Shanghai Fosun Pharmaceutical : DISCLOSEABLE AND CONNECTED TRANSACTION ENTERING INTO THE AMENDMENT NO. 1 TO THE A&R SHAREHOLDERS AGREEMENT REGARDING GLAND PHARMA LIMITED (H SHARES)

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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)

DISCLOSEABLE AND CONNECTED TRANSACTION

ENTERING INTO THE AMENDMENT NO. 1 TO THE A&R SHAREHOLDERS

AGREEMENT REGARDING GLAND PHARMA LIMITED

References are made to the joint announcements dated 28 July 2016, 24 April 2017, 27 July 2017, 17 September 2017 and 3 October 2017 of Fosun Pharma and Fosun International, the controlling shareholder of Fosun Pharma, the announcements of Fosun Pharma dated 4 August 2016, 30 March 2017 and 1 August 2017, the circular of Fosun Pharma dated 11 August 2016 and the poll results announcement of Fosun Pharma dated 29 September 2016 in connection with, among other things, acquiring the controlling interest in Gland Pharma and the grant of the Original Put Option.

ENTERING INTO THE AMENDMENT NO. 1

On 15 September 2017, Fosun Industrial, the Continuing Shareholders and Gland Pharma entered into the A&R Shareholders Agreement pursuant to which, among other things, the Continuing Shareholders were granted the Original Put Option to require, within 1 year from the expiration of the period of 1 year after the completion of the acquisition of controlling interest in Gland Pharma, Fosun Industrial to acquire the remaining shares in Gland Pharma held by the Continuing Shareholders. Fosun Industrial has the right to decide whether to grant a new put option to the Continuing Shareholders before the expiration of 1 year after the completion of the acquisition of controlling interest in Gland Pharma.

Fosun Industrial decided to grant the Amended Put Option to the Continuing Shareholders. Accordingly, on 24 January 2019, Fosun Industrial, the Continuing Shareholders and Gland Pharma entered into the Amendment No. 1 in relation to the proposed amendments to terms and conditions of the Original Put Option granted to the Continuing Shareholders, subject to the approval of the shareholders pursuant to the relevant PRC laws and regulations.

HONG KONG LISTING RULES IMPLICATIONS

As at the date of this announcement, Gland Pharma is an indirect subsidiary owned as to approximately 74% by the Company through its subsidiary. The Continuing Shareholders are substantial shareholders of Gland Pharma, and thus, are connected persons of the Company at the subsidiary level under Rule 14A.06(9) of the Hong Kong Listing Rules. As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Hong Kong Listing Rules) of the transactions under the Amendment No. 1 exceeds 5% but are all less than 25%, the transactions contemplated under the Amendment No. 1 constitute discloseable and connected transactions under Chapter 14 and Chapter 14A of the Hong Kong Listing Rules.

As (i) the Board has approved the Amendment No. 1; and (ii) the independent non-executive directors have confirmed that the terms of the Amendment No. 1 are fair and reasonable, on normal commercial terms and in the interests of the Company and its shareholders as a whole, the entering into the Amendment No. 1 is subject to the reporting and announcement requirements, but are exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.101 of the Hong Kong Listing Rules.

However, the Amendment No. 1 shall be subject to approval by the shareholders of the Company pursuant to the relevant PRC laws and regulations. The Company proposes to convene an extraordinary general meeting to seek approval from the shareholders to approve the Amendment No. 1. A circular containing the details of the Amendment No. 1 will be despatched to the shareholders of the Company.

References are made to the joint announcements dated 28 July 2016, 24 April 2017, 27 July 2017, 17 September 2017 and 3 October 2017 of Fosun Pharma and Fosun International, the controlling shareholder of Fosun Pharma, the announcements of Fosun Pharma dated 4 August 2016, 30 March 2017 and 1 August 2017, the circular of Fosun Pharma dated 11 August 2016 and the poll results announcement of Fosun Pharma dated 29 September 2016 in connection with, among other things, acquiring the controlling interest in Gland Pharma and the grant of the Original Put Option.

ENTERING INTO AMENDMENT NO. 1

On 15 September 2017, Fosun Industrial, the Continuing Shareholder and Gland Pharma entered into the A&R Shareholders Agreement pursuant to which, among other things, the Continuing Shareholders were granted the Original Put Option to require, within 1 year from the expiration of the period of 1 year after the completion of the acquisition of controlling interest in Gland Pharma, Fosun Industrial to acquire the remaining shares in Gland Pharma held by the Continuing Shareholders. Fosun Industrial has the right to decide whether to grant the Amended Put Option to the Continuing Shareholders before the expiration of 1 year after the completion of the acquisition of controlling interest in Gland Pharma.

Fosun Industrial decided to grant the Amended Put Option to the Continuing Shareholders. Accordingly, on 24 January 2019, Fosun Industrial, the Continuing Shareholders and Gland Pharma entered into the Amendment No. 1 in relation to the proposed amendments to terms and conditions of the Original Put Option granted to the Continuing Shareholders, subject to the approval of the shareholders pursuant to the relevant PRC laws and regulations. The principal terms of the Amendment No. 1 are as set out below.

Date

24 January 2019

Parties

• (i) Fosun Industrial;

• (ii) the Continuing Shareholders; and

• (iii) Gland Pharma.

