CONNECTED TRANSACTION INVESTMENT IN SINOPHARM HEALTHCARE FUND L.P.

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement (1) 13.52, note A CONNECTED TRANSACTION INVESTMENT IN SINOPHARM HEALTHCARE FUND L.P. INVESTMENT IN THE FUND The Board is pleased to announce that on 24 June 2015 (after trading hours), the Company through Kingworld Medicines, a wholly-owned subsidiary of the Company, entered into the Partnership Agreement with the General Partner. Pursuant to the Partnership Agreement, Kingworld Medicines has committed to invest US$5 million (equivalent to approximately HK$38.9 million) to subscribe approximately 3.33% of the aggregate initial Limited Partners interest of the Fund. IMPLICATIONS UNDER THE LISTING RULES As at the date of this announcement, the Fund holds approximately 9.99% of the total issued share capital of the Company. Although the Fund is not a substantial shareholder of the Company under the Listing Rules, given its relationship with the Company, the Company is willing to follow the relevant connected transaction requirements pursuant to Chapter 14A of the Listing Rules. As all the applicable percentage ratios for the transaction contemplated under the Partnership Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Partnership Agreement constitutes a connected transaction of the Company and is subject to reporting and announcement requirements but exempted from independent shareholders approval requirement pursuant to Chapter 14A of the Listing Rules. 1

2 Given that Mr. Zhang Yi is the non-executive Director and is also an initial key person of the General Partner, Mr. Zhang has abstained from voting at the Board meeting to approve the Partnership Agreement to invest in the Fund due to his interest in the Company and the Fund and the material interest in this transaction. INTRODUCTION The Board is pleased to announce that on 24 June 2015 (after trading hours), the Company through Kingworld Medicines, a wholly-owned subsidiary of the Company, entered into the Partnership Agreement with the General Partner. Pursuant to the Partnership Agreement, Kingworld Medicines has committed to invest US$5 million (equivalent to approximately HK$38.9 million) to subscribe approximately 3.33% of the aggregate initial Limited Partners interest of the Fund. THE PARTNERSHIP AGREEMENT Date: 24 June 2015 Parties: 1. Sinopharm Capital Limited (as General Partner); and 14.60(1) 14.58(3) 2. Kingworld Medicines Health Management Limited (as Limited Partner). INFORMATION OF THE FUND The Fund has been established in the Cayman Islands as an exempted limited partnership with the primary objective of investing in public and private companies in the healthcare industry, including but not limited to pharmaceutical manufacturing, medical equipment, medical research, healthcare service, medical service and healthcare, that are organized and/or operating in the PRC, Taiwan and Hong Kong ( Greater China ), or with a significant nexus to Greater China (2) SCALE OF THE FUND The preliminary scale of the Fund is approximately US$150 million (equivalent to approximately HK$1,167 million) based on the total Capital Commitment from the Limited Partners and the maximum Capital Commitment may not exceed US$180 million (equivalent to approximately HK$1,400.4 million) that the General Partner is targeting pursuant to the Partnership Agreement, and the final number will be subject to the total actually paid capital contributions (6) 2

3 CAPITAL CONTRIBUTION Pursuant to the Partnership Agreement, Kingworld Medicines will contribute the Capital Commitment in the amount of US$5 million (equivalent to approximately HK$38.9 million), accounting for approximately 3.33% of the aggregate initial Limited Partners interest of the Fund (2) 14.58(4) Each Limited Partner shall make an initial capital contribution in the amount up to 40% of its Capital Commitment which should be immediately due and payable upon five business days capital call notice. The remaining unfunded Capital Commitment shall be contributed as requested by the General Partner upon ten business days prior written notice based on needs for investments. The capital contribution to the Fund was determined after arms length negotiation between the General Partner and the Limited Partners with reference to the capital requirement of Fund. The Company intends to fund the capital contribution to be made by Kingworld Medicines from internal resources of the Group (5) TERM OF THE FUND The term of the Fund commenced on 9 October 2014 and shall continue until the seventh anniversary of the date of the Partnership Agreement, including the first four years as investment period (the Investment Period ) and the last three years as the management and exit period (the Management and Exit Period ). TRANSFER RESTRICTION OF THE FUND No Limited Partner shall sell, assign, pledge, mortgage, or otherwise dispose of or transfer its interest in the Fund, directly or indirectly, without the prior written consent of the General Partner, which consent may be granted or denied in the sole discretion of the General Partner. The General Partner shall not sell, assign, mortgage, pledge or otherwise dispose of its interest in the Fund without the prior written consent of two-thirds in interest in the Fund of the Limited Partners. MANAGEMENT OF THE FUND Sinopharm Capital Limited, as the General Partner of the Fund, shall have the sole and exclusive right to manage, control, and conduct the affairs of the Fund and act on behalf of the Fund, including exercise of rights to elect to adjust the tax basis of Fund assets and to revoke or make such other elections as it deems appropriate. The General Partner is also authorized to engage one or more of its affiliates for the 3

