China New Consumption Group Limited — Proxy Solicitation & Information Statement 2014

Apr 22, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or other registered dealer in securities, bank manager, solicitor, certified public accountant or other professional advisor.

If you have sold or transferred all your shares in China Shineway Pharmaceutical Group Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 02877)

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES, RE-ELECTION OF RETIRING DIRECTORS AND

NOTICE OF ANNUAL GENERAL MEETING

The notice convening the annual general meeting (“AGM”) of China Shineway Pharmaceutical Group Limited (the “Company”) to be held at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong at 11:00 a.m. on Friday, 30 May 2014 is set out on pages 15 to 18 of this circular.

Whether or not you are able to attend at the AGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s principal place of business in Hong Kong at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof (as the case may be) should you so wish.

Hong Kong, 23 April 2014

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Share Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
5.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
6.	Voting by Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
7.	Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
8.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I – EXPLANATORY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
APPENDIX II – DETAILS OF THE DIRECTORS PROPOSED
	TO BE RE-ELECTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE OF ANNUAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15

• i -

DEFINITIONS

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

“AGM” the annual general meeting of the Company to be held at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong at 11:00 a.m. on Friday, 30 May 2014, notice of which is set out on pages 15 to 18 of this circular or, where the context so admits, any adjournment thereof “Articles” the articles of association of the Company “associate(s)” has the same meaning ascribed to it under the Listing Rules “Board” the board of Directors “Companies Law” the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands “Company” China Shineway Pharmaceutical Group Limited, a company incorporated in the Cayman Islands on 14 August 2002 with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange “Director(s)” the director(s) of the Company for the time being “Extension Mandate” the proposed general mandate as defined in paragraph 3 of the Letter from the Board contained in this circular “Forway” Forway Investment Limited, a company incorporated in the British Virgin Islands with limited liability and the controlling shareholder of the Company within the meaning of the Listing Rules “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People's Republic of China “Latest Practicable Date” 14 April 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• 1 -

DEFINITIONS

“PRC”	the People’s Republic of China (and where the context requires,
	reference in this circular to the PRC do not apply to Hong Kong,
	Macau Special Administrative Region of the People's Republic of
	China or Taiwan)
“Repurchase Mandate”	the proposed general mandate to be granted to the Directors to
	repurchase Shares as defined in paragraph 2 of the Letter from the
	Board contained in this circular
“Repurchase Resolution”	the proposed ordinary resolution set out in the notice of the AGM
	as resolution no. 5(A)
“SFO”	Securities and Futures Ordinance, Chapter 571 of the Laws of Hong
	Kong
“Share(s)”	ordinary share(s) with nominal value of HK$0.10 each in the
	capital of the Company
“Shareholder(s)”	registered holder(s) of the Shares
“Share Issue Mandate”	the proposed general mandate to be granted to the Directors to allot,
	issue and deal in Shares as defined in paragraph 3 of the Letter
	from the Board contained in this circular
“Share Issue Resolution”	the proposed ordinary resolution set out in the notice of the AGM
	as resolution no. 5(B)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Codes on Takeovers and Mergers and Share Buy-backs
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

• 2 -

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 02877)

Executive Directors:

Mr. Li Zhenjiang (Chairman) Ms. Xin Yunxia Mr. Li Huimin Ms. Lee Ching Ton Brandelyn Dr. Wang Zheng Pin

Registered Office:

Cricket Square Hutchins Drive P. O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head Office:

Luan Cheng Shijiazhuang Hebei Province PRC

Independent Non-executive Directors:

Mr. Hung Randy King Kuen Ms. Cheng Li Mr. Sun Liutai

Company Secretary:

Ms. Wong Mei Shan

Principal Place of Business in

Hong Kong: Suite 5201, 52nd Floor Central Plaza 18 Harbour Road Wanchai Hong Kong

Hong Kong, 23 April 2014

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES, RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to give you notice of the AGM and to provide you with information relating to the proposals for (i) the grant of the Repurchase Mandate; (ii) the grant of the Share Issue Mandate; (iii) the grant of the Extension Mandate; and (iv) the re-election of retiring Directors.

