Du Du Holdings Limited — Proxy Solicitation & Information Statement 2008

Mar 12, 2008

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Core Healthcare Investment Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, makes no representation as to its accuracy or completeness and expressly disclaims 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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CORE HEALTHCARE INVESTMENT HOLDINGS LIMITED 確思醫藥投資控股有限公司[*]

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 8250)

(I) MAJOR TRANSACTION IN RELATION TO INVESTMENT IN A JOINT VENTURE;

(II) ADVANCE TO AN ENTITY; AND

(III) RE-ELECTION OF DIRECTOR

Financial adviser to Core Healthcare Investment Holdings Limited

CIMB-GK Securities (HK) Limited

A notice convening the EGM of the Company to be held at Rooms 609–610, 6/F, Nan Fung Tower, 173 Des Voeux Road Central, Hong Kong on Monday, 31 March 2008 at 10:00 a.m. is set out on pages 71 to 72 of this circular. The form of proxy for use at the EGM is enclosed. Whether or not you are able to attend, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not later than 48 hours before the time appointed for the holding of such meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at such meeting or any adjournment thereof should you so wish.

13 March 2008

• for identification purpose only

CHARACTERISTICS OF GEM

GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the main board and no assurance is given that there will be a liquid market in the securities traded on GEM.

The principal means of information dissemination on GEM is publication on the internet website operated by the Stock Exchange. Listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website at www.hkgem.com in order to obtain up-to-date information on GEM-listed issuers.

– i –

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM	THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I	– FINANCIAL INFORMATION ON THE GROUP . . . . . . . . . . . . . .	12
APPENDIX II	– UNAUDITED PRO FORMA FINANCIAL INFORMATION
	ON THE ENLARGED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
**APPENDIX III **	– DETAILS OF DIRECTOR PROPOSED
	FOR RE-ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	61
**APPENDIX IV **	– GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	62
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		71

– ii –

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the meanings set out below:

“Announcement”	the announcement of the Company dated 21 February	the announcement of the Company dated 21 February
	2008 in relation to the Co-operation Agreement and
	the transactions contemplated thereunder including the
	making of the Deposit
“Articles of Association”	the articles of association of the PRC Company to be
	adopted by its shareholders upon its conversion into
	a joint venture company owned as to 51% and 49% by
	the Company and Xizang Medicine respectively
“Board”	the board of Directors
“Capital Injection”	injection of approximately RMB200 million (equivalent
	to approximately HK$217.4 million) by the Company
	to the PRC Company pursuant to the terms of the Co-
	operation Agreement and the Investment Agreement
“Class 1 New Drug”	Natriuretic Peptide (凍干重組人腦利納	) and all
	rights and obligations in relation thereto
“Class 1 New Drug Business”	the development, manufacture and sale of	the Class 1
	New Drug in the PRC
“Company”	Core Healthcare Investment Holdings Limited, a
	company incorporated in the Cayman Islands with
	limited liability and the issued Shares of	which are
	listed on GEM
“connected person”	has the meaning ascribed to that term under the GEM
	Listing Rules
“Co-operation Agreement”	an unconditional legally binding agreement entered
	into between the Company and Xizang Medicine on
	18 February 2008 in respect of the Capital Injection
“Deposit”	RMB20 million (equivalent to approximately HK$21.7
	million) to be paid by the Company into the Joint
	Account by 18 March 2008 pursuant to the terms of
	the Co-operation Agreement
“Director(s)”	the director(s) of the Company
“Enlarged Group”	the Group after completion of the Capital Injection

– 1 –

DEFINITIONS

“EGM”	an extraordinary general meeting of the Company to
	be convened to consider, and if thought fit, to approve
	the Co-operation Agreement and the transactions
	contemplated thereunder and the re-election of a
	Director
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company and its subsidiaries as at the Latest
	Practicable Date
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Investment Agreement”	an agreement to be entered into among the Company,
	Xizang Medicine and the PRC Company in respect of
	the Capital Injection
“Joint Account”	an account to be set up and jointly held by the
	Company and Xizang Medicine
“Joint Venture Agreement”	a joint venture agreement to be entered into among
	the Company, Xizang Medicine and the PRC Company
	in respect of the governance of the PRC Company upon
	its conversion into a joint venture owned as to 51%
	and 49% by the Company and Xizang Medicine
	respectively
“Latest Practicable Date”	11 March 2008, being the latest practicable date prior
	to the printