Portico International : Continuing Connected Transaction-Lease Agreements

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寶國國際控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 589)

The Board announces that, on 27 January 2017, Ports Beijing as the landlord entered into the 2017 First Lease Agreement and 2017 Second Lease Agreement, respectively, with Beijing Scitech Pharmaceuticals and Beijing Northern Anitech as the tenants in relation to the leasing of certain buildings at Premises A and Premises B, respectively, for a term of three years commencing from 1 February 2017 to 31 January 2020.

Prior to the entering into of the 2017 First Lease Agreement and 2017 Second Lease Agreement, on 1 September 2015, Ports Beijing as the landlord had entered into the 2015 Lease Agreement with Beijing Scitech Pharmaceuticals as the tenant in relation to the leasing of certain buildings at Premises C for a term of three years commencing from 1 September 2015 to 31 August 2018. The rent receivable under the 2015 Lease Agreement fell within the de-minimis threshold under Rule 14A.76 of the Listing Rules at the relevant time and hence, the transaction was fully exempt from reporting, annual review, announcement and independent Shareholders' approval requirements.

Beijing Scitech Pharmaceuticals and Beijing Northern Anitech are direct wholly owned subsidiary of Beijing Scitech Holdings and are ultimately owned by Mr. Alfred Chan, who is an executive Director and a substantial shareholder (as defined in the Listing Rules) of the Company, and Mr. Edward Tan, who is a substantial shareholder (as defined in the Listing Rules) of the Company.

*for identification purpose only

As such, as at the date of this announcement, Beijing Scitech Pharmaceuticals and Beijing Northern Anitech are associates (as defined in the Listing Rules) of the connected persons of the Company and are therefore connected persons of the Company within the meaning of the Listing Rules. Accordingly, the transactions contemplated under the 2017 First Lease Agreement and 2017 Second Lease Agreement constitute continuing connected transactions for the Company pursuant to Chapter 14A of the Listing Rules.

Pursuant to Rule 14A.81 of the Listing Rules, the annual caps of the continuing connected transactions under the Lease Agreements will be aggregated for the purpose of calculating the percentage ratios (as defined under Rule 14.07 of the Listing Rules). As one or more of the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) for the Transactions are more than 0.1% but less than 5%, the Transactions contemplated under the Lease Agreements 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.

On 27 January 2017, Ports Beijing as the landlord entered into the 2017 First Lease Agreement and 2017 Second Lease Agreement, respectively, with Beijing Scitech Pharmaceuticals and Beijing Northern Anitech as the tenants in relation to the leasing of certain buildings at Premises A and Premises B, respectively, for a term of three years commencing from 1 February 2017 to 31 January 2020.

Prior to the entering into of the 2017 First Lease Agreement and 2017 Second Lease Agreement, on 1 September 2015, Ports Beijing as the landlord had entered into the 2015 Lease Agreement with Beijing Scitech Pharmaceuticals as the tenant in relation to the leasing of certain buildings at Premises C for a term of three years commencing from 1 September 2015 to 31 August 2018. The rent receivable under the 2015 Lease Agreement fell within the de-minimis threshold under Rule 14A.76 of the Listing Rules at the relevant time and hence, the transaction was fully exempt from reporting, annual review, announcement and independent Shareholders' approval requirements.

Beijing Scitech Pharmaceuticals and Beijing Northern Anitech are direct wholly owned subsidiary of Beijing Scitech Holdings and are ultimately owned by Mr. Alfred Chan, who is an executive Director and a substantial shareholder (as defined in the Listing Rules) of the Company, and Mr. Edward Tan, who is a substantial shareholder (as defined in the Listing Rules) of the Company.

As such, as at the date of this announcement, Beijing Scitech Pharmaceuticals and Beijing Northern Anitech are associates (as defined in the Listing Rules) of the connected persons of the Company and are therefore connected persons of the Company within the meaning of the Listing Rules. Accordingly, the transactions contemplated under the 2017 First Lease Agreement and 2017 Second Lease Agreement constitute continuing connected transactions for the Company pursuant to Chapter 14A of the Listing Rules.

The principal terms of the 2017 First Lease Agreement are as follows:-

(2) Beijing Scitech Pharmaceuticals, as tenant

per sq. m. per day

Scitech Pharmaceuticals fails to comply with the terms and conditions of the 2017 First Lease Agreement

payment of the utility fees, including water, electricity and telephone network, as well as carpark usage fee and property management fee

The principal terms of the 2017 Second Lease Agreement are as follows:-

(2) Beijing Northern Anitech, as tenant

sq.m.

per sq. m. per day

Northern Anitech fails to comply with the terms and conditions of the 2017 Second Lease Agreement

the utility fees, including water, electricity and telephone network, as well as carpark usage fee and property management fee

The rent under the 2017 First Lease Agreement and 2017 Second Lease Agreement are determined after arm's length negotiations between Ports Beijing, Beijing Scitech Pharmaceuticals and Beijing Northern Anitech, respectively, with references to the prevailing available market rate of comparable properties.

The aggregate historical rentals paid by Beijing Scitech Pharmaceuticals to Ports Beijing under the 2015 Lease Agreement for the financial years ended 31st December 2015 and 31st December 2016 are RMB 205,500 and RMB 616,500 respectively.

In accordance with Rule 14A.53 of the Listing Rules, the aggregate annual caps for the maximum aggregate rental payable under the Transactions, for the three financial years ending 31 December 2019 and one month ending 31 January 2020 are set out below: -

Financial year Financial year Financial year One month ending 31st ending 31st ending 31st ending 31st December, 2017 December, 2018 December, 2019 January, 2020 RMB RMB RMB RMB

2015 Lease Agreement

616,500 411,000 - -

(up to 31st August 2018)

2017 First Lease Agreement 2017 Second

Lease Agreement

714,670 779,640 779,640 64,970

3,947,111 4,305,939 4,305,939 358,828

The annual caps are determined by reference to the aggregate rentals to be received by Ports Beijing under the Transactions.