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LETTER FROM THE BOARD

2. REPURCHASE MANDATE

An ordinary resolution of the Company was passed on 31 May 2013 whereby a general mandate was given to the Directors to repurchase Shares.

Such general mandate will lapse at the conclusion of the forthcoming AGM. Therefore an ordinary resolution will be proposed at the AGM to grant a general mandate to the Directors to repurchase Shares up to a maximum of 10% of the total nominal value of the Shares in issue as at the date of passing the Repurchase Resolution (the “Repurchase Mandate”).

An explanatory statement, as required under the Listing Rules, providing the requisite information of the Repurchase Mandate is set out in Appendix I to this circular.

3. SHARE ISSUE MANDATE

Ordinary resolutions of the Company were also passed on 31 May 2013 whereby (i) a general mandate was given to the Directors to allot, issue and deal with Shares and (ii) such a general mandate was extended by way of adding thereto the Shares repurchased by the Company pursuant to the general mandate to repurchase Shares granted to the Directors on 31 May 2013.

Such general mandates will lapse at the conclusion of the forthcoming AGM. Therefore two ordinary resolutions will be proposed respectively at the AGM to grant the Directors (i) a general mandate to allot, issue and deal with Shares up to a maximum of 20% of the total nominal value of the Shares in issue as at the date of passing the Share Issue Resolution (the “Share Issue Mandate”) and (ii) an extension of such general mandate so granted to the Directors by adding thereto the Shares repurchased by the Company pursuant to the Repurchase Mandate, up to a maximum of 10% of the total nominal value of the Shares in issue as at the date of passing of the resolution approving such an extension (the “Extension Mandate”).

4. RE-ELECTION OF RETIRING DIRECTORS

The Board currently consists of eight Directors, namely Mr. Li Zhenjiang, Ms. Xin Yunxia, Mr. Li Huimin, Ms. Lee Ching Ton Brandelyn, Dr. Wang Zheng Pin, Mr. Hung Randy King Kuen, Ms. Cheng Li and Mr. Sun Liutai.

Pursuant to Article 87(1) of the Articles, Ms. Xin Yunxia, Mr. Hung Randy King Kuen and Ms. Cheng Li will retire by rotation at the AGM. Pursuant to Article 86(3) of the Articles, Dr. Wang Zheng Pin, will hold office until the forthcoming AGM. The above-mentioned Directors, being eligible for re-election, offer themselves for re-election.

Brief biographical details of the above-mentioned Directors are set out in Appendix II to this circular.

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LETTER FROM THE BOARD

5. ANNUAL GENERAL MEETING

The notice convening the AGM, at which ordinary resolutions will be proposed to approve, inter alia, the Repurchase Mandate, the Share Issue Mandate, the Extension Mandate, the re-election of retiring Directors, the final dividend and the special dividend, is set out on pages 15 to 18 of this circular.

Whether or not you are able to attend the AGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s principal place of business in Hong Kong, at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof should you so wish.

6. VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman of the general meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The chairman of the AGM shall therefore demand voting on all resolutions set out in the notice of AGM be taken by way of poll pursuant to Article 66 of the Articles.

7. CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Wednesday, 28 May 2014 to Friday, 30 May 2014, both days inclusive, for the purpose of determining Shareholders’ eligibility to attend, act and vote at the AGM, during which period no transfer of shares will be registered. In order to determine the entitlement to attend, act and vote at the AGM, all transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m. on Tuesday, 27 May 2014.

The register of members of the Company will also be closed from Monday, 9 June 2014 to Tuesday, 10 June 2014, both days inclusive, for the purpose of determining Shareholders’ entitlement to the proposed final dividend and special dividend, during which period no transfer of shares will be registered. In order to qualify for the proposed final dividend and special dividend, all transfer documents, accompanied by the relevant share certificates, must be lodged with Computershare Hong Kong Investor Services Limited at the above address, for registration no later than 4:30 p.m. on Friday, 6 June 2014.