4 provision of certain management, administrative, operational and other services with respect to the Fund, provided that the General Partner shall remain ultimately responsible for the overall management of the Fund and for its duties and responsibilities. No Limited Partner shall take part in the control or management of the affairs of the Fund nor shall any Limited Partner have any authority to act for or on behalf of the Fund or to vote on any matter relative to the Fund and its affairs except as are specifically permitted by the Partnership Agreement. MANAGEMENT FEE OF THE FUND During the continuous existence of the Fund, each Partner is required to pay for the management fee. The annual management fee during the Investment Period shall be 2% of the aggregate Capital Commitments of all Partners and the annual management fee during the Management and Exit Period shall be 2% of the investment cost with respect to the investments of the Fund that have not been disposed of. DISTRIBUTION OF THE FUND The Fund will distribute cash proceeds, net of expenses, from disposition of a portfolio investment and distributions of securities in kind, together with any dividends and interests income received. The distributions shall be made: (a) first to all Limited Partners in proportion to their partnership percentage until each Limited Partner has received aggregate distribution equal to the aggregate capital contributions of such limited partner; (b) then to each Limited Partner until each Limited Partner has received a preferred return on amount it has received in paragraph (a) above at the rate of 8% per annum compounded annually from the day following each payment date of such Limited Partner s capital contribution ( Preferred Return ); (c) thereafter, 100% to the General Partner until the General Partner has received an amount equal to 20% of the sum of the amount received by all Partners as the Preferred Return above and distributions made pursuant to this paragraph (c); and 4

5 (d) last, 80% of the balance to all Limited Partners in proportion to their respective partnership percentages and 20% of the same to the General Partner. REASONS FOR AND BENEFITS OF INVESTMENT IN THE FUND The Group is principally engaged in the business of distribution of imported branded pharmaceutical and healthcare products in the PRC (8) 14.58(2) References are made to the announcements of the Company dated 16 September 2014, 7 November 2014, 15 December 2014 and 17 December 2014 in relation to the disposal of 62,187,750 shares of the Company from Golden Land International Limited to Sinopharm Capital Management Company Limited ( Sinopharm Capital ) or its designated party(ies) (the Disposal ) and the announcements of the Company dated 15 September 2014, 9 October 2014, 30 October 2014, 11November 2014, 17 November 2014 and 15 December 2014 respectively, and the circular of the Company dated 14 November 2014 in relation to the issue of the convertible bond in the principal amount of HK$133,837,500 ( Convertible Bond ) to Sinopharm Capital or its designated party(ies) (the Subscription of the Convertible Bond ). Upon completion of the Disposal on 17 December 2014, the Fund, as the designated party of Sinopharm Capital, holds approximately 9.99% of the total issued share capital of the Company. Upon completion of the Subscription of the Convertible Bond on 17 December 2014, the designated parties of Sinopharm Capital hold the Convertible Bond. Sinopharm Capital is a limited liability company incorporated in the PRC, and is an equity investment company jointly established by (China National Pharmaceutical Group Corporation*) ( CNPG ). CNPG is the medical and healthcare industrial platform in the PRC under the administration of the State-owned Assets Supervision and Administration Commission of the State Council of the PRC. As an investment platform of CNPG, Sinopharm Capital assists its investees in becoming a leading and excellent enterprise in the medical and healthcare industry in the PRC through providing various additional services and creating strong complementary effect among industrial resources. For details of Sinopharm Capital and CNPG, please refer to the above announcements and circular (2) 5

