Shanghai Fosun Pharmaceutical : CONNECTED TRANSACTION - FORMATION OF THE JV COMPANY

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上 海 復 星 醫 藥（集 團）股 份 有 限 公 司

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.*

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

(Stock Code: 02196)

CONNECTED TRANSACTION

FORMATION OF THE JV COMPANY

FORMATION OF THE JV COMPANY

The Board announced that, on 4 February 2021, Tianjin Qianda, a subsidiary of the Company, entered into the Shareholders Agreement with Fosun Trade in relation to the Formation of JV, pursuant to which the registered capital of the JV Company is RMB50 million, of which Tianjin Qianda proposed to make cash contribution in the amount of RMB25.5 million, representing 51% of the equity interest in the JV Company, and Fosun Trade proposed to make cash contribution in the amount of RMB24.5 million, representing 49% of the equity interest in the JV Company. After the establishment of the JV Company, it will become a subsidiary of the Company.

IMPLICATIONS OF THE HONG KONG LISTING RULES

As Fosun Trade is a subsidiary of Fosun High Tech, Fosun Trade constitutes an associate of Fosun High Tech, hence a connected person of the Company under Rule 14A.07 of the Hong Kong Listing Rules. Therefore, the Formation of JV constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules. Given that the party to the Shareholders Agreement is the same connected person as the relevant parties to Previous Connected Transactions, the Formation of JV and the Previous Connected Transactions shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. As the percentage ratio applicable to the sum of the Formation of JV and the Previous Connected Transactions is more than 0.1% but less than 5%, the Formation of JV is subject to reporting and announcement requirements but is exempted from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.

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1. FORMATION OF THE JV COMPANY
   The Board announced that, on 4 February 2021, Tianjin Qianda, a subsidiary of the Company, entered into the Shareholders Agreement with Fosun Trade in relation to the Formation of JV, pursuant to which the registered capital of the JV Company is RMB50 million, of which Tianjin Qianda proposed to make cash contribution in the amount of RMB25.5 million, representing 51% of the equity interest in the JV Company, and Fosun Trade proposed to make cash contribution in the amount of RMB24.5 million, representing 49% of the equity interest in the JV Company. After the establishment of the JV Company, it will become a subsidiary of the Company.
   The principal terms of the Formation of JV and Shareholders Agreement are summarized below:
   Date
   4 February 2021
   Parties
2. 1. Tianjin Qianda; and
   2. Fosun Trade

Capital Contribution

The capital contribution payable by Tianjin Qianda for the establishment of the JV Company is RMB25.5 million, representing 51% of the equity interest in the JV Company. Such amount of capital contribution to the JV Company was determined after arm's-length negotiations between the parties to the Shareholders Agreement with reference to the capital requirement of the JV Company in carrying out its business activities. Under the terms of the Formation of JV, each of Tianjin Qianda and Fosun Trade shall make their respective capital contribution in full on or before 31 December 2050.

The capital contribution will be financed by the self-raised funds of Tianjin Qianda.

Corporate Governance

The board of directors of the JV Company shall comprise five directors, of which three directors shall be appointed by Tianjin Qianda and two directors shall be appointed by Fosun Trade. The chairman of the board shall be a director appointed by Tianjin Qianda.

The JV Company shall have two supervisors and each of Tianjin Qianda and Fosun Trade is entitled to appoint one supervisor. The general manager of the JV Company shall be nominated by Tianjin Qianda, of whom the appointment and dismissal shall be decided by the board of directors of the JV Company.

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Other Terms

1. 1. The JV Company proposes to mainly engage in the sales, import and export of medical devices, medical consumables and in vitro diagnostic reagents.
   2. Any dispute between the parties shall be resolved through amicable negotiation, otherwise, a legal proceeding shall be brought by each of the parties to the people's court where the plaintiff is located.
   3. The Shareholders Agreement shall become effective upon signing by each of the parties.
2. REASONS AND BENEFITS OF THE SHAREHOLDERS AGREEMENT
   The purpose of entering into the Shareholders Agreement is to coordinate resources of parties through the Formation of JV and expand and strengthen the supply chain platform of medical supplies.
   The Directors (including the independent non-executive Directors) consider that the terms of each of the Shareholders Agreement are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.
   Mr. Chen Qiyu, Mr. Yao Fang, Mr. Xu Xiaoliang, Mr. Gong Ping, Mr. Pan Donghui and Mr. Zhang Houlin, being Directors, abstained from voting on the resolution of the Board in respect of the entering into of the Shareholders Agreement, while the remaining 5 Directors (including 4 independent non-executive Directors) participated in the voting and approved unanimously.
3. INFORMATION OF THE GROUP AND PARTIES The Group
   The Group is a leading healthcare group in the PRC and primarily engaged in business segments including pharmaceutical manufacturing and R&D, medical devices and medical diagnosis, healthcare services as well as pharmaceutical distribution and retail.
   Tianjin Qianda
   Tianjin Qianda is a company incorporated in the PRC with limited liability, and a subsidiary of the Company. It is mainly engaged in, among others, import and export of goods, import and export agency and sales of medical devices.

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Fosun Trade

Fosun Trade is a company incorporated in the PRC with limited liability, and a subsidiary of Fosun High Tech, the controlling shareholder of the Company. It is mainly engaged in, among others, import and export of goods, technology and food.

1. IMPLICATIONS UNDER THE HONG KONG LISTING RULES
   As Fosun Trade is a subsidiary of Fosun High Tech, Fosun Trade constitutes an associate of Fosun High Tech, hence a connected person of the Company under Rule 14A.07 of the Hong Kong Listing Rules. Therefore, the Formation of JV constitutes a connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules. Given that the party to the Shareholders Agreement is the same connected person as the relevant parties to Previous Connected Transactions, the Formation of JV and the Previous Connected Transactions shall be aggregated pursuant to Rule 14A.81 of the Hong Kong Listing Rules. As the percentage ratio applicable to the sum of the Formation of JV and the Previous Connected Transactions is more than 0.1% but less than 5%, the Formation of JV is subject to reporting and announcement requirements but is exempted from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules.
2. DEFINITIONS

In this announcement, the following expressions have the following meaning unless the context otherwise specifies:

"A Share(s)"	the domestic Share(s) of the Company with a nominal value of
	RMB1 each, which are listed on the Shanghai Stock Exchange and
	traded in RMB
"associate"	has the meaning ascribed to it under the Hong Kong Listing Rules
"Board"	the board of Directors
"Chancheng Hospital"	Foshan Chancheng Central Hospital Company Limited* (佛山
	市禪城區中心醫院有限公司), a for-profit medical institution
	established with the approval by the Population, Health and Drug
	Administration of Chancheng District, Foshan* (佛山市禪城區人
	口和衛生藥品監督管理局),a subsidiary of the Company
"Company"	Shanghai Fosun Pharmaceutical (Group) Co., Ltd.* (上海復星醫
	藥（集團）股份有限公司), a joint stock company established in the
	PRC with limited liability, the H Shares and A Shares of which
	are listed and traded on the Main Board of the Hong Kong Stock
	Exchange and the Shanghai Stock Exchange, respectively

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