Stock Code: 833819 Stock Abbreviation: Nutrichem Biological Hosting Broker: Southwest Securities

I. Overview of Related Party Transactions

(1) Overview of related party transactions

This affiliated transaction is an incidental affiliated transaction

On April 20, 2016, Beijing Nutrichem Jiahe Biotechnology Co., Ltd. (hereinafter referred to as the "Company") and Winbond Life and Health Co., Ltd. (hereinafter referred to as "Winbond Health") signed an agreement in Beijing. The underlying asset is a 100% stake in Shandong Fuer Co., Ltd., a company invested by Winbond Health.

(2) Overview of the relationship between related parties

Winbond Health is the controlling shareholder of the company, holding 610,000,000 shares of the company, accounting for 67.78% of the company's total share capital. The issuance of shares to purchase assets constitutes a connected transaction.

(3) Voting and deliberation

The seventh meeting of the first board of directors of the company reviewed this connected transaction. Related directors Jiang Kangwei, Wang Rong, Zhang Songshan and Peng Yunhui abstained from voting on relevant proposals. According to the Articles of Association, if the number of unrelated directors present at the board of directors is less than 3, the matter should be submitted to the general meeting of shareholders for deliberation. The proposal has been submitted to the second extraordinary general meeting of shareholders in 2016 for deliberation. According to the relevant provisions of the "Articles of Association", related party shareholders abstain from voting.

(4) Whether there is any circumstance that requires the approval of the relevant departments for this connected transaction

The related party transaction does not require approval from relevant departments.

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2. Introduction of related parties

(1) Basic information of related parties

Name of related party Domicile Type of enterprise Legal representative

Winbond Health

No. 69, Renhe Xingguang Avenue, Yubei District, Chongqing

Co., Ltd. (listed company)

Zhang Songshan

(2) Associated relationship

Winbond Health is the controlling shareholder of the company, directly holding 610 million shares of the company, accounting for 67.78% of the company's shares; Winbond Health indirectly holds the company through its wholly-owned subsidiary Winbond Huiyi Investment Co., Ltd. The number of shares is 60.970 million shares, accounting for 6.77% of the company's shares. Therefore, the issuance of shares to purchase assets constitutes a connected transaction.

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3. Main Contents of the Transaction Agreement

The target asset purchased by the company this time is 100% equity (hereinafter referred to as the "target asset") of Shandong Fuer Co., Ltd. (hereinafter referred to as "Forer Co., Ltd."), an enterprise invested by Winbond Health. Fuer Co., Ltd. is a limited liability company legally established and validly existing on April 28, 1994, with a registered capital of RMB 226 million. Its main business is the processing, sales and import and export of chemical intermediates.

According to the "Appraisal Report" (Zhuoxin Dahua Ping Bao Zi (2016) No. 2018) issued by Beijing Zhuoxin Dahua Assets Appraisal Co., Ltd. on December 31, 2015 as the base date for the overall asset evaluation of the underlying assets The determined appraised value is used as the pricing basis for the company to purchase the underlying assets, that is, the total transaction price of this acquisition is 1,194.8 million yuan, all of which are paid by issuing shares. The price of issued shares is 5.80 yuan per share, and a total of 206 million shares are issued.

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4. Pricing basis and fairness

(1) Pricing policy and pricing basis

The transaction price is based on the "Appraisal Report" issued by Beijing Zhuoxin Dahua Assets Appraisal Co., Ltd. on December 31, 2015 as the benchmark date for the overall asset evaluation of the underlying assets (Zhuoxin Dahua Pingbao Zi (2016) No. 2018) as the pricing basis, and reached an agreement through negotiation between the two parties, the transaction amount was RMB 1,194,800,000. The transaction is fair and the pricing is fair, and there is no violation of the interests of minority shareholders and the company.

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V. Necessity of the connected transaction and its impact on the company

(1) Necessity and true intention

According to the company's development strategy plan, the purpose of this issuance of shares to purchase assets is mainly to expand the company's business, enhance the company's competitive advantage, and gradually realize the company's strategic development goals.

(2) The impact of this connected transaction on the company

This connected transaction will not have a material adverse impact on the company's financial status and operating results, and there is no situation that damages the interests of the company and all shareholders. From the perspective of long-term development, it is conducive to the improvement of the company's comprehensive strength and will have a positive impact on the company's performance improvement.

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6. File catalogue for reference

(1) "Resolution of the Seventh Meeting of the First Board of Directors of Beijing Nutrichem Jiahe Biotechnology Co., Ltd.";

(2) "Beijing Nutrichem Jiahe Biotechnology Co., Ltd. to issue shares to shareholders of Shandong Fuer Co., Ltd. to purchase assets agreement";

(3) "Profit Compensation Agreement for Asset Purchase Agreement by Beijing Nutrichem Jiahe Biotechnology Co., Ltd. to Shareholders of Shandong Fore Co., Ltd.".

(4) "Shandong Fuer Co., Ltd. 2015 Annual Audit Report" (Chuanhua Xinshen (2016) No. 019-03).

(V) "Evaluation Report on All Shareholders' Equity of Shandong Forer Co., Ltd. involved in the proposed non-public offering of shares by Beijing Nutrichem Jiahe Biotechnology Co., Ltd. to acquire 100% equity of Shandong Forer Co., Ltd." (Zhuoxin Dahua Review Report Word (2016) No. 2018).

Beijing Nutrichem Jiahe Biotechnology Co., Ltd.

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  Board of Directors

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April 22, 2016