CHINA STATE CONSTRUCTION DEVELOPMENT HOLDINGS LIMITED — Proxy Solicitation & Information Statement 2013

Sep 26, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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.

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or otherwise transferred all your shares in China Jiuhao Health Industry Corporation Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 419)

CONNECTED TRANSACTION RELATING TO PROPOSED AMENDMENT TO CONVERTIBLE NOTES AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the Independent Board Committee and Independent Shareholders

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A notice of the EGM to be held at Plaza 1-2, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 16 October 2013 at 10:00 a.m. is set out on pages 31 to 32 of this circular. A form of proxy for use by the Shareholders at the EGM is enclosed. If you do not intend to attend the EGM in person, please complete the form of proxy enclosed in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited at 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding the EGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

27 September, 2013

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . .	13
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . . . . . . . .	15
APPENDIX – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31

– i –

DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

• “Acquisition”

the acquisition by the Company of the entire issued share capital of Yuan Shun Investments Limited as announced by the Company on 25 May 2012

• “Ample Capital”

Ample Capital Limited, a corporation licensed to carry on type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Proposed Amendment

• “Board” the board of Directors

• “Company” China Jiuhao Health Industry Corporation Limited, a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the main board of the Stock Exchange

• “Convertible Notes” the RMB569,000,000 (approximately HK$700,000,000) face value convertible notes issued by the Company as part consideration in connection with the Acquisition

• “Deed of Variation” the deed of variation dated 3 September 2013 entered into between the Company and Smart Concept Enterprise Limited relating to the amending of the terms and conditions of the Convertible Notes

• “Director(s)” the director(s) of the Company

• “EGM”

• the extraordinary general meeting of the Company to be held and convened to the Independent Shareholders approving the Deed of Variation

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

– 1 –

DEFINITIONS

• “Independent Board Committee” the board committee comprising all the independent non-executive Directors to advise the Independent Shareholders as to fairness and reasonableness of the Deed of Variation and the transactions contemplated thereunder

• “Independent Shareholders” Shareholders other than Mr. Yuen and his associates “Latest Practicable Date” 24 September 2013, being the latest practicable date for ascertaining certain information prior to printing of this circular

• “Listing Rules” the Rules Governing the listing of securities on the Main Board of the Stock Exchange

• “Mr. Yuen” Mr. YUEN Hoi Po, an executive director of the Company “Noteholders” holders of the Convertible Notes “Proposed Amendment” the proposed amendment to the terms and conditions of the Convertible Notes which involves allowing the Company to early redeem the outstanding Convertible Notes at their face value

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended from time to time

• “Share(s)” the ordinary share(s) HK$0.20 each in the share capital of the Company

• “Shareholder(s)” holder(s) of Share(s) as recorded on the registers of members of the Company

• “Stock Exchange” The Stock Exchange of Hong Kong Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 419)

Executive Directors: Mr. YUEN Hoi Po (Chairman) Mr. ZHANG Changsheng (Vice Chairman)

Non-executive Directors:

Mr. Edward TIAN Suning Mr. Hugo SHONG

Independent Non-executive Directors: Professor WEI Xin Dr. WONG Yau Kar David, BBS, JP Mr. YUEN Kin Mr. CHU Yuguo

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

Principal place of business in Hong Kong: Suite 3503, 35/F Tower Two, Lippo Centre 89 Queensway Hong Kong

27 September, 2013

To the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION – PROPOSED AMENDMENT TO CONVERTIBLE NOTES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

On 3 September 2013, the Company announced that it and Smart Concept Enterprise Limited, a company wholly-owned by Mr. Yuen, an executive director of the Company and being the sole Noteholder, entered into the Deed of Variation to amend a term of the Convertible Notes to permit the Company to early redeem the outstanding Convertible Notes at their face value.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with details of the Proposed Amendment, the letter from Independent Board Committee, the letter from the Independent Financial Adviser to the Independent Board Committee and Independent Shareholders and notice convening the EGM.

PROPOSED AMENDMENT TO CONVERTIBLE NOTES

Reference is made to the Company’s announcement dated 25 May, 2012 and the circular dated 8 August, 2012 in relation to the Acquisition. As part of the consideration for the Acquisition, which involved acquiring the entire issued share capital of Yuan Shun Investments Limited for an aggregate consideration of HK$900 million, the Company settled the consideration as to HK$50 million in cash, HK$150 million by way of a promissory note and HK$700 million by the issue of the Convertible Notes to Smart Concept Enterprise Limited.

The terms of the Convertible Notes were set out in the Company’s circular dated 8 August 2012 and the principal terms of which (adjusted for the effect of two-in-one share consolidation effective from 24 August 2012) are as follows:

Issuer The Company Noteholder Smart Concept Enterprise Limited Principal Amount RMB569 million (equivalent to approximately HK$700 million), which amount will not be subject to any change notwithstanding variation in the conversion rate between HK$ and RMB. Interest Zero coupon Maturity Date Subject to the terms and conditions of the Convertible Notes, the Maturity Date shall fall on the third anniversary from the date of issue of the Convertible Notes.

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LETTER FROM THE BOARD

Conversion Rights Provided that any conversion of the Convertible Notes does not trigger a mandatory offer obligation under Rule 26 of the Takeovers Code on the part of the Noteholder who exercises the Conversion Rights, whether or not such mandatory offer obligation is triggered by the fact that the number of Conversion Shares to be allotted and issued following the exercise of the Conversion Rights attaching to Convertible Notes and, if applicable, together with any Shares already owned or agreed to be acquired by the Noteholder or parties acting in concert with it, represents 30% or more (or such other percentage as stated in Rule 26 of the Takeovers Code in effect from time to time) of the then issued ordinary share capital of the Company or otherwise pursuant to other provisions of the Takeovers Code; and any conversion of the Convertible Notes will not result in an insufficient public float for the Company under the Listing Rules, the Noteholder shall have the right on any Business Day during the Conversion Period to convert the whole or part of such principal amount of the Convertible Notes set out therein into Conversion Shares at the Conversion Price, other than the part of the Convertible Note which has been called for redemption before the Maturity Date of the Convertible Notes.