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LETTER FROM THE BOARD

8. RECOMMENDATION

The Directors consider that the proposals referred to in this circular are all in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend all Shareholders to vote in favour of the resolutions to be proposed at the AGM.

Yours faithfully, By Order of the Board LI Zhenjiang Chairman

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EXPLANATORY STATEMENT

APPENDIX I

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide you with all the information necessary for your consideration of the Repurchase Mandate.

1. LISTING RULES RELATING TO THE REPURCHASES OF SECURITIES

The Listing Rules permit a company with primary listing on the Stock Exchange to repurchase its securities on the Stock Exchange subject to certain restrictions, the most important of which are summarized below:

(a) Shareholders’ approval

The Listing Rules provide that all proposed repurchases of securities by a company with a primary listing on the Stock Exchange must be approved in advance by an ordinary resolution, either by way of a general mandate or by specific approval of a particular transaction.

(b) Source of funds

Repurchases must be made out of funds legally available for such purpose. A listed company may not repurchase its own securities on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange.

(c) Trading restrictions

The shares proposed to be repurchased by a company must be fully paid up. A maximum of 10% of the existing issued share capital as of the date of resolution passed on the grant of a repurchase mandate may be repurchased on the Stock Exchange. A company may not issue or announce an issue of new shares for a period of 30 days immediately following a repurchase (other than an issue of securities pursuant to an exercise of share options or similar instruments requiring the company to issue securities which were outstanding prior to such repurchase) without the prior approval of the Stock Exchange. In addition, a company shall not repurchase shares on the Stock Exchange if the purchase price is higher by 5% or more than the average closing market price for the five preceding trading days on which its shares were traded on the Stock Exchange. The Listing Rules also prohibit a company from repurchasing its own securities on the Stock Exchange if the repurchase would result in the number of that company’s listed securities which are in the hands of the public falling below the relevant prescribed minimum percentage as required by the Listing Rules.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 827,000,000 Shares. Subject to the passing of the Repurchase Resolution and on the basis that no further Shares are issued or repurchased by the Company prior to the AGM, the Company would be allowed under the Repurchase Mandate to repurchase up to a maximum of 82,700,000 Shares (representing 10% of the total nominal value of the Shares in issue as at the Latest Practicable Date).

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EXPLANATORY STATEMENT

APPENDIX I

3. REASONS FOR REPURCHASES

The Directors are of the view that the Repurchase Mandate is in the interests of the Company and the Shareholders as a whole. An exercise of the Repurchase Mandate may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value and its assets and/or its earnings per share of the Company and will only be made when the Directors are of the view that such a repurchase will benefit the Company and the Shareholders.

4. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association, the Articles and the applicable laws and regulations of the Cayman Islands. Pursuant to the Repurchase Mandate, repurchases will be made out of funds of the Company legally permitted to be utilized in this connection, including profits of the Company or out of a fresh issue of Shares made for such purpose of the repurchase or, if authorized by the Articles and subject to the Companies Law, out of capital and, in the case of any premium payable on the repurchase, out of the profits of the Company or from sums standing to the credit of the share premium account of the Company or, if authorized by the Articles and subject to the Companies Law, out of capital of the Company. The Company may not repurchase Shares on the Stock Exchange for a consideration other than cash or for settlement otherwise than in accordance with the trading rules of the Stock Exchange prevailing from time to time.

There might be a material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited financial statements contained in the annual report for the year ended 31 December 2013 in the event that the Repurchase Mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing positions which in the opinion of the Directors are from time to time appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX I

5. SHARE PRICES

The following table shows the highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the previous twelve months before the Latest Practicable Date:

	per Share
	Highest	Lowest
	HK$	HK$
2013
April	15.82	13.50
May	15.38	13.58
June	15.00	10.82
July	13.54	12.14
August	13.02	11.10
September	12.08	10.80
October	12.50	11.22
November	12.18	10.80
December	11.78	9.95
2014
January	12.30	10.38
February	12.10	10.80
March	13.70	11.46
April (up to the Latest Practicable Date)	15.70	13.38

6. SHARE REPURCHASE MADE BY THE COMPANY

No repurchases have been made by the Company of its Shares in the six months prior to the Latest Practicable Date.

7. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the power under the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands and its memorandum of association and the Articles.

None of the Directors nor, to the best of their knowledge, having made all reasonable enquiries, any of their associates, has any present intention, in the event that the Repurchase Mandate is approved by the Shareholders, to sell any Share to the Company under the Repurchase Mandate.

No other connected persons (as defined in the Listing Rules) has notified the Company that they have a present intention to sell any Share to the Company, or have undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders and exercised by the Board.

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EXPLANATORY STATEMENT

APPENDIX I

8. EFFECT OF TAKEOVERS CODE

If, as a result of the exercise of the repurchase of Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition of voting rights for the purposes of the Takeovers Code. As a result, a Shareholder or group of Shareholders acting in concert (within the meaning under the Takeovers Code), could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, 533,288,990 Shares are beneficially owned by Forway. The entire issued share capital of Forway is owned by Fiducia Suisse SA in its capacity as the trustee of The Li Family 2004 Trust, a discretionary trust, the founder (as defined in the SFO) of which is Mr. Li Zhenjiang and the discretionary objects of which are family members of Mr. Li Zhenjiang (excluding Mr. Li Zhenjiang himself). Accordingly, Mr. Li Zhenjiang, Forway and Fiducia Suisse SA are respectively deemed to be interested in the 533,288,990 Shares (representing approximately 64.48% of the total issued share capital of the Company as at the Latest Practicable Date) under the SFO.

In the event that the Directors exercise in full the power to repurchase Shares under the Repurchase Mandate, then, (if the present shareholding remains the same) the attributable interests of Fiducia Suisse SA, Mr. Li Zhenjiang and Forway would be increased to approximately 71.65% of the issued share capital of the Company. The Directors are of the view that such an increase will not give rise to an obligation to make a mandatory offer under Rules 26 and 32 of the Takeovers Code.

The Directors do not intend to exercise the Repurchase Mandate so as to reduce the issued share capital of the Company in public hands to less than 25% (or the relevant prescribed minimum percentage required by the Stock Exchange from time to time).

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DETAILS OF THE DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

Set out below are the particulars of the Directors who offer themselves to be re-elected at the AGM:

• (1) Ms. XIN Yunxia , aged 50, an executive Director and one of the founders of the Group. Ms. Xin graduated from the Yangtze Commercial Institute with an EMBA degree. Ms. Xin is primarily responsible for the Group’s human resources management and operation. Ms. Xin joined the predecessor of the Group in 1981, focused on administration. She was the Deputy General Manager (human resources management) of Shineway Medical Science & Technology Co., Ltd. immediately prior to the corporate reorganisation in preparation of the listing of the Company in 2004. Ms. Xin has more than 20 years’ experience in business management in the industry with the Group.

Ms. Xin has entered into a service contract with the Company for a term of 2 years from 1 October 2012. The aggregate remuneration and bonus paid for the year ended 31 December 2013 and payable for the nine months ending 30 September 2014 are approximately HK$1,035,000 and HK$776,250 respectively. According to the service contract of Ms. Xin, she is entitled to annual director’s fee of HK$71,200 and annual salary of HK$948,800. Ms. Xin is also entitled to a discretionary bonus to be determined by the Board at the Board’s absolute discretion (and approved by its duly appointed remuneration committee) having regard to the performance of the Group, provided that the aggregate amount of the bonus payable to all Directors in respect of any financial year shall not exceed 5% of the audited consolidated net profits after taxation but before extraordinary items of the Company for the relevant financial year. There will be no change to Ms. Xin’s service terms upon her re-election.

Save as disclosed above, Ms. Xin has not held directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years and has not held any other position with the Company and other members of the Group. Ms. Xin is not connected with any other directors, senior management, substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Ms. Xin beneficially owns 498,000 Shares and has interest in the options with subscription rights for 1,000,000 Shares, representing approximately 0.06% and 0.12% of the total issued share capital of the Company respectively. Save as disclosed above, as at the Latest Practicable Date, Ms. Xin does not have any interests in the shares of the Company within the meaning of Part XV of the SFO.

