Shandong Weigao Medical Polymer : 25/11/2016 1) RENEWAL OF CONTINUING CONNECTED TRANSACTIONS IN RESPECT OF FRAMEWO...

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(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1066)

1. RENEWAL OF CONTINUING CONNECTED TRANSACTIONS IN RESPECT OF FRAMEWORK AGREEMENTS WITH WEIGAO HOLDING GROUP
2. RENEWAL OF CONTINUING CONNECTED TRANSACTIONS IN RESPECT OF

Reference is made to the announcement and circular of the Company dated 30 August 2013 and 27 September 2013 pursuant to which, it was stated, inter alia, that the annual caps for the continuing connected transactions contemplated under the Framework Agreements 2013 between the Group and the Weigao Holding Group for each of the three years ended 31 December 2014, 2015 and the year to be ending 31 December 2016 and will be expired on 31 December 2016.

* For identification purpose only

The Board hereby announces that on 25 November 2016, the Group renewed and entered into the Framework Agreements 2016 with the Weigao Holding Group for a further term of two years commencing from 1 January 2017 and expiring on 31 December 2018.

The proposed annual caps have been determined after taking into account (i) the historical transaction figures under the existing Framework Agreements 2013; (ii) the expected year on year expansion of the business scope of the Group; and (iii) the expansion of the business line of the Group to provide centralised distribution services to hospitals to be commenced from the year of 2017.

Reference is made to the announcements of the Company dated 30 December 2015 and 6 January 2016 pursuant to which, the existing annual cap for the continuing connected transactions contemplated under the financial leasing and factoring framework agreement between the Group and Weigao Holding Group for the year ending 31 December 2016 is less than RMB260.0 million (equivalent to approximately HK$293.8 million), will be expired on 31 December 2016.

The Board hereby announces that on 25 November 2016, the Group entered into the Financial Leasing and Factoring Framework Agreement 2016 with the Weigao Holding Group for a further term of two years commencing from 1 January 2017 and expiring on 31 December 2018.

The proposed annual cap has been determined after taking into account the expected asset base of the Group and the availability of capital funding for the financial leasing and factoring business of the Group.

As at the date of this announcement, the Weigao Holding is the controlling shareholder of the Company. As such, Weigao Holding is a connected person of the Company. The transactions contemplated under the Framework Agreements 2016 and the Financial Leasing and Factoring Framework Agreement 2016 entered into between the Company and the Weigao Holding Group constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio under Rule 14.07 of the Listing Rule in respect of the Framework Agreements 2016 and the Financial Leasing and Factoring Framework Agreement exceed 0.1%, but is less than 5.0%. Such transactions contemplated under the Framework Agreements 2016 and the Financial Leasing and Factoring Framework Agreement 2016 are therefore subject to the reporting and announcement requirements, but exempt from circular (including independent financial advice) and Independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

The Board is pleased to announce that on 25 November 2016, the Company entered into the Framework Agreements 2016 and the Financial Leasing and Factoring Framework Agreement 2016 with the Weigao Holding, a controlling shareholder of the Company.

1. Renewal of Continuing Connected Transactions between the Group and the Weigao Holding Group - the Framework Agreements 2016, comprising the Purchase

   Framework Agreement, the Sales Framework Agreement, the Tenancy Framework Agreement and the Services Framework Agreement

   The Company entered into the Purchase Framework Agreement, the Sales Framework Agreement, the Tenancy Framework Agreement, the Services Framework Agreement (collectively the Framework Agreements 2016) on 25 November 2016 to renew and to re-set a maximum aggregate annual cap for the continuing connected transactions between the Group and the Weigao Holding Group for a term of two years from 1 January 2017 to 31 December 2018, details of which are stated as follows.

2. Purchase Framework Agreement

Principal terms of the Purchase Framework Agreement:-

Date: 25 November 2016

Parties: (1) the Company

(2) the Weigao Holding Group

Duration: For a term of two years from 1 January 2017 to 31

December 2018.

Nature of transaction: The Company agrees to purchase or procure its subsidiaries

to purchase, and the Weigao Holding agrees to sell or procure its subsidiaries to sell medical based products, including and not limited to, medical equipment, medical raw materials, medical packaging materials, pharmaceutical, machine accessories and parts and office stationery on a non-exclusive basis.

Pricing basis Prices and terms of purchase with respect to medical

equipment, medical raw materials, medical packaging materials, pharmaceutical, machine accessories and parts and office stationery sold by the Weigao Holding Group shall be determined in the ordinary course of business and on normal commercial terms, negotiated on an arm's length basis and at prices and terms no more favourable to the Weigao Holding Group or no less favorable terms to the Group, than those available to independent third parties.