Conversion Price The initial Conversion Price will be HK$0.20 per Conversion Share subject to adjustment provisions customary for convertible securities of a similar type. The adjustment events will arise as a result of certain changes in the share capital of the Company including consolidation or sub-division of shares, capitalisation of profits or reserves, capital distributions in cash or specie or subsequent issue of securities in the Company at substantial discount to market value. The Company shall issue an announcement in the event that there are any changes in the initial Conversion Price (and any subsequent changes in the conversion price of the Convertible Notes) in the future to comply with the relevant requirements under the Listing Rules.

Conversion Shares 3,500 million new Shares to be issued upon full conversion of the Convertible Notes on the basis of the Principal Amount (in terms of HK$) and initial Conversion Price subject to adjustment.

Redemption The Noteholder is not permitted to require redemption of the Convertible Notes before the Maturity Date unless an event of default shall have occurred and the Noteholder shall have given a duly completed and signed notice of redemption, together with the Convertible Note Certificate to the Company not later than 60 calendar days following the occurrence of an event of default specifying the date of redemption and the amount proposed to be redeemed.

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LETTER FROM THE BOARD

Events of default for early redemption include the following:

• (a) the Company defaults in making payment of any principal, redemption or other amount due in respect of the Convertible Notes and such default continues for more than fourteen (14) Business Days;

• (b) the Company fails to deliver any Shares as and when such Shares are required to be delivered following conversion of the Convertible Notes and such failure continues for more than fourteen (14) Business Days;

• (c) the Company defaults in performance or observance or compliance with any material obligations set out in the Conditions of the Convertible Notes or any of its material representations, warranties or covenants is breached which default or breach is incapable of remedy or, if capable of remedy, is not remedied within fourteen (14) Business Days after notice of the occurrence of such default or breach from the Noteholder to the Company; or

• (d) an encumbrancer takes possession or a receiver, manager or other similar officer is appointed of the whole or any material part of the undertaking, property, assets or revenues of the Company which is not dismissed or discharged or settled within sixty (60) Business Days; or

• (e) the Company becomes insolvent or is unable to pay its debts as they fall due or applies for or consents to or suffers the appointment of any administrator, liquidator or receiver of the Company the whole or any material part of the undertaking, property, assets or revenues of the Company which is not dismissed or discharged or settled within sixty (60) Business Days or takes any proceeding under any law for a readjustment or deferment of its obligations or any part of them or makes or enters into a general assignment or compromise with or for the benefit of its creditors or initiates or consents to proceedings relating to itself under any applicable bankruptcy or insolvency law relating to the insolvency or inability to repay debts of the Company; or

• (f) a moratorium is agreed or declared in respect of any indebtedness of the Company of material effect or any governmental authority or agency seizes all or a material part of the assets of the Company; or

• (g) the voluntary delisting of the Shares (as a class) on the Stock Exchange.

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LETTER FROM THE BOARD

Transferability

The Convertible Notes may be assignable or transferable provided that the Convertible Notes may not be transferred to any connected person of the Company.

Ranking The Conversion Shares, when allotted and issued, will rank pari passu in all respects with all existing Shares in issue on the date of allotment and issue of such Conversion Shares. There shall be no restriction for subsequent sale of the Conversion Shares,

Voting rights The Noteholder will not be entitled to attend or vote at any general meetings of the Company by reason only of it being the Noteholder.

The Proposed Amendment

On 3 September 2013, the Company and Smart Concept Enterprise Limited, the current holder of the Convertible Notes, entered into the Deed of Variation to vary terms and conditions of the Convertible Notes so as to permit the Company to early redeem all or part of the Convertible Notes at their face value before they are matured or converted into Shares.

Apart from the Proposed Amendment, all other terms and conditions of the Convertible Notes remain intact and unchanged. There is no restriction on early redemption of the Convertible Notes by the Company following the taking effect of the Deed of Variation. Redemption would be by means of not less than 14 days’ prior written notice to the Noteholder given by the Company. Redemption is expected to be in multiples of not less than HK$1,000,000 each. The Noteholder does not have any right to request early redemption of the Convertible Notes before and after the Proposed Amendment.

The Deed of Variation shall be subject to the following conditions:

• (i) all necessary consents and approvals (including Independent Shareholder’s approval) required to be obtained on the part of the Company in respect of the Deed of Variation having been obtained;

• (ii) approval of not less than 75% in principal amount of the holders of the Convertible Notes;

and

• (iii) the Stock Exchange having approved the Proposed Amendment.

As at the Latest Practicable Date, none of the conditions other than (ii) has been fulfilled. The Proposed Amendment shall take effect immediately upon the fulfillment of the abovementioned conditions.

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LETTER FROM THE BOARD

Reasons for the Proposed Amendment

The original terms and conditions of the Convertible Notes do not provide any flexibility for the Company to early redeem all or part of the Convertible Notes, even when the Company considers that it has adequate financial capability to early redeem all or part of the Convertible Notes and is in its and its Shareholders’ interests as a whole. The Proposed Amendment can provide such flexibility to the Company to manage its debt level as the Company can early redeem all or part of the Convertible Notes at their face value by means of not less than 14 days’ prior written notice to the Noteholder.

The Board will consider, inter alia, the following factors to determine whether to early redeem of all or part of the Convertible Notes:

• (i) (a) whether the Company has surplus financial resources to early redeem all or part of the Convertible Notes; (b) such early redemption of all or part of the Convertible Notes not having a material affect on the Group’s normal operations and (c) the cashflow forecast in connection with the Subject Land as summarised on page 9 herein.

• (ii) whether the net assets per share shall be higher upon the early redemption of all or part of the Convertible Notes, as compared to the net assets per share upon the potential conversion of all or part of the Convertible Notes by Noteholder before the Maturity Date.

• (iii) the early redemption of the Convertible Notes can prevent existing shareholders from being further diluted as a result of potential conversion of all or part of the Convertible Notes by the Noteholder before the Maturity Date. Existing shareholders other than Mr. Yuen and its associates hold 77.45% of the total issued share capital of the Company as at 30 June 2013. Assuming conversion of all of the Convertible Notes by Noteholder as at 30 June 2013, the interests of the existing shareholders other than the Noteholder and Mr. Yuen and its associates will be diluted to 33.11% of the total issued share capital of the Company.

As at the Latest Practicable Date, the Company has no intention to early redeem all or part of the Convertible Notes as the Company currently does not have surplus financial resources to do so. The Company proposes the Proposed Amendment now so as to provide flexibility to the Company as mentioned above and so that the Company can immediately redeem the Convertible Note or part thereof in the event of unexpected positive changes to the Company’s financial/cash position.