In relation to the re-election of Ms. Xin Yunxia as Director, there is no information which is discloseable nor is/was she involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under Rule 13.51(2) of the Listing Rules, and there is no other matter which needs to be brought to the attention of the Shareholders.

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DETAILS OF THE DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

• (2) Dr. WANG Zheng Pin , aged 60, is a United States citizen. He obtained doctor’s degree in China and a postdoctoral training in Biochemistry in the United States respectively. He has 20 years of experience in research on traditional Chinese medicine, around 15 years of experience in research and industrialized pharmaceutical products, and 8 years of teaching experience in university. He has served as chief scientific officer in a pharmaceutical company in China, and he has also served as a chief technology officer in an American biopharmaceutical company. He has solid knowledge and skills on pharmaceutical product development. He has joined the Company as Chief Scientific Officer since May 2013. Dr. Wang was appointed as an executive Director on 1 June 2013.

Dr. Wang has entered into a service contract with the Company for a term of 2 years from 1 June 2013. The aggregate remuneration paid for the seven months ended 31 December 2013, the year ending 31 December 2014 and the five months ending 31 May 2015 are approximately HK$911,000, HK$1,282,000 and HK$534,000 respectively. According to the service contract of Dr. Wang, he is entitled to annual director’s fee of RMB49,000 and annual salary of RMB651,000 and annual insurance and medical subsidy of RMB300,000. Dr. Wang is also entitled to a discretionary bonus to be determined by the Board at the Board’s absolute discretion (and approved by its duly appointed remuneration committee) having regard to the performance of the Group, provided that the aggregate amount of the bonus payable to all Directors in respect of any financial year shall not exceed 5% of the audited consolidated net profits after taxation but before extraordinary items of the Company for the relevant financial year. There will be no change to Dr. Wang’s service terms upon his re-election.

Save as disclosed above, Dr. Wang has not held directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years and has not held any other position with the Company and other members of the Group. Dr. Wang is not connected with any other directors, senior management, substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Dr. Wang has interest in the options with subscription rights for 1,000,000 Shares, representing approximately 0.12% of the total issued share capital of the Company. Save as disclosed above, as at the Latest Practicable Date, Dr. Wang does not have any interests in the shares of the Company within the meaning of Part XV of the SFO.

In relation to the re-election of Dr. Wang Zheng Pin as Director, there is no other information which is discloseable nor is/was he involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under Rule 13.51(2) of the Listing Rules, and there is no other matter which needs to be brought to the attention of the Shareholders.

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DETAILS OF THE DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

• (3) Mr. HUNG Randy King Kuen , aged 48, is a fellow Certified Public Accountant in Hong Kong and has extensive experience in corporate finance and investor relation. Mr. Hung is currently an executive director and chief financial officer of China Fiber Optic Network System Group Limited (stock code: 3777), and an independent non-executive director of Zhongyu Gas Holdings Limited (stock code: 3633). Mr. Hung has served as an executive Director of the Company from June 2005 to April 2010, and he has also served as an independent non-executive director of Zhongtian International Limited (stock code: 2379) from July 2004 to April 2011. Mr. Hung holds an MBA degree from the University of London, a bachelor’s degree of science in accounting and a certificate of programming and data processing from the University of Southern California, a certificate of China Accounting, Finance, Taxation and Law from the Chinese University of Hong Kong and a Hong Kong Securities Institute Specialist Certificate in corporate finance. Mr. Hung is a fellow of the Hong Kong Institute of Certified Public Accountants, a member of the American Institute of Certified Public Accountants, a member of the Hong Kong Securities Institute, a vice chairman of the Hong Kong Investor Relations Association and a council member of the Hong Kong Institute of Directors. Mr. Hung was appointed as an non-executive Director on 1 June 2011 and was re-designated to independent non-executive Director on 17 February 2014.