Major Terms

Pursuant to the Amendment No. 1, Fosun Industrial has agreed to grant the Amended Put Option to the Continuing Shareholders, where the Continuing Shareholders shall have the right to exercise the Amended Put Option within 1 year after the expiration of the Initial Waiting Period to require Fosun Industrial (or its designated party) to acquire the Put Shares at the fair market value. If Gland Pharma completes the initial public offering within the Initial Waiting Period, the Amended Put Option shall automatically lapse. Prior to the expiration of the Initial Waiting Period, Fosun Industrial shall have the right to decide whether to grant another option to the Continuing Shareholders, pursuant to which the Continuing Shareholders shall have the right to exercise such option within 1 year after the expiration of the Second Waiting Period to require Fosun Industrial to acquire the Put Shares at the fair market value in the event that Gland Pharma fails to complete the initial public offering within the Second Waiting Period. The Amended Put Option shall lapse if another option is granted. If Gland Pharma completes the initial public offering within the Second Waiting Period, such further option granted shall automatically lapse.

If the Continuing Shareholders exercise the put option under the Amendment No. 1, then the shareholders holding a total of 600,000 shares in Gland Pharma shall have the right to require to sell the shares under the tag-along rights in accordance with their tag-along agreements with the Continuing Shareholders.

Exercise Price

The enterprise value used to determine the fair market value of the Put Shares under the Amended Put Option shall not be (i) less than 16 times of the EBITDA of Gland Pharma for the calendar year 2018; and (ii) more than 20 times of the EBITDA of Gland Pharma for the calendar year 2018; provided that, in any circumstances whatsoever, the aggregate consideration payable by Fosun Industrial for acquiring the relevant shares under the Amended Put Option shall not exceed US$470 million.

Effective Date

The Amendment No. 1 shall become effective from the date of execution. If the entering into of the Amendment No. 1 is not approved by the shareholders of the Company, the Amendment No. 1 shall be terminated unless the parties thereto otherwise agree in writing.

GENERAL INFORMATION

Gland Pharma

Gland Pharma is a company incorporated in 1978, with its headquarters based in Hyderabad, India, and is principally engaged in the manufacture of injectable drugs.

According to the unaudited financial report of Gland Pharma (prepared in accordance with the China Accounting Standards for Business Enterprises), as at 31 December 2018, the total assets of Gland Pharma was RMB3,234 million. The below sets out the net profit (before tax and after tax) of Gland Pharma for two financial years before the execution date of the Amendment No.1 (i.e. for the two financial years ended 31 December 2018 prepared in accordance with China Accounting Standards for Business Enterprises immediately):

Unit: RMB million

For the year ended

31 December 2017 2018 (audited) (unaudited)

Net profit (before tax)	494	644
Net profit (after tax)	330	425
Continuing Shareholders

The Continuing Shareholders mainly comprise the family members of Dr. Ravi and the companies and trusts controlled and managed thereby. As at the date of this announcement, the Continuing Shareholders held a total of 3,421,187 shares in Gland Pharma, representing approximately 22.08% of the total issued shares in Gland Pharma.

Fosun Industrial

Fosun Industrial is a company incorporated under the laws of Singapore, which is an indirect wholly-owned subsidiary of Fosun Pharma.

REASONS FOR AND BENEFITS OF ENTERING INTO THE AMENDMENT NO. 1

The entering into of the Amendment No. 1 is to further facilitate the subsequent development of Gland Pharma and fully reflect the enterprise value, and to update the Original Put Option in accordance with the arrangement in respect of the acquisition of Gland Pharma as well as the operations and the latest valuation of Gland Pharma, in order to provide an objective reflection of the current state of operations and market value of Gland Pharma. In the event of the Amended Put Option has been exercised and the transfer has been completed, the Group will further increase its shareholding in Gland Pharma.

Directors (including the independent non-executive directors) of the Company consider that the Amendment No. 1 is on normal commercial terms and that the terms are fair and reasonable and in the interests of the Company and the shareholders of the Company as a whole.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Gland Pharma is an indirect subsidiary owned as to approximately 74% by the Company through its subsidiary. The Continuing Shareholders are substantial shareholders of Gland Pharma, and thus, are connected persons of the Company at the subsidiary level under Rule 14A.06(9) of the Hong Kong Listing Rules. As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Hong Kong Listing Rules) of the transaction under the Amendment No. 1 exceeds 5% but are all less than 25%, the transactions contemplated under the Amendment No. 1 constitutes discloseable and connected transactions under Chapter 14 and Chapter 14A of the Hong Kong Listing Rules.

As (i) the Board has approved the Amendment No. 1; and (ii) the independent non-executive Directors have confirmed that the terms of the Amendment No. 1 are fair and reasonable, on normal commercial terms and in the interests of the Company and its shareholders as a whole, the entering into the Amendment No. 1 is subject to the reporting and announcement requirements, but are exempt from the circular, independent financial advice and shareholders' approval requirements under Rule 14A.101 of the Hong Kong Listing Rules.

However, the Amendment No. 1 shall be subject to approval by the shareholders of the Company pursuant to the relevant PRC laws and regulations. The Company proposes to convene an extraordinary general meeting to seek approval from the shareholders to approve the Amendment No. 1. A circular containing the details of the Amendment No. 1 will be despatched to the shareholders of the Company.