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.

Yashili International Holdings Ltd

(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 1230)

CONTINUING CONNECTED TRANSACTION

STRATEGIC COOPERATION SUPPLY AGREEMENT
WITH MEMBERS OF THE DANONE GROUP

THE STRATEGIC COOPERATION SUPPLY AGREEMENT

On 4 November 2016, Yashili New Zealand, a subsidiary of the Company, entered into the Strategic
Cooperation Supply Agreement with the Purchasers, each a subsidiary of Danone SA and a member
of the Danone Group, pursuant to which Yashili New Zealand agreed to sell and the Purchasers (on
behalf of themselves and their Affiliates) agreed to purchase Base Powder Products and Dairy
Ingredients during the term of the Strategic Cooperation Supply Agreement.

LISTING RULES IMPLICATIONS

As of the date of this announcement, Danone Asia has a 25.0% shareholding interest in the
Company. Each of the Purchasers is a subsidiary of Danone SA and a member of the Danone Group.
Therefore, each of the Purchasers is a connected person of the Company under the Listing Rules. As
Yashili New Zealand is an indirect wholly-owned subsidiary of the Company, the Strategic
Cooperation Supply Agreement and the transactions contemplated thereunder constitute continuing
connected transactions of the Company under Chapter 14A of the Listing Rules. As the highest
applicable percentage ratio (as defined under the Listing Rules) in respect of the Strategic
Cooperation Supply Agreement is more than 5%, the Strategic Cooperation Supply Agreement and
the transactions contemplated thereunder are subject to the independent shareholders approval,
reporting, annual review and announcement requirements under Chapter 14A of the Listing Rules.

1
 GENERAL

The EGM will be convened by the Company during which an ordinary resolution will be proposed to
the independent Shareholders to approve the Strategic Cooperation Supply Agreement and the
transactions contemplated thereunder. To the best of the Directors knowledge, information and
belief, having made all reasonable enquiry, other than Danone Asia and its associates, no other
Shareholder will be required to abstain from voting on the resolution approving the Strategic
Cooperation Supply Agreement at the EGM.

A circular containing, among others, details of the Strategic Cooperation Supply Agreement, the
advice from the independent board committee of the Company and the advice from the independent
financial adviser of the Company to the independent board committee and independent Shareholders
of the Company, together with the notice convening the EGM, is expected to be despatched to the
Shareholders on or before 25 November 2016.

THE STRATEGIC COOPERATION SUPPLY AGREEMENT

Reference is made to the announcement of the Company dated 19 August 2016 in relation to, among
other things, the sale and purchase of Base Powder Products between Yashili New Zealand (a
subsidiary of the Company) and DAPH (a subsidiary of Danone SA and a member of the Danone
Group) under the Purchase Contract. As contemplated in the Purchase Contract, on 4 November 2016,
Yashili New Zealand entered into the Strategic Cooperation Supply Agreement with the Purchasers,
each a subsidiary of Danone SA and a member of the Danone Group, pursuant to which Yashili New
Zealand agreed to sell and the Purchasers (on behalf of themselves and their Affiliates) agreed to
purchase Base Powder Products and Dairy Ingredients during the term of the Strategic Cooperation
Supply Agreement. Principal terms of the Strategic Cooperation Supply Agreement are summarized
below.

Date

4 November 2016

Parties

(1) Yashili New Zealand as seller; and

(2) the Purchasers (on behalf of themselves and their Affiliates) as purchasers

Nature of Transaction

Sale and purchase of Base Powder Products and Dairy Ingredients. The exact products and volume of
Base Powder Products and Dairy Ingredients to be supplied by Yashili New Zealand to the Purchasers
and their Affiliates and the dates of delivery will be specified in individual purchase orders.

2
Effective Date

The Strategic Cooperation Supply Agreement shall take effect upon (i) the approval of the independent
Shareholders of the Strategic Cooperation Supply Agreement and the transactions contemplated
hereunder at the EGM, and (ii) consultation with the Purchasers shareholders.

Term

The Strategic Cooperation Supply Agreement shall be effective from the Effective Date and up to 31
December 2018 (the Initial Term). The term of the Strategic Cooperation Supply Agreement shall
be extended for one year upon the expiry of the Initial Term unless any party gives notice to refuse to
extend the term of the Strategic Cooperation Supply Agreement beyond the Initial Term at least six
months prior to the expiry of the Initial Term.

The Board will consider whether to extend the term of the Strategic Cooperation Supply Agreement in
due course based on the business need of the Company. In the event that the term of the Strategic
Cooperation Supply Agreement will be extended beyond the Initial Term, the Company will re-comply
with all applicable requirements under the Listing Rules.

Pricing Terms

The price of the Base Powder Products and Dairy Ingredients supplied by Yashili New Zealand to the
Purchasers and their Affiliates pursuant to the Strategic Cooperation Supply Agreement will be
specified in individual purchase orders and shall be determined on a cost plus basis with reference to
the applicable Incoterms and payment terms, which is consistent with market practice. The prices for
the Base Powder Products and Dairy Ingredients may be revised upon mutual agreement between
Yashili New Zealand and the Purchasers every calendar trimester.