Mr. Hung has entered into a letter of appointment with the Company. The appointment of Mr. Hung as independent non-executive Director is for a term of 2 years from 17 February 2014. The aggregate director’s fee payable for the eleven months ending 31 December 2014, the year ending 31 December 2015 and the one month ending 31 January 2016 are approximately HK$143,000, HK$156,000 and HK$13,000 respectively. The emoluments of Mr. Hung were determined with reference to his duties, responsibilities and experience, as well as the Group’s emolument policy for independent nonexecutive Directors. There will be no change to Mr. Hung’s service terms upon his re-election.

Save as disclosed above, Mr. Hung has not held directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years and has not held any other position with the Company and other members of the Group. Mr. Hung is not connected with any other directors, senior management, substantial or controlling shareholders of the Company. He does not have any interests in the shares of the Company within the meaning of Part XV of the SFO.

In relation to the re-election of Mr. Hung Randy King Kuen as Director, there is no other information which is discloseable nor is/was he involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under Rule 13.51(2) of the Listing Rules, and there is no other matter which needs to be brought to the attention of the Shareholders.

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DETAILS OF THE DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

• (4) Ms. CHENG Li , aged 54, an independent non-executive Director, is a partner of Commerce & Finance Law Office. She has a legal science bachelor’s degree and a legal science master’s degree from the law department of Japan Special Training University. She also studied in Sino-Japanese Investment Trade Promotion Association. She joined Commerce & Finance Law Office in 1995 and became a partner of Commerce & Finance law Office in 2002. She is currently a member of Beijing Lawyer Association. Ms. Cheng was appointed as an independent non-executive Director in 2006.

Ms. Cheng has entered into a letter of appointment with the Company. The appointment of Ms. Cheng as an independent non-executive Director is for a term of 2 years from 3 July 2012. The aggregate director’s fee paid for the year ended 31 December 2013 and the six months ending 30 June 2014 are approximately HK$156,000 and HK$78,000 respectively. The emoluments of Ms. Cheng were determined with reference to her duties, responsibilities and experience, as well as the Group’s emolument policy for independent non-executive Directors. There will be no change to Ms. Cheng’s service terms upon her re-election.

Save as disclosed above, Ms. Cheng has not held directorships in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years and has not held any other position with the Company and other members of the Group. Ms. Cheng is not connected with any other directors, senior management, substantial or controlling shareholders of the Company. She does not have any interests in the shares of the Company within the meaning of Part XV of the SFO.

In relation to the re-election of Ms. Cheng Li as Director, there is no information which is discloseable nor is/was she involved in any of the matters required to be disclosed pursuant to any of the requirements of the provisions under Rule 13.51(2) of the Listing Rules, and there is no other matter which needs to be brought to the attention of the Shareholders.

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 02877)

NOTICE IS HEREBY GIVEN that an Annual General Meeting of China Shineway Pharmaceutical Group Limited (the “Company”) will be held at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong at 11:00 a.m. on Friday, 30 May 2014 (the “AGM”), for the following purposes:

1. To receive and consider the audited consolidated financial statements, the report of directors of the Company (the “Directors”) and the report of the independent auditor for the year ended 31 December 2013.

2. To declare a final dividend and special dividend for the year ended 31 December 2013.

3. To re-elect retiring Directors and to authorize the board of Directors to fix the remuneration of the Directors.

4. To re-appoint Deloitte Touche Tohmatsu as auditor and to authorize the board of Directors to fix their remuneration.

5. To consider, and if thought fit, pass (with or without modification) the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

(A) “ THAT :

• (a) subject to paragraph (b) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of HK$0.10 each in the capital of the Company on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or any other stock exchange on which the securities of the Company may be listed and recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”) or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the aggregate nominal amount of shares of the Company which the directors of the Company are authorized to repurchase pursuant to the approval in paragraph (a) above shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution and the said approval shall be limited accordingly; and

• (c) for the purpose of this resolution, “Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the law to be held; and

• (iii) the date on which the authority set out in this resolution is revoked, varied or renewed by an ordinary resolution of the shareholders of the Company in general meeting.”

