Yashili International : Announcements and Notices - Revision of Cap of Continuing Connected Transactions

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Yashili International Holdings Ltd

雅 士 利 國 際 控 股 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1230)

REVISION OF CAP OF CONTINUING CONNECTED TRANSACTIONS

Reference is made to the Announcements.

Due to the Company's expanded participation in the RSA Scheme and the Share Option Scheme, the Board would like to adjust upward the Existing Annual Cap of the Settlement Agreements for the year ending 31 December 2019 to the Revised Annual Cap.

As of the date of this announcement, Mengniu International, a subsidiary of Mengniu Dairy, holds 51.04% of the shares of the Company and is a substantial shareholder of the Company. Inner Mongolia Mengniu is a subsidiary of Mengniu Dairy. Therefore, each of Mengniu Dairy and Inner Mongolia Mengniu is a connected person of the Company. Accordingly, the transactions contemplated under the Settlement Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (other than profits ratio) in respect of the Revised Annual Cap of the Settlement Agreements on an aggregated basis for the year ending 31 December 2019 exceeds 0.1% but is less than 5%, the transactions contemplated under the Settlement Agreements are subject to the reporting, announcement and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the Announcements.

REVISION OF EXISTING ANNUAL CAP TO REVISED ANNUAL CAP

Due to the Company's expanded participation in the RSA Scheme and the Share Option Scheme, the Board would like to adjust upward the annual cap of the Settlement Agreements for the year ending 31 December 2019 from the Existing Annual Cap of RMB20 million to the Revised Annual Cap of RMB30 million.

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The Revised Annual Cap is determined after having taken into account: (i) the number of Restricted Shares and Options granted to the Yashili RSA Scheme Participants and the Yashili Share Option Scheme Participants, respectively; (ii) the number of Yashili RSA Scheme Participants and Yashili Share Option Scheme Participants; (iii) the value of each Option; and (iv) the performance of the stock price of Mengniu Dairy.

As at the date of this announcement, based on the Group's latest unaudited management accounts and operational data, the actual transaction amount of the Settlement Agreements on an aggregated basis for the year ending 31 December 2019 has not exceeded the Existing Annual Cap as disclosed in the Announcements.

Save for the revision of the Existing Annual Cap to the Revised Annual Cap, all the other terms of the Settlement Agreements as disclosed in the Announcements remain unchanged.

The Directors (including the independent non-executive Directors) are of the view that the Settlement Agreements have been conducted and will continue to be conducted on arm's length basis and on normal commercial terms in the ordinary and usual course of business of the Company and that the terms of the Settlement Agreements and the Revised Annual Cap are fair and reasonable and the Settlement Agreements are in the interest of the Company and its shareholders as a whole.

LISTING RULES IMPLICATIONS

As of the date of this announcement, Mengniu International, a subsidiary of Mengniu Dairy, holds 51.04% of the shares of the Company and is a substantial shareholder of the Company. Inner Mongolia Mengniu is a subsidiary of Mengniu Dairy. Therefore, each of Mengniu Dairy and Inner Mongolia Mengniu is a connected person of the Company. Accordingly, the transactions contemplated under the Settlement Agreements constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (other than profits ratio) in respect of the Revised Annual Cap of the Settlement Agreements on an aggregated basis for the year ending 31 December 2019 exceeds 0.1% but is less than 5%, the transactions contemplated under the Settlement Agreements are subject to the reporting, announcement and annual review requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

Mr. Jeffrey, Minfang Lu is an executive director and chief executive officer of Mengniu Dairy. Mr. Zhang Ping is the chief financial officer of Mengniu Dairy. Mr. Chopin Zhang is one of the Yashili RSA Scheme Participants and one of the Yashili Share Option Scheme Participants and was granted Restricted Shares and Options to which the Settlement Agreements are relating to. Accordingly, each of Mr. Jeffrey, Minfang Lu, Mr. Zhang Ping and Mr. Chopin Zhang is considered to have a material interest in the Settlement Agreements and the transactions contemplated thereunder. As such, each of Mr. Jeffrey, Minfang Lu, Mr. Zhang Ping and Mr. Chopin Zhang has abstained from voting on the relevant board resolutions approving the Revised Annual Cap.

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DEFINITIONS
''Announcements''	(i) the announcement dated 7 May 2018 issued by Mengniu Dairy in
	relation to the grant of Restricted Shares under the RSA Scheme and
	the grant of Options under the Share Option Scheme, (ii) the
	announcement dated 2 July 2018 issued by the Company in relation to
	the Settlement Agreements, and (iii) the announcement dated 31 May
	2019 issued by the Company in relation to the update on the
	Settlement Agreements
''Board''	the board of Directors
''Company''	Yashili International Holdings Ltd, a company listed on the Main
	Board of the Stock Exchange (stock code: 1230)
''connected person''	has the meaning ascribed to it under the Listing Rules
''Directors''	the directors of the Company
''Existing Annual Cap''	the existing annual cap of the Settlement Agreements on an aggregated
	basis for the year ending 31 December 2019, being RMB20 million
''Group''	the Company and its subsidiaries
''Hong Kong''	Hong Kong Special Administrative Region of the PRC
''Inner Mongolia Mengniu''	Inner Mongolia Mengniu Dairy (Group) Co., Ltd.* (內蒙古蒙牛乳
	業(集團)股份有限公司), a company established in the PRC and a
	subsidiary of Mengniu Dairy
''Listing Rules''	the Rules Governing the Listing of Securities on the Stock Exchange
''Mengniu Dairy''	China Mengniu Dairy Company Limited, a company listed on the Main
	Board of the Stock Exchange (stock code: 2319)
''Mengniu International''	China Mengniu International Company Limited, a company
	incorporated in the British Virgin Islands and a subsidiary of Mengniu
	Dairy. As at the date of this announcement, it is a substantial
	shareholder of the Company, holding approximately 51.04% of the
	issued share capital of the Company

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''Option(s)''

''PRC''

''Restricted Share(s)''

''Revised Annual Cap''

''RMB''

''RSA Scheme''

''Settlement Agreement in Relation to the Consideration for Options''

the share options granted to eligible grantees under the Share Option Scheme

the People's Republic of China

the shares of Mengniu Dairy granted under the RSA Scheme

the revised annual cap of the Settlement Agreements on an aggregated basis for the year ending 31 December 2019, being RMB30 million

Renminbi, the lawful currency of the PRC

the restricted share award scheme adopted by Mengniu Dairy on 26 March 2013

the settlement agreement in relation to the consideration of Options dated 29 June 2018 between the Company and Mengniu Dairy in respect of the settlement between the Company and Mengniu Dairy of the consideration of the Options granted to the Yashili Share Option Scheme Participants under the Share Option Scheme

''Settlement Agreement in Relation to the Consideration for Restricted Shares''

the settlement agreement in relation to the consideration of Restricted Shares dated 29 June 2018 between the Company and Inner Mongolia Mengniu in respect of the settlement between the Company and Inner Mongolia Mengniu of the consideration of the Restricted Shares granted to the Yashili RSA Scheme Participants under the RSA Scheme

''Settlement Agreements''	collectively, the Settlement Agreement in Relation to the Consideration
	for Restricted Shares and the Settlement Agreement in Relation to the
	Consideration for Options
''Share Option Scheme''	the share option scheme adopted by Mengniu Dairy on 3 June 2016
''Stock Exchange''	The Stock Exchange of Hong Kong Limited
''Yashili RSA Scheme	certain employees of the Group selected to participate in the RSA
Participants''	Scheme

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''Yashili Share Option	certain employees of the Group selected to participate in the Share
Scheme Participants''	Option Scheme
''%''	per cent

• English names of the PRC entities are literal translation of their Chinese names and are included for identification purpose only.

By order of the Board

Yashili International Holdings Ltd

雅士利國際控股有限公司

Kwok Wai Cheong, Chris

Company Secretary

Hong Kong, 30 August 2019

As at the date of this announcement, the Board comprises: Mr. Jeffrey, Minfang Lu (Chairman), Mr. Qin Peng, Mr. Zhang Ping and Mr. Gu Peiji (alias Philip Gu) as non-executive directors; Mr. Chopin Zhang as executive director; and Mr. Mok Wai Bun Ben, Mr. Cheng Shoutai and Mr. Lee Kong Wai Conway as independent non-executive directors.

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