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LETTER FROM THE BOARD

In October 2012, the Group acquired the development and operating rights of a land plot in the PRC adjacent to “Bayhood No. 9 Club” with an area of 387,000 square metres (the “Subject Land”). The Group plans to develop the land into the Health Preservation Si He Yuan and Hotel, which, in conjunction with “Bayhood No. 9 Club”, will be developed into the Group’s first flagship health industry project, China Jiuhao (Beijing) Health Town.

With a total floor area of over 80,000 square metres, Beijing Health Preservation Si He Yuan and Hotel will comprise low-density deluxe hotel, villas and conferencing facilities. Phase 1 of the project, mainly comprising nine villas with a floor area of approximately 20,000 square metres, has commenced in August this year and is expected to be completed in succession beginning from the first quarter of 2014. The nine villas of Phase 1 are now being offered for pre-lease. The construction of Phase 2 of the project, comprising more than 20 villas, boutique hotels, clubhouse, dining and conferencing facilities, is expected to commence in the second half of 2014 and be completed in succession in 2015. The details of the total estimated capital expenditure (“CAPEX”) of RMB838 million for the Subject Land as disclosed in the circular dated 8 August 2012 are as follows:

Phase 1 (gross floor area of approximately 20,000 square meters) – Civil engineering construction – Other (ventilation, air- conditioning, water and sewage, electricity, fire prevention)” – Gardening – Interior decoration and furniture Phase 1 sub-total	CAPEX incurred up to 30/6/2013 RMB million 18 – – – 18	CAPEX to be incurred Expected time of settlement of CAPEX to be incurred Source of funding for CAPEX to be incurred RMB million 37 By first quarter of 2015 To be financed from the Group’s internal resources, including proceeds from the disposal of the entire interest in subsidiaries principally engaging in properties investment in Shenzhen as disclosed in the Company’s announcement dated 17 April 2013 50 10 95 192

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LETTER FROM THE BOARD

Phase 2 (gross floor area of approximately 60,000 square meters) – Civil engineering construction – Other (ventilation, air- conditioning, water and sewage, electricity, fire prevention)” – Gardening – Interior decoration and furniture Phase 2 sub-total Total	CAPEX incurred up to 30/6/2013 RMB million – – – – – 18	CAPEX to be incurred Expected time of settlement of CAPEX to be incurred Source of funding for CAPEX to be incurred RMB million 165 By end of 2016 Cashflow from phase 1 and 2 operations 150 28 285 628 820

For the Group’s latest business operation status, financial position, working capital requirement and capital commitment, please refer to the Management, Discussion and Analysis section and the consolidated financial statements for the six months ended 30 June 2013 of the Company’s 2013 interim report.

If early redemption of the Convertible Notes is made, the proportionate amount of book value of the Convertible Notes (under non-current liabilities) is to be written off and the difference between the amount written off and the cash paid is to be charged to the income statement as finance costs. The proportionate amount of the equity component of Convertible Notes (under equity) is to be reclassified into retained earnings as distributable reserve.

The Proposed Amendment which was arrived after arm’s length negotiation between the Board and Smart Concept Enterprise Limited has no financial impact to the financial position and operations of the Group as a result of such amendment.

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LETTER FROM THE BOARD

In view of the above, the Board considers that the Proposed Amendment is in the interests of the Company and the Independent Shareholders as a whole.

Listing Rules implications

According to Rule 28.05 of the Listing Rules, any alterations in the terms of convertible equity securities after issue must be approved by the Stock Exchange, except where the alterations take effect automatically under the existing terms of such convertible equity securities. The Proposed Amendment shall be subject to the approval of the Stock Exchange. An application for approval of the Proposed Amendment has been submitted by the Company to the Stock Exchange.

The Company will put forward the Proposed Amendment at the EGM for approval.

As Smart Concept Enterprise Limited is wholly-owned by Mr. Yuen and he is an executive director of the Company, the Proposed Amendment constitutes a connected transaction for the Company under the Listing Rules and is subject to reporting, announcement and Independent Shareholders’ approval requirements.

The Independent Board Committee comprising all the independent non-executive Directors, has been formed to advise the Independent Shareholders as to the fairness and reasonableness of the Proposed Amendment. A letter from the Independent Board Committee containing its advice and recommendation to the Independent Shareholders in respect of the Proposed Amendment has been set out on pages 13 to 14 of this circular.

Ample Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard and a letter from Ample Capital to the Independent Board Committee and the Independent Shareholders containing its advice in respect of the Proposed Amendment has been set out on pages 15 to 22 of this circular.

EGM

The notice convening the EGM to be held at Plaza 1-2, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 16 October 2013 at 10:00 a.m. is set out on pages 31 and 32 of this circular.

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LETTER FROM THE BOARD

The EGM is convened to be held on 16 October 2013 for the purpose of considering and, if thought fit, approving the resolution of the Proposed Amendment. Mr. Yuen and his associates will abstain from voting in respect of any of the proposed resolutions at the EGM. The interest held by Mr. Yuen and his associates in the Company as at the Latest Practicable Date is 450,030,107 Shares representing 17.22% of the entire issued share capital of the Company. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, apart from Mr. Yuen, no Shareholder is required to abstain from voting on any of the proposed resolutions at the EGM. Apart from Mr. Yuen, none of the Directors has any material interest in the Proposed Amendment and as such, only Mr. Yuen has abstained from voting on the resolution to approve the Proposed Amendment at the relevant meeting of the Board. There is a form of proxy for use at the EGM accompanying this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the EGM or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM (or any adjourned meeting thereof) should you wish to do so and in such event, the proxy shall be deemed to be revoked.

The resolutions proposed to be approved at the EGM will be taken by poll and an announcement will be made by the Company following the conclusion of the EGM to inform you of its results.

RECOMMENDATION

The Board believes that the entering into the Deed of Variation is in the interests of the Company and the Shareholders as a whole and recommend the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM.

Your attention is drawn to the additional information set out the appendix to this circular.