The pricing terms of the Strategic Cooperation Supply Agreement were determined in the ordinary
course of business on normal commercial terms, negotiated on an arms length basis and are not more
favourable to the Purchasers than those offered by the Company to independent third parties.

Payment Terms

Payment shall be made by the Purchasers in New Zealand dollars by wire transfer or any other means
of payment acceptable to Yashili New Zealand and the Purchasers within 90 days from the date of the
relevant invoice.

3
Annual Caps

As disclosed in the announcement of the Company dated 19 August 2016, if the parties to the Purchase
Contract enter into a strategic cooperation supply agreement before 31 December 2016, the strategic
cooperation supply agreement shall supersede the Purchase Contract, and all the purchase orders still
performing under the Purchase Contract shall be automatically be subject to the strategic cooperation
supply agreement. As such, upon the taking effect of the Strategic Cooperation Supply Agreement, the
Purchase Contract will terminate automatically, and all the purchase orders under the Purchase Contract
will be automatically be subject to the Strategic Cooperation Supply Agreement.

The annual cap in respect of the aggregate consideration of the transactions contemplated under the
Strategic Cooperation Supply Agreement for the period from the Effective Date to 31 December 2016
(taking into account all the purchase orders still performing under the Purchase Contract) shall be
RMB70,000,000 (equivalent to approximately HK$80,304,800). The annual cap in respect of the
aggregate consideration of the transactions contemplated under the Strategic Cooperation Supply
Agreement for the year ending 31 December 2017 and the year ending 31 December 2018 shall be
RMB350,000,000 (equivalent to approximately HK$401,524,000).

The above annual caps were determined after taking into account (a) the expected unit price of Base
Powder Products and Dairy Ingredients; and (b) the expected volume of Base Powder Products and
Dairy Ingredients supplied by Yashili New Zealand to the Purchasers and their Affiliates during the
term of the Strategic Cooperation Supply Agreement and the Purchase Contract.

INFORMATION ON THE COMPANY, YASHILI NEW ZEALAND AND THE PURCHASERS

The Company is an investment holding company, which, along with its subsidiaries, is primarily
engaged in the manufacturing and sale of dairy and nourishment products. It operates in the following
segments in the PRC: (i) Yashili pediatric milk formula products segment; (ii) Scient pediatric milk
formula products segment; (iii) Oushi, Arla and Dumex products segment; (iv) nutrition products
segment and (v) other segments, including the production and sale of packing materials and sale of
surplus raw materials. The Company is a leading player in the PRCs paediatric milk formula industry
and also has a leading position in the soymilk powder market in the PRC.

Yashili New Zealand is a company incorporated in New Zealand and an indirect wholly-owned
subsidiary of the Company. It is principally engaged in the production and sale of dairy products.

DAPH is a company incorporated in Singapore and an indirect subsidiary of Danone SA. It is primarily
engaged in holding activities and trading of early life nutrition related products.

Danone Trading is a company incorporated under the laws of Netherlands and an indirect subsidiary of
Danone SA. It is primarily engaged in trading in early life nutrition finished goods and related products
and providing services to other companies.

4
REASONS FOR AND BENEFITS OF THE STRATEGIC COOPERATION SUPPLY
AGREEMENT

The Directors (excluding the independent non-executive Directors (whose views will be set out in the
letter from the independent board committee to be included in the circular to be despatched to the
Shareholders)) are of the view that the Strategic Cooperation Supply Agreement and the transactions
contemplated thereunder would enable Yashili New Zealand to improve its utilisation rate, thereby
achieving greater synergies between the Group and the Danone Group.

The Directors (excluding the independent non-executive Directors (whose views will be set out in the
letter from the independent board committee to be included in the circular to be despatched to the
Shareholders)) are of the view that the Strategic Cooperation Supply Agreement and the transactions
contemplated thereunder (including the proposed annual caps) are conducted on arms length basis and
on normal commercial terms in the ordinary and usual course of business of the Company, and that the
terms of the Strategic Cooperation Supply Agreement and the proposed annual caps are fair and
reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As of the date of this announcement, Danone Asia has a 25.0% shareholding interest in the Company.
Each of the Purchasers is a subsidiary of Danone SA and a member of the Danone Group. Therefore,
each of the Purchasers is a connected person of the Company under the Listing Rules. As Yashili New
Zealand is an indirect wholly-owned subsidiary of the Company, the Strategic Cooperation Supply
Agreement and the transactions contemplated thereunder constitute continuing connected transactions of
the Company under Chapter 14A of the Listing Rules. As the highest applicable percentage ratio (as
defined under the Listing Rules) in respect of the Strategic Cooperation Supply Agreement is more than
5%, the Strategic Cooperation Supply Agreement and the transactions contemplated thereunder are
subject to the independent shareholders approval, reporting, annual review and announcement
requirements under Chapter 14A of the Listing Rules.

Mr. Jeffrey, Minfang Lu and Mr. Qin Peng are Directors nominated by the Danone Group and therefore
are considered to have a material interest in the Strategic Cooperation Supply Agreement and the
transactions contemplated thereunder. As such, each of Mr. Jeffrey, Minfang Lu and Mr. Qin Peng has
abstained from voting on the board resolution approving the Strategic Cooperation Supply Agreement
and the transactions contemplated thereunder.