6 The Board considers that the investments in the Fund will not only broaden its investment portfolio and thereby widen its income base, but also provide the Group with opportunity to further strengthen the relationship with Fund to explore the market by investing in private and public companies in the medical and healthcare industry. The Group may also explore the potential merger and acquisition opportunities during the process of the Fund s project investment which is in line with the development strategies of the Group so as to increase its competitiveness and profit making ability. The Directors (including the independent non-executive Directors) are of the view that the terms of the Partnership Agreement are formulated pursuant to normal commercial terms and are fair and reasonable and in the interests of the Company and its shareholders as a whole. 14A.68(3) IMPLICATIONS UNDER THE LISTING RULES As at the date of this announcement, the Fund holds approximately 9.99% of the total issued share capital of the Company. Although the Fund is not a substantial shareholder of the Company under the Listing Rules, given its relationship with the Company, the Company is willing to follow the relevant connected transaction requirements pursuant to Chapter 14A of the Listing Rules. As all the applicable percentage ratios for the transaction contemplated under the Partnership Agreement exceed 0.1% but are less than 5%, the transaction contemplated under the Partnership Agreement constitutes a connected transaction of the Company and is subject to reporting and announcement requirements but exempted from independent shareholders approval requirement pursuant to Chapter 14A of the Listing Rules. Given that Mr. Zhang Yi is the non-executive Director and is also an initial key person of the General Partner, Mr. Zhang has abstained from voting at the Board meeting to approve the Partnership Agreement to invest in the Fund due to his interest in the Company and the Fund and the material interest in this transaction. Except for Mr. Zhang, no other directors hold material interests in the transaction contemplated under the Partnership Agreement. Accordingly, no directors (except for Mr. Zhang) are required to abstain from voting at the Board meeting to approve the transaction of investment in the Fund under the Partnership Agreement (3) 14A.68(2) 14A.68(9) 14A.68(8) 6

7 DEFINITIONS In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: Board Kingworld Medicines Capital Commitment the board of Directors Kingworld Medicines Health Management Limited, a company incorporated in the British Virgin Islands with limited liability, a wholly-owned subsidiary of the Company means the amount the a Partner has agreed to contribute to the capital of the Fund Company Kingworld Medicines Group Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange connected person(s) Director(s) Fund or Partnership has the meaning ascribed thereto under the Listing Rules the director(s) of the Company Sinopharm Healthcare Fund L.P., an exempted limited partnership established and registered under the laws of the Cayman Islands General Partner Sinopharm Capital Limited, an exempted company incorporated in the Cayman Islands with limited liability and who or its agents or delegates shall have full power and authority on behalf and in the name of the Fund to carry out any and all of the objectives and purposes of the Fund and to perform all acts which it may in its discretion 14.58(2) Group Hong Kong Limited Partner(s) Listing Rules the Company and its subsidiaries The Hong Kong Special Administrative Region of the PRC the limited partner(s) of the Fund the Rules Governing the Listing of Securities on the Stock Exchange 7

8 Partner(s) Partnership Agreement PRC Stock Exchange HK$ US$ the General Partner and/or the Limited Partner(s) an amended and restated exempted limited partnership agreement dated 24 June 2015 and entered into between the General Partner and Kingworld Medicines which amends and restates the terms and conditions of an initial exempted limited partnership agreement dated 9 October 2014 and entered into between the General Partner and the initial limited partner(s) in relation to the establishment and management of the Fund and as amended, restated or modified from time to time the People s Republic of China, for the purpose of this announcement, excluding Taiwan, Hong Kong and the Macau Special Administrative Region of the PRC The Stock Exchange of Hong Kong Limited Hong Kong dollar, the lawful currency of Hong Kong United States dollar, the lawful currency of the United States of America % per cent. In this announcement, amounts denominated in US$ have been converted into HK$ at the rate of US$1 = HK$7.78 for the purpose of illustration. Hong Kong, 24 June 2015 By Order of the Board Kingworld Medicines Group Limited Zhao Li Sheng Chairman As at the date of this announcement, the executive Directors are Mr. Zhao Li Sheng, Ms. Chan Lok San, Mr. Zhou Xuhua and Mr. Lin Yusheng, the non-executive Director is Mr. Zhang Yi and the independent non-executive Directors are Mr. Duan Jidong, Mr.Zhang Jianbin and Mr. Wong Cheuk Lam