By Order of the Board

China Jiuhao Health Industry Corporation Limited YUEN Hoi Po Chairman

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LETTER FROM INDEPENDENT BOARD COMMITTEE

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 419)

27 September 2013

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION – PROPOSED AMENDMENT TO CONVERTIBLE NOTES AND NOTICE OF EXTRAORDINARY GENERAL MEETING

We refer to the Company’s circular dated 27 September 2013 (the “Circular”) to the Shareholders, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

We have been appointed by the Board as members to form the Independent Board Committee and to advise you the terms of the Deed of Variation and whether such terms are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Ample Capital has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Deed of Variation are on normal commercial terms and are fair and reasonable; and whether the Proposed Amendment is in the interests of the Company and the Shareholders as a whole. Details of its advice, together with the principal factors taken into consideration in arriving at such advice, are set out on pages 15 to 22 of the Circular.

Your attention is also drawn to the letter from the Board set out on pages 3 to 12 of the Circular and the additional information set out in the appendix to the Circular.

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LETTER FROM INDEPENDENT BOARD COMMITTEE

Having considered the terms of the Deed of Variation and the advice of Ample Capital, we are of the opinion that the terms of the Deed of Variation are on normal commercial terms and are fair and reasonable and the Proposed Amendment is in the interests of the Company and the Shareholders as a whole. We therefore recommend that you vote in favour of the resolution to be proposed at the EGM to approve the Deed of Variation.

Yours faithfully, For and on behalf of Independent Board Committee of

China Jiuhao Health Industry Corporation Limited Professor WEI Xin Dr. WONG Yau Kar David YUEN Kin

CHU Yuguo

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LETTER FROM INDEPENDENT FINANCIAL ADVISER

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Ample Capital Limited Unit A, 14th Floor Two Chinachem Plaza 135 Des Voeux Road Central Hong Kong

27 September 2013

To the Independent Board Committee and the Independent Shareholders of China Jiuhao Health Industry Corporation Limited

Dear Sirs,

CONNECTED TRANSACTION RELATING TO PROPOSED AMENDMENT TO CONVERTIBLE NOTES

INTRODUCTION

We refer to our engagement by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed Amendment, the particulars of which have been set out in a circular to the Shareholders dated 27 September 2013 (the “ Circular ”) and in which this letter is reproduced. Unless the context requires otherwise, terms used in this letter shall have the same meanings as given to them in the Circular.

Ample Capital has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to give our recommendations as to whether the terms of the Proposed Amendment are fair and reasonable. Details of the reasons for entering into the Deed of Variation are set out in the section headed “Letter from the Board” in the Circular (the “ Board Letter ”).

As Smart Concept Enterprise Limited is wholly-owned by Mr. Yuen and he is an executive Director, the Proposed Amendment constitutes a connected transaction for the Company under the Listing Rules and is subject to reporting, announcement and Independent Shareholders’ approval requirements.

– 15 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

BASIS OF ADVICE

In formulating our opinions and recommendations, we have relied on the information supplied to us by the Company, the opinions expressed by, and the representations of, the Directors and the management of the Company, including those set out in the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and presentation provided to us by the Directors. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. The Directors have confirmed that, to the best of their knowledge, they believe that no material fact or information has been omitted from the information supplied and that the representations made or opinions expressed have been arrived at after due and careful consideration and there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading.

While we have taken reasonable steps to satisfy the requirements under the Listing Rules, we have not carried out any independent verification of the information, opinions or representations given or made by or on behalf of the Company, nor have we conducted an independent investigation into the business affairs or assets and liabilities of the Group or any of the other parties involved in the Proposed Amendment.

In the event of inconsistency, the English text of this letter shall prevail over the Chinese translation of this letter.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion in the Proposed Amendment, we have taken into consideration the following factors:

1. Background information on the Group

As per the Company’s interim report for the six months ended 30 June 2013 (the “ Interim Report ”), the Group is principally engaged in the health industry and media business in the PRC. A summary of certain of the Group’s financial information as extracted from the Interim Report is set out below.

– 16 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

Revenue Profit/(loss) attributable to equity holders of the Company Total assets Total liabilities Net assets attributable to owners of the Company Cash and cash equivalents		Six months ended 30 June 2013 2012 HK$’000 HK$’000 (unaudited) (unaudited) 63,554 79,404 (124,167) 10,959 As at 30 June 2013 2012 HK$’000 HK$’000 (unaudited) (audited) 2,877,564 3,025,756 1,361,604 1,428,859 1,515,960 1,596,897 48,375 179,527
		63,554 (124,167)
		2,877,564 1,361,604 1,515,960 48,375

During the six months ended 30 June 2013, the Company recorded unaudited consolidated revenue of approximately HK$63,554,000, representing an approximately 20.0% decrease over the unaudited consolidated revenue of approximately HK$79,404,000 generated in the six months ended 30 June 2012. Furthermore, the Company recorded unaudited consolidated loss attributable to equity holders of the Company of approximately HK$124,167,000 for the six months ended 30 June 2013 compared with an unaudited consolidated profit attributable to equity holders of the Company of approximately HK$10,959,000 for the six months ended 30 June 2012. The Interim Report attributes the worsening performance from continuing operations during the six months ended 30 June 2013 to the followings: (i) increased finance costs from approximately HK$12 million in the prior period to approximate HK$42 million in the current period; (ii) increased non-cash intangible asset amortization expenses from approximately HK$5 million in the prior period to approximately HK$19 million in the current period; and (iii) included in the prior period’s cost of sales was a one-off write back of accrual of “operating lease rentaloperating right” of approximately HK$25 million, which was not recurred in the current period. As at 30 June 2013, the Company had unaudited consolidated total assets, total liabilities and net assets attributable to owners of the Company of approximately HK$2,877,564,000, HK$1,361,504,000 and HK$1,515,960,000, respectively. In addition, the Company had unaudited consolidated cash and bank balances of approximately HK$48,375,000 as at 30 June 2013.

– 17 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

2. Reasons for the Proposed Amendment

As stated in the Board Letter, the original terms and conditions of the Convertible Notes do not provide any flexibility for the Company to early redeem all or part of the Convertible Notes, even when the Company considers that it has adequate financial capability to early redeem all or part of the Convertible Notes and is in its and its Shareholders’ interest as a whole. The Proposed Amendment can provide such flexibility to the Company to manage its debt level as the Company can early redeem all or part of the Convertible Notes at their face value by means of not less than 14 days’ prior written notice to the Noteholder.

The Board will consider, inter alia, the following factors to determine whether to early redeem all or part of the Convertible Notes:

• (i) (a) Whether the Company has surplus financial resources to early redeem all or part of the Convertible Notes; (b) with such early redemption of all or part of the Convertible Notes not having a material effect on the Group’s normal operations and (c) the cashflow forecast in connection with the Subject Land as summarised in the Board Letter.

• (ii) Whether the net assets per share shall be higher upon the early redemption of all or part of the Convertible Notes, as compared to the net assets per share upon the potential conversion of all or part of the Convertible Notes by the Noteholder before the Maturity Date.

• (iii) The early redemption of the Convertible Notes can prevent existing shareholders from being further diluted as a result of potential conversion of all or part of the Convertible Notes by the Noteholder before the Maturity Date. Existing shareholders other than Mr. Yuen and his associates hold 77.45% of the total issued share capital of the Company as at 30 June 2013. Assuming conversion of all of the Convertible Notes by the Noteholder as at 30 June 2013, the interests of the existing shareholders other than the Noteholder and Mr. Yuen and their associates will be diluted to 33.11% of the total issued share capital of the Company.

– 18 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

The Board Letter further explains that as at the Latest Practicable Date, the Company has no intention to early redeem all or part of the Convertible Notes as the Company currently does not have surplus financial resources to do so. The Company proposes the Proposed Amendment now so as to provide flexibility to the Company as mentioned above and so that the Company can immediately redeem the Convertible Note or part thereof in the event of unexpected positive changes to the Company’s financial/cash position.

The Proposed Amendment which was arrived at after arm’s length negotiation between the Board and Smart Concept Enterprise Limited has no financial impact to the financial position and operations of the Group as a result of such amendment.

In view of the above, the Board considers that the Proposed Amendment is in the interests of the Company and the Independent Shareholders as a whole. We concur with the Board’s view as the Proposed Amendment would allow the Group with more flexibility in managing its debt level and potential dilution to existing shareholders arising out of conversion of the Convertible Notes.

We note from the Company’s circular dated 8 August 2012 (the “ Previous Circular ”) issued with connection the Acquisition and the Convertible Notes that (i) the Company has no intention to settle the convertible note before its maturity date; and (ii) the Company should have sufficient cash flow to settle the principal of the Convertible Note upon commencement of the full operation of all villas on the Subject Land. As advised by the Group’s management, there has been no change in circumstance and merely the Board is reviewing the terms and conditions of the Convertible Notes and noticing this issue.

As discussed in section 1 of this letter above, the Group had unaudited consolidated cash and cash equivalents of approximately HK$48,375,000 as at 30 June 2013. Full redemption of the outstanding principal of the Convertible Notes, if the Proposed Amendment has become effective, would require cash of approximately HK$700 million. Although it would appear that the Group does not have sufficient financial resources to fully redeem the outstanding principal of the Convertible Notes based on its unaudited cash position as at 30 June 2013, it is noted that the Group is allowed to make full or partial early redemption of the Convertible Notes under the Proposed Amendment, and the factors to be considered by the Board when making an early redemption are, amongst others, whether the Company has surplus financial resources to early redeem all or part of the Convertible Notes with such early redemption not having a material effect on the Group’s normal operations as discussed above. As the Group may make full or partial early redemption, we believe the Proposed Amendment is still beneficial to the Group after having considered its unaudited financial position as at 30 June 2013.

– 19 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

3. The Proposed Amendment

3.1 The Convertible Notes

Reference is made to the Company’s announcement dated 25 May 2012 and the Previous Circular in relation to the Acquisition. As part of the consideration for the Acquisition, which involved acquiring the entire issued share capital of Yuan Shun Investments Limited for an aggregate consideration of HK$900 million, the Company settled the consideration as to HK$50 million in cash, HK$150 million by way of a promissory note and HK$700 million by the issue of the Convertible Notes to Smart Concept Enterprise Limited.

Set out below are selected current major terms of the Convertible Notes as at the Latest Practicable Date as extracted from the Board Letter and the Previous Circular and as advised by the Group’s management.

Issuer : The Company Noteholder : Smart Concept Enterprise Limited Principal amount : RMB569 million (equivalent to approximately HK$700 million), which amount will not be subject to any change nothwithstanding variation in the conversion rate between HK$ and RMB. Interest : Zero coupon Maturity Date : Subject to the terms and conditions of the Convertible Notes, the maturity date shall fall on the third anniversary from the date of issue of the Convertible Note, i.e. 21 October 2015 (the “ Maturity Date ”). Conversion price : The conversion price is HK$0.20 per conversion share subject to adjustment provisions customary for convertible securities of a similar type. Conversion shares : 3,500 million new Shares to be issued upon full conversion of the Convertible Notes on the basis of the principal amount and the initial conversion price subject to adjustment. Redemption : The Noteholder is not permitted to require redemption of the Convertible Note before the Maturity Date unless an event of default shall have occurred and the Noteholder shall have given a duly completed and signed notice of redemption.

– 20 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

The Board Letter states that in October 2012, the Group acquired the development and operating rights of the Subject Land. As per the Previous Circular, the Acquisition involved acquiring the entire issued share capital of Yuan Shun Investments Limited which indirectly held the Subject Land. The Board Letter further explains the Group plans to develop the land into the Health Preservation Si He Yuan and Hotel, which, in conjunction with “Bayhood No. 9 Club”, will be developed into the Group’s first flagship healthy industry project, China Jiuhao (Beijing) Health Town.

The Board Letter further explains that with a total floor area of over 80,000 square meters, Beijing Health Preservation Si He Yuan and Hotel will comprise low-density deluxe hotel, villas and conferencing facilities. Phase 1 of the project, mainly comprising nine villas with a floor area of approximately 20,000 square meters, has commenced in August this year and is expected to be completed in succession beginning from the first quarter of 2014. The nine villas of Phase 1 are now being offered for pre-lease. The construction of Phase 2 of the project, comprising more than 20 villas, boutique hotels, clubhouse, dining and conferencing facilities, is expected to commence in the second half of 2014 and be completed in succession in 2015. There is no material change to the total estimated capital expenditure of RMB838 million as disclosed in the Previous Circular. Such capital expenditure is to be funded by the Group’s internal resources and the operating earnings of the villa operations on the Subject Land.

3.2 The Proposed Amendment

The Board Letter states that on 3 September 2013, the Company and Smart Concept Enterprise Limited, the current holder of the Convertible Notes, entered into the Deed of Variation to vary the terms and conditions of the Convertible Notes so as to permit the Company to early redeem all or part of the Convertible Notes at their face value before they are matured or converted into Shares.

Apart from the Proposed Amendment, all other terms and conditions of the Convertible Notes remain intact and unchanged. There is no restriction on early redemption of the Convertible Note following the taking effect of the Deed of Variation. Redemption would be by means of not less than 14 day’s prior written notice to the Noteholder given by the Company. Redemption is expected to be in multiples of not less than HK$1,000,000 each. The Noteholder does not have any right to request early redemption of the Convertible Notes before and after the Proposed Amendment. We consider the Company’s early redemption right under the Proposed Amendment is fair and reasonable and on normal commercial terms.

– 21 –

LETTER FROM INDEPENDENT FINANCIAL ADVISER

As mentioned above, the existing terms of the Convertible Notes do not allow for early redemption. We consider that the Proposed Amendment would provide an option for the Company to early redeem the Convertible Notes at its own discretion before the Maturity Date which is over 2 years away from the Latest Practicable Date, while all other terms and conditions of the Convertible Notes shall remain the same as discussed above. Furthermore, we note that if early redemption is made, it will be made at the face value of the Convertible Note with no penalty imposed. Since the Proposed Amendments would allow the benefits as discussed in section 2 of this letter, namely allowing the Group with more flexibility in managing its debt level and potential dilution to existing shareholders arising out of conversion of the Convertible Notes, with no apparent costs to the Group (save for costs related to seeking for Shareholders’ approval of the Proposed Amendment) and no impact to the financial position and operations of the Group, we consider the Proposed Amendment to be fair and reasonable to the Company and the Shareholders as a whole.

CONCLUSION

Having considered the above principal factors, we are of the opinion that the terms of the Proposed Amendment are fair and reasonable and in the interest of the Company and the Shareholders as a whole. In addition, we consider that the Deed of Variation is on normal commercial terms. Accordingly, we would recommend (i) the Independent Board Committee to advise the Independent Shareholders; and (ii) the Independent Shareholders, to vote in favour of the ordinary resolution to approve the Deed of Variation at the EGM.

Yours faithfully, For and on behalf of Ample Capital Limited H. W. Tang President

– 22 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests

As at the Latest Practicable Date, the interest or short position of the Directors and chief executive of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions, if any, which they were taken or deemed to have under such provisions of the SFO); (ii) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to in such provisions of the SFO; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules to be notified to the Company and the Stock Exchange were as follows:

Long positions in ordinary shares and underlying shares of the Company:

				Number of
				underlying
				shares held		% of total issue
			Number of	under equity		share capital
Name of Director	Capacity	Nature of interests	shares held	derivatives	Total	of the Company
YUEN Hoi Po	Interest of controlled	Corporate Interest	589,492,607	3,500,000,000	4,089,492,607	156.44
	corporation			(Note 1)	(Note 1)	(Note 2)
ZHANG Changsheng	Beneficial owner	Personal interest	–	20,000,000	20,000,000	0.77
				(Note 4)
Edward TIAN Suning	Interest of a controlled	Corporate Interest &	193,866,616	3,127,377	196,993,993	7.54
	corporation &	Personal interest	(Corporate)	(Personal)	(Note 3)
	Beneficial owner			(Note 4)
WEI Xin	Beneficial owner	Personal interest	–	2,000,000	2,000,000	0.08
				(Note 4)
WONG Yau Kar, David	Beneficial owner	Personal interest	–	2,000,000	2,000,000	0.08
				(Note 4)
YUEN Kin	Beneficial owner	Personal interest	–	2,000,000	2,000,000	0.08
				(Note 4)
CHU Yuguo	Beneficial owner	Personal interest	–	2,000,000	2,000,000	0.08
				(Note 4)

– 23 –

GENERAL INFORMATION

APPENDIX

Notes:

1. Mr. YUEN Hoi Po is deemed to be interested in 589,492,607 Shares held by his whollyowned corporations namely, Ming Bang Limited and Rich Public Limited. Mr. Yuen is also deemed to be interested in 3,500,000,000 Shares which fall to be allotted and issued by the Company following the exercise of the conversion rights attached to the zero coupon convertible note in the amount of RMB569 million (“Convertible Note”) held by Smart Concept Enterprise Limited which is a wholly-owned corporation of Mr. Yuen. The Convertible Note is underlying shares held under unlisted physically settled equity derivatives.

2. The figure is assuming full conversion of the Convertible Note. However, it is provided in the conditions of the Convertible Note that the relevant holder of the Convertible Note is only allowed to exercise the conversion rights only to the extent that (i) any conversion of the Convertible Note does not render the relevant holder of the Convertible Note who exercises the conversion rights and parties acting in concert with such holder to hold (whether directly or indirectly), together with any Shares already owned or agreed to be acquired by such holder of Convertible Note and parties acting in concert with it, representing 30% or more of the consequential enlarged issued ordinary share capital of the Company and (ii) any conversion of the Convertible Note will not lead to the public float being less than 25% of the consequential enlarged issued ordinary share capital of the Company at the date of the relevant exercise.

3. Mr. Edward TIAN Suning is deemed to be interested in 193,866,616 Shares held by CBC China Media Limited.

4. The number of underlying shares held under equity derivatives is the share options (being unlisted physically settled equity derivatives) granted by the Company.

Save as disclosed above, as at the Latest Practicable Date, so far as was known to the Directors, none of the Directors was a director or employee of a company which had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

(b) Substantial Shareholders’ interests

So far as is known to the Directors or chief executives of the Company, the following persons (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO were as follows:

– 24 –

GENERAL INFORMATION

APPENDIX

Long positions in ordinary shares and underlying shares of the Company:

				Number of		% of
				underlying		total issue
				shares held		share capital
			Number of	under equity		of the
Name of Shareholder	Capacity	Nature of interests	shares held	derivatives	Total	Company
Smart Concept Enterprise	Beneficial owner	Beneficial interest	–	3,500,000,000	3,500,000,000	133.89
Limited				(Note a)		(Note a)
Rich Public Limited	Beneficial owner_(Note b)_	Beneficial interest	589,492,607	–	589,492,607	22.55
Ming Bang Limited	Interest of a controlled	Corporate interest	589,492,607	–	589,492,607	22.55
	corporation_(Note c)_
Sun Hung Kai Structured	Beneficial owner_(Note d)_	Beneficial interest	–	3,500,000,000	3,500,000,000	133.89
Finance Limited
Sun Hung Kai & Co. Limited	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
Allied Properties (H.K.) Limited	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
Allied Group Limited	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
LEE Seng Hui	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
LEE Su Hwei	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
LEE Seng Huang	Interest of a controlled	Corporate interest	–	3,500,000,000	3,500,000,000	133.89
	corporation_(Note d)_
CBC China Media Limited	Beneficial owner_(Note e)_	Beneficial interest	193,866,616	–	193,866,616	7.42
HE Peng	Beneficial owner	Beneficial interest	150,000,000	–	150,000,000	5.74

Notes:

• a. The number of underlying shares held under equity derivates is the Convertible Note (being unlisted physically settled equity derivatives) issued by the Company to Smart Concept Enterprise Limited. Smart Concept Enterprise Limited is interested in 3,500,000,000 Shares which fall to be allotted and issued by the Company following the exercise of the conversion rights attached to the Convertible Note. However, it is provided in the conditions of the Convertible Note that the relevant holder of the Convertible Note is only allowed to exercise the conversion rights only to the extent that (i) any conversion of the Convertible Note does not render the relevant holder of the Convertible Note who exercises the conversion rights and parties acting in concert with such holder to hold (whether directly or indirectly), together with any Shares already owned or agreed to be acquired by such holder of Convertible Note and parties acting in concert with it, representing 30% or more of the consequential enlarged issued ordinary share capital of the Company and (ii) any conversion of the Convertible Note will not lead to the public float being less than 25% of the consequential enlarged issued ordinary share capital of the Company at the date of the relevant exercise. Mr. YUEN Hoi Po, the Chairman and an Executive Director of the Company, is beneficially interested in the entire issued share capital of Smart Concept Enterprise Limited. He is also a director of Smart Concept Enterprise Limited.

– 25 –

GENERAL INFORMATION

APPENDIX

• b. Rich Public Limited is an investment holding company incorporated in the British Virgin Islands and its entire issued share capital is beneficially owned by Ming Bang Limited.

• c. Ming Bang Limited is an investment holding company incorporated in the British Virgin Islands and its entire issued share capital is beneficially owned as to Mr. YUEN Hoi Po, the Chairman and an Executive Director of the Company. Mr. Yuen is also a director of Ming Bang Limited.

• d. Sun Hung Kai Structured Finance Limited is a wholly-owned subsidiary of Sun Hung Kai Financial Limited, a wholly-owned subsidiary of Sun Hung Kai & Co. Limited, which in turn is a non wholly-owned subsidiary of Allied Properties (H.K.) Limited. Allied Properties (H.K.) Limited is a non wholly-owned subsidiary of Allied Group Limited in which Mr. LEE Seng Hui, Ms. LEE Su Hwei and Mr. LEE Seng Huang are the trustees of the Lee and Lee Trust, having 65.02% interest in Allied Group Limited as at 11 June 2013. Accordingly, they are deemed to have the same long position as Sun Hung Kai Structured Finance Limited.

• e. CBC China Media Limited is an investment holding company incorporated in the British Virgin Islands. Mr. Edward TIAN Suning is the Non-executive Director of the Company and the director of CBC China Media Limited.

Save as disclosed above, as at the Latest Practicable Date, as so far is known to the Directors or chief executives of the Company, the Company had not been notified by any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the shares and underlying shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of part XV of the SFO.

3. DIRECTORS’ INTERESTS IN COMPETING BUSINESSES

As at the Latest Practicable Date, none of the Directors and their respective associates were considered to have interests in businesses apart from the Group’s businesses which compete, or are likely to compete, either directly or indirectly, with the businesses of the Group pursuant to Rule 8.10 of the Listing Rules.

4. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group.

– 26 –

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2012 (being the date to which the latest published audited accounts of the Group were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Group.

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save as disclosed in the Company’s announcements dated 28 June 2013 and 28 August 2013 respectively in respect of profit warning and the interim reports, the Directors were not aware of any material change in financial or trading position of the Group since 31 December 2012, being the date to which the latest published audited accounts of the Group were made up.

6. DIRECTORS’ SERVICE CONTRACTS

• (a) As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation (other than statutory compensation).

• (b) There are no service contracts in force between any Director and the Company or any of its subsidiaries or associated companies which are continuous contracts with a notice period of 12 months or more.

• (c) There are no service contracts in force between any Director and the Company or any of its subsidiaries or associated companies which are fixed term contracts with more than 12 months to run irrespective of the notice period.

7. LITIGATION

Save as disclosed below, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Group.

Beijing Hua Yi Hao Ge Media Culture Limited (“Hua Yi Hao Ge”), an indirect wholly-owned subsidiary of the Company, is a party to a possible litigation in the PRC whereby Hainan Haishi has obtained an order from the People’s Court of Yang Pu Economic Development Zone of Hainan Province to freeze its assets in connection with the allegation of an amount of RMB79.9 million alleged to be due from Hua Yi Hao Ge to Hainan Haishi. The alleged amount arose from the Group’s exclusive advertising agency business with Hainan Haishi before 31 December 2008, starting with the exclusive advertising agency agreement signed between the Group and Hainan Haishi dated 12 May 2006. The amount payable to Hainan Haishi has already been accrued in the Group’s consolidated financial statements since the year ended 31 December 2008, which has not yet been settled as of the interim balance sheet date. The Directors do not anticipate that any material liabilities will arise other than those provided for and believe that the Group has sufficient financial resources to discharge the debt.

– 27 –

GENERAL INFORMATION

APPENDIX

Hua Yi Hao Ge appealed against the Beijing Intermediate Court Ruling and the appeal was heard by the Beijing People’s High Court (北京市高級人民法院) (the “Beijing High Court”) on 1 December 2011. On 11 December 2011, the Beijing High Court ordered that the legal proceedings shall be discontinued pursuant to section 136(6) of the Civil Procedure Law of the PRC (中華人民 共和國民事訴訟法). Under the said section 136(6), the legal proceedings can be restored in accordance with the provisions thereof.

8. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular and ending on the Latest Practicable Date, the following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group which are or may be material:

• (i) Deed of Variation; and

• (ii) the framework agreement dated 1 August 2013 entered into between the Company, the Yan Feng People’s Government and the Investment Invitation Center in relation to the development of China Jiuhao (Haikou) Health Town in Haikou City, Hainan Province, particulars of which were disclosed in the Company’s announcement dated 1 August 2013;

• (iii) the sale and purchase agreement entered into between 中國9號產業(三亞)有限公司 and WANG Edward Dongqing on 4 June 2013 in relation to the acquisition of the entire equity interest in 三亞好運通農業科技有限公司, particulars of which were disclosed in the Company’s announcement dated 4 June 2013;

• (iv) the conditional sale and purchase agreement dated 17 April 2013 entered into between Aote Holding Limited, 深圳市恒信奧特投資發展有限公司, Effort Wonder Limited and the Company relating to the disposal of the loan and the entire issued share capital of Green Harmony Investments Limited and Green Villa Investments Limited, particulars of which were disclosed in the Company’s announcement dated 17 April 2013;

• (v) the strategic cooperation agreement dated 28 January 2013 entered in to between the Company and Tide Holdings (H.K.) Limited about the development of health industry especially regarding the development of health maintenance (養生) and retirement (養老) projects, particular of which were disclosed in the Company’s announcement dated 28 January 2013;

• (vi) the sale and purchase agreement dated 25 May 2012 made between Unique Talent Group Limited and Smart Concept Enterprise Limited in relation to the Acquisition as amended by the supplemental agreement dated 6 August 2012 entered into between the Unique Talent Group Limited and Smart Concept Enterprise Limited, particulars of which were disclosed in the announcement of the Company dated 6 August 2012; and

– 28 –

GENERAL INFORMATION

APPENDIX

• (vii) the warrant placing agreement dated 19 December 2011 entered into between the Company and SinoPac Securities (Asia) Limited whereby the Company appointed SinoPac Securities (Asia) Limited as the sole and exclusive placing agent to procure not less than six placees to subscribe for up to 550,000,000 unlisted Warrants, on best efforts basis, at the issue price of HK$0.005 per Warrant, and each Warrant entitles the holder thereof to subscribe for one warrant share at the initial exercise price of HK$0.10 per warrant share.

Save as disclosed above, there are no other contracts (not being contracts in the ordinary course of business) being entered into by the members of the Group within the two years immediately preceding the Latest Practicable Date, which are or may be material.

9. QUALIFICATIONS OF EXPERT

The following is the qualification of the expert or professional adviser who has given opinion or advice contained in this circular:

Name

Qualification

Ample Capital

a licensed corporation to carry on type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

10. INTERESTS AND CONSENTS OF EXPERT

As at the Latest Practicable Date, Ample Capital did not have:

• (a) any shareholding in any member of the Group, or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

• (b) was not interested, directly or indirectly, in any assets which had been acquired or disposed of by or leased to, or proposed to be acquired or disposed of by or leased to, any member of the Group since 31 December 2012, being the date to which the latest published audited consolidated accounts of the Group were made up.

Ample Capital has given and has not withdrawn its written consents to issue of this circular with the inclusion herein of its letter, advice and/or report and the reference to its name in the form and context in which it appear. The letter, recommendation and/or report given by Ample Capital is given as at the date of this circular for incorporation herein.

– 29 –

GENERAL INFORMATION

APPENDIX

11. GENERAL

• (a) The registered office of the Company is Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111, Cayman Islands.

• (b) The principal office in Hong Kong of the Company is Suite 3503, 35/F, Tower Two, Lippo Centre, 89 Queensway, Hong Kong.

• (c) The secretary of the Company is Mr. HAU Wai Man, Raymond.

• (d) The share registrar and transfer office of the Company is Tricor Tengis Limited, 26/F, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (e) This circular is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail.

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. (except Saturdays and public holidays) at the principal place of business in Hong Kong of the Company at Suite 3503, 35/F, Tower Two, Lippo Centre, 89 Queensway, Hong Kong from the date of this circular up to and including the date of the EGM:

• (a) the Memorandum and articles of association of the Company;

• (b) the material contracts referred to under the paragraph headed “Material Contracts” in this Appendix;

• (c) the Independent Financial Adviser’s letter included in this circular;

• (d) the annual report of the Company for the year ended 31 December 2012;

• (e) the written consent referred to under “Interests and Consents of Expert” in this Appendix;

• (f) the Deed of Variation; and

• (g) this circular.

– 30 –

NOTICE OF EGM

==> picture [297 x 116] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 419)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Jiuhao Health Industry Corporation Limited (the “Company”) will be held at Plaza 1-2, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Wednesday, 16 October 2013 at 10:00 a.m. for the purpose of considering and if thought fit, passing, with or without modifications, the following resolution which will be proposed as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT :

• (a) the deed of variation entered into between the Company and Smart Concept Enterprise Limited (the “Deed of Variation”) dated 3 September 2013, a copy of which marked “A” has been produced to the meeting and signed by the Chairman of the meeting for the purpose of identification, be and is hereby approved, confirmed and ratified; and

• (b) any two directors of the Company or any director and the company secretary where the related document(s) shall be under seal be and are hereby authorised to take all actions and sign, execute and deliver all such documents for and on behalf of the Company as they may consider necessary or desirable for the purpose of effecting or implementing the Deed of Variation.”

By Order of the Board

China Jiuhao Health Industry Corporation Limited YUEN Hoi Po Chairman

Hong Kong, 27 September 2013

As at the date of this circular, the Board comprises Executive Directors: Mr. YUEN Hoi Po (Chairman), Mr. ZHANG Changsheng (Vice Chairman) Non-executive Directors: Mr. Edward TIAN Suning, Mr. Hugo SHONG Independent Non-executive Directors: Professor WEI Xin, Dr. WONG Yau Kar David, BBS, JP, Mr. YUEN Kin, Mr. CHU Yuguo

– 31 –

NOTICE OF EGM

Notes:

• (i) A member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy needs not be a member of the Company.

• (ii) Where there are joint holders of any share of the Company, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such share as if he/she was solely entitled thereto, but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the Register of Members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

• (iii) The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of attorney or authority, must be lodged with the company’s Share Registrar, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong for registration not less than 48 hours before the time appointed for holding the meeting.

• (iv) Completion and return of the form of proxy will not preclude a member from attending the meeting and voting in person at the meeting or any adjournment thereof if he/she so desires. If a member attends the meeting after having deposited the form of proxy, his/her form of proxy will be deemed to have been revoked.

– 32 –