Th e S t o c k E x c h a n g e o f Ho n g K o n g Li mi t e d t a k e s n o re sp o n si b i l i t y f o r t h e c o n t e n t s o f t h i s announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.



ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS

On 10 September 2012, Zhongnuo, a non-wholly owned subsidiary of the Company, entered into the Master Agreement with Guangdong Titan in relation to the sale and purchase of the Antibiotics Products for a term commencing from 10 September 2012 and expiring on 9 September 2015. Guangdong Titan is a wholly-owned subsidiary of a substantial shareholder of Siping, a non- wholly owned subsidiary of the Company, accordingly a connected person of the Company and the Transactions constitute continuing connected transactions of the Company under the Listing Rules.
Since the applicable percentage ratios are, on an annual basis, more than 1% but less than 5%, the Transactions are only subject to reporting, announcement and annual review requirements and are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

THE MASTER AGREEMENT Date

10 September 2012

Parties

1. Zhongnuo, a non-wholly owned subsidiary of the Company, as seller
2. Guangdong Titan, a connected person of the Company, as purchaser

Duration

A term commencing from 10 September 2012 to 9 September 2015
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Nature of Transactions

Sale and purchase of the Antibiotics Products

Terms

The Master Agreement sets out the general terms and conditions for the sale and purchase of the Antibiotics Products by Zhongnuo to Guangdong Titan. The prices and payment terms of the Transactions shall be negotiated by Zhongnuo and Guangdong Titan from time to time with reference to prevailing market prices, on normal commercial terms and on terms no less favourable to Zhongnuo than those available to Zhongnuo from independent third parties.

Historical transactions

The amount of sales from Zhongnuo to Guangdong Titan for the Antibiotics Products for the two financial years ended 31 December 2010 and 2011 amounted to approximately RMB11,439,000 and RMB30,492,000 respectively.

Annual Caps

The annual caps for the Transactions during the term of the Master Agreement are as follows:
For the period from 10 September 2012 to 31 December 2012 RMB20,000,000 (approximately HK$24,390,000)
For the year ending 31 December 2013 RMB37,000,000 (approximately HK$45,122,000)
For the year ending 31 December 2014 RMB37,000,000 (approximately HK$45,122,000)
For the period from 1 January 2015 to 9 September 2015 RMB30,000,000 (approximately HK$36,585,000)

Basis for the annual caps

The annual caps are determined by reference to the historical sales amounts for the Transactions and the expected growth in business between Zhongnuo and Guangdong Titan.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

Guangdong Titan is an existing customer of the Group. By entering into the Master Agreement, the
Group will be able to maintain its business relationship with Guangdong Titan.
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The Board (including the independent non-executive Directors) is of the opinion that the Master Agreement was entered into (i) in the ordinary and usual course of business of the Group, (ii) on normal commercial terms agreed after arm's length negotiation between the parties; and (iii) on terms that are fair and reasonable and in the interests of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

Zhongnuo is a non-wholly owned subsidiary of the Company. Guangdong Titan is a wholly-owned subsidiary of a substantial shareholder of Siping, a non-wholly owned subsidiary of the Company. Accordingly, Guangdong Titan is a connected person of the Company and the Transactions constitute continuing connected transactions of the Company under the Listing Rules.
Since the applicable percentage ratios are, on an annual basis, more than 1% but less than 5%, the Transactions are only subject to reporting, announcement and annual review requirements and are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
None of the Directors has a material interest in the Transactions which requires him to abstain from voting on the resolution of the Board approving the Master Agreement and the Transactions pursuant to Rule 13.44 of the Listing Rules and the Articles of Association of the Company.

GENERAL INFORMATION

The principal activity of the Company is investment holding. The principal activities of the subsidiaries of the Company include the manufacture and sales of pharmaceutical products.
Guangdong Titan is principally engaged in the manufacture and sales of bulk cephalosporin products and fine chemicals in Guangdong Province of the PRC.

DEFINITIONS

"Antibiotics Products" various intermediate and bulk antibiotics products, including without limitation D-7ACA
"Board" the board of Directors
"Company" China Pharmaceutical Group Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange
"Directors" the directors of the Company
"Group" the Company and its subsidiaries
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"Guangdong Titan" J1 * iL