Vedan International (Holdings) Limited and Taiwan Vedan have entered into the New Taiwan Agreements on 15 December 2023 on substantially similar terms as the Existing Taiwan Agreements (save and except, among other things, that the cap for the New Taiwan Sales Agreement will be decreased from USD 50,000,000 to USD 3,500,000) and each for a term of three years from 1 January 2024 to 31 December 2026, subject to compliance with the relevant requirements under the Listing Rules. References are made to the Company's announcements dated 7 December 2020 and 4 May 2021 and the Company's circular dated 2 June 2021 relating to, among other things, the following continuing connected transactions between the Taiwan Vedan Group and the Group: the provision of certain technological support services by the Taiwan Vedan Group to the Group pursuant to the Existing Technology Support Agreement; and the sales of the Products to the Taiwan Vedan Group pursuant to the Existing Taiwan Sales Agreement. The Existing Taiwan Agreements will expire on 31 December 2023.

Pursuant to the New Technology Support Agreement dated 15 December 2023 entered into between Taiwan Vedan and the Company, Taiwan Vedan has agreed to provide and/or to procure other member(s) of the Taiwan Vedan Group to provide to the Group during the Relevant Period certain technological support services (including provision of staff training and staff secondment to the production complexes of the Group in Vietnam and the PRC upon request of the Group) for the purpose of supporting the product research and development activities of the Group for the development of advanced fermentation technology as may be required by the Group from time to time. The Company has agreed to pay or procure to be paid to Taiwan Vedan a service fee at the rate of 1% of the turnover of Vietnam Vedan and Xiamen Vedan during the Relevant Period, which is the same as the service fee rate under the Existing Technology Support Agreement. The basis of the service fee rate was principally determined after arm 's length negotiations and on normal commercial terms after taking into account the following factors: (i) the experience and background of the Taiwan Vedan Group; (ii) to the Directors' knowledge, there being no companies in the Taiwan market the business of which is to provide specific technological support services for the development of advanced fermentation technology; and (iii) the need of the Group for technological support services for research and development of new products.

The service fee shall be paid within 60 days from the publication of the Company's audited accounts for the relevant financial year of the Relevant Period and shall be subject to a cap of USD 2,500,000 in respect of each financial year during the Relevant Period (equivalent to approximately HKD 19,500,000). The Taiwan Vedan Group has been providing to the Group technological support services for the development of advanced fermentation technology and to the Directors' knowledge there are no companies in the market the business of which is to provide such technological support services. The Directors believe that the continuous technological support from the Taiwan Vedan Group will benefit the Group 's future business developments.

Pursuant to the New Taiwan Sales Agreement dated 15 December 2023 entered into between Taiwan Vedan and the Company, the Group will sell the Products to the Taiwan Vedan Group for use in Taiwan during the Relevant Period. The price of the Products payable by Taiwan Vedan and/or other member(s) of the Taiwan Vedan Group to the relevant member of the Group shall be determined in accordance with and be not more favourable to the Taiwan Vedan Group than the price charged by the relevant member of the Group to other independent customers of the Group in respect of the relevant Products. The management of the Company will determine the price of the Products after taking into consideration the production costs and the market price of the Products in Taiwan, aiming at maintaining an overall gross margin within a range of approximately 13% to 17%.

The price of the Products is subject to review by the Board from time to time and at least once every six months. The price of the Products shall be paid to the relevant member of the Group by Taiwan Vedan and/or other member(s) of the Taiwan Vedan Group within 60 days from the end of the month in which the relevant Products are delivered by the Group. The Group has been selling the Products to the Taiwan Vedan Group and the Directors believe that the continuous sale of the Products to the Taiwan Vedan Group will generate additional income to the Group.

The Group has formulated a series of measures and policies to ensure that the continuing connected transactions contemplated under the New Technology Support Agreement and the New Taiwan Sales Agreement (collectively the "Transactions") will be implemented in accordance with the terms of the respective agreements and the respective pricing policies. The management of the Company will review, among others, the pricing involved in the transactions contemplated under the New Taiwan Sales Agreement and compare it with other independent customers on a quarterly basis to ensure that the pricing and certain major terms of such transactions are fair and reasonable, and shall report the relevant information at least once every six months to the Board for review.