the transactions contemplated under the Amended and Restated Buying Agency Agreement, and therefore abstained from voting on the board resolutions in respect of the Amended and Restated Buying Agency Agreement and determination of new annual caps under the Agreements. Mr. Spencer Theodore Fung, being a director of the Company and the son of Dr. Victor Fung Kwok King, and Mr. Paul Edward Selway-Swift, being an independent non-executive director of both the Company and Global

Brands, also abstained from voting on the board resolutions in respect of the Amended and Restated Buying Agency Agreement and determination of new annual caps under the Agreements.

Global Brands is an associate of FH 1937, a substantial shareholder of both the Company and Global Brands. Accordingly, the Group and the Global Brands Group are connected persons of each other. Accordingly, the transactions contemplated under the Agreements constitute continuing connected transactions of the Company under the Listing Rules.

As all the applicable percentage ratios are more than 0.1% but less than 5%, such transactions are subject to the reporting, annual review and announcement requirements, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Group is recognized as the world's leader in consumer goods design, development, sourcing and logistics. It specializes in responsibly managing supply chains of high-volume, time-sensitive goods for leading retailers and brands worldwide.

Global Brands Group is principally engaged in the design, development, marketing and sale of branded apparel, footwear, fashion accessories and related lifestyle products.

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:-

"Agreements" Buying Agency Agreement together with Amended and Restated Buying Agency Agreement

"Amended and Restated Buying Agency Agreement"

the amended and restated buying agency agreement dated 14 November 2016 entered into between Millwork Pte. Ltd. and Li & Fung (Trading) Limited

"associate(s)", "connected person(s)", "percentage ratio(s)", "substantial shareholder(s)"

each has the meaning ascribed to it in the Listing Rules

"Board" the board of Directors of the Company

"Buying Agency Agreement"

The buying agency agreement dated 24 June 2014 between Millwork Pte. Ltd., an indirect wholly-owned subsidiary of Global Brands and LF Centennial Pte. Ltd., an indirect wholly-owned subsidiary of the Company