GENERAL

The EGM will be convened by the Company during which an ordinary resolution will be proposed to
the independent Shareholders to approve the Strategic Cooperation Supply Agreement and the
transactions contemplated thereunder. To the best of the Directors knowledge, information and belief,
having made all reasonable enquiry, other than Danone Asia and its associates, no other Shareholder
will be required to abstain from voting on the resolution approving the Strategic Cooperation Supply
Agreement at the EGM.

5
The independent board committee comprising all the independent non-executive Directors has been
established to consider the terms of the Strategic Cooperation Supply Agreement, and to advise and
make recommendations to the independent Shareholders as to how to vote at the EGM on the resolution
in relation to the Strategic Cooperation Supply Agreement. No member of the independent board
committee has any material interest in the Strategic Cooperation Supply Agreement and the transactions
contemplated thereunder.

Somerley Capital Limited has been appointed as the independent financial adviser to advise the
independent board committee and independent Shareholders as to whether the terms of the Strategic
Cooperation Supply Agreement are fair and reasonable, and whether the Strategic Cooperation Supply
Agreement and the transactions contemplated thereunder are conducted on normal commercial terms
and in the interests of the Company and the Shareholders as a whole.

A circular containing, among others, details of the Strategic Cooperation Supply Agreement, the advice
from the independent board committee of the Company and the advice from the independent financial
adviser of the Company to the independent board committee and independent Shareholders of the
Company, together with the notice convening the EGM, is expected to be despatched to the
Shareholders on or before 25 November 2016.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the
following meanings:

Affiliate(s) a company of the Danone Early Life Nutrition division that is wholly
or partially owned or controlled by Danone SA

Base Powder Product base powder products for milk based Early Life Nutrition recipes

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

Dairy Ingredients milk powder and whey powder and other mutually agreed dairy
ingredients

Danone Asia Danone Asia Baby Nutrition Pte. Ltd., a company established and
existing under the laws of Singapore, which is an indirect wholly-
owned subsidiary of Danone SA and a substantial Shareholder of the
Company as of the date of this announcement

Danone Group Danone SA, Danone Asia and other companies directly or indirectly
controlled by Danone SA

6
Danone SA Danone SA, a company incorporated under the laws of France and the
ultimate controlling shareholder of Danone Asia

Danone Trading Danone Trading ELN B.V., a company incorporated under the laws of
the Netherlands and an indirect subsidiary of Danone SA

DAPH Danone Asia Pacific Holdings Pte Ltd., a company incorporated in

Singapore and an indirect wholly-owned subsidiary of Danone SA

Directors the directors of the Company

Effective Date the date upon which the Strategic Cooperation Supply Agreement takes
effect pursuant to its terms

EGM the extraordinary general meeting of the Company to be convened to

consider and, if thought fit, to approve the Strategic Cooperation
Supply Agreement and the transactions contemplated thereunder

Group the Company and its subsidiaries

HK$ Hong Kong dollar(s), the lawful currency of Hong Kong Special
Administrative Region of the PRC

Listing Rules the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited

New Zealand dollar(s) New Zealand dollar(s), the lawful currency of New Zealand

PRC the Peoples Republic of China

Purchase Contract the purchase contract dated 17 August 2016 between Yashili New
Zealand and DAPH in respect of the supply of Base Powder Products
by Yashili New Zealand to DAPH

Purchasers DAPH and Danone Trading

RMB Renminbi, the lawful currency of PRC

Shares ordinary share(s) of HK$0.10 each in the issued share capital of the
Company

Shareholders person(s) whose name(s) appear on the register of members of the

Company as registered holder(s) of the Share(s)

7
Strategic Cooperation
Supply Agreement
the strategic cooperation supply agreement dated 4 November 2016
between Yashili New Zealand and the Purchasers (on behalf of
themselves and their Affiliates) in respect of the supply of Base
Powder Products and Dairy Ingredients by Yashili New Zealand to the
Purchasers and their Affiliates

Stock Exchange The Stock Exchange of Hong Kong Limited

Yashili New Zealand Yashili New Zealand Dairy Co., Limited, a company incorporated in
New Zealand and an indirect wholly-owned subsidiary of the Company

% per cent.

This announcement contains translation between RMB and Hong Kong dollars at RMB1.00 to
HK$1.1472. The translation shall not be taken as representation that RMB could actually be converted
into Hong Kong dollars at that rate, or at all.

By order of the board of directors of

Yashili International Holdings Ltd

Jeffrey, Minfang Lu
Chairman

Hong Kong, 4 November 2016

As at the date of this announcement, the board of directors of the Company comprises: Mr. Jeffrey, Minfang Lu
(Chairman), Mr. Qin Peng, Mr. Zhang Ping and Mr. Huang Xiaojun as non-executive directors; Mr. Hua Li as executive
director; and Mr. Mok Wai Bun Ben, Mr. Cheng Shoutai and Mr. Lee Kong Wai Conway as independent non-executive
directors.