(B) “ THAT :

• (a) subject to paragraph (c) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.10 each in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such power and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) above shall authorize the directors of the Company during the Relevant Period (as hereinafter defined) to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of the share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (a) above, other than pursuant to (i) a Rights Issue (as hereinafter defined); (ii) an issue of shares under any option scheme or similar arrangement for the time being adopted for the grant or issue of shares or rights to acquire shares of the Company; (iii) an issue of shares upon the exercise of the subscription or conversion rights under the terms of any warrants or any securities of the Company which are convertible into shares of the Company; or (iv) an issue of shares as scrip dividends pursuant to the Articles of Association of the Company

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NOTICE OF ANNUAL GENERAL MEETING

from time to time, shall not exceed 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this resolution, and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution, “Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the law to be held; and

• (iii) the date on which the authority set out in this resolution is revoked or varied or renewed by an ordinary resolution of the shareholders of the Company in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the directors of the Company to the holders of shares of the Company on the register on a fixed record date in proportion to their then holdings of such shares as at that date (subject to such exclusion or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory outside Hong Kong applicable to the Company).”

• (C) “ THAT subject to the passing of the Resolution nos. 5(A) and 5(B) set out in the notice convening this meeting, the general mandate granted to the directors of the Company to allot, issue and deal with additional shares pursuant to Resolution no. 5(B) set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of shares capital of the Company repurchased by the Company under the authority granted pursuant to Resolution no. 5(A) set out in the notice convening this meeting, provided that such extended amount of shares so repurchased shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of this resolution.”

By Order of the Board of China Shineway Pharmaceutical Group Limited LI Zhenjiang Chairman

Hong Kong, 23 April 2014

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the meeting (or any adjournment thereof) is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2. To be valid, the form of proxy together with any power of attorney or other authority (if any) under which it is signed, or a certified copy thereof, must be lodged with the Company’s principal place of business in Hong Kong at Suite 5201, 52nd Floor, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. The register of members of the Company will be closed from Wednesday, 28 May 2014 to Friday, 30 May 2014, both days inclusive, for the purpose of determining Shareholders’ eligibility to attend, act and vote at the AGM, during which period no transfer of shares will be registered. In order to determine the entitlement to attend, act and vote at the AGM, all transfer documents, accompanied by the relevant share certificates, must be lodged with the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at Rooms 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m. on Tuesday, 27 May 2014.

The register of members of the Company will also be closed from Monday, 9 June 2014 to Tuesday, 10 June 2014, both days inclusive, for the purpose of determining Shareholders’ entitlement to the proposed final dividend and special dividend, during which period no transfer of shares will be registered. In order to qualify for the proposed final dividend and special dividend, all transfer documents, accompanied by the relevant share certificates, must be lodged with Computershare Hong Kong Investor Services Limited at the above address, for registration no later than 4:30 p.m. on Friday, 6 June 2014.

1. With regard to item no. 3 in this notice, the board of Directors proposes that the retiring Directors namely, Ms. XIN Yunxia, Mr. HUNG Randy King Kuen, Ms. CHENG Li and Dr. WANG Zheng Pin, be re-elected as Directors. Details of these Directors are set out in Appendix II to the circular to shareholders of the Company dated 23 April 2014.

2. As at the date of this notice, the executive Directors are Mr. LI Zhenjiang, Ms. XIN Yunxia, Mr. LI Huimin, Ms. LEE Ching Ton Brandelyn and Dr. WANG Zheng Pin, and the independent non-executive Directors are Mr. HUNG Randy King Kuen, Ms. CHENG Li and Mr. SUN Liutai.

3. If Typhoon Signal No. 8 or above is expected to be hoisted or a Black Rainstorm Warning Signal is expected to be in force any time after 8:00 a.m. on the date of the meeting, then the meeting will be postponed. The meeting will be held as scheduled when an Amber or a Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the meeting under bad weather condition bearing in mind their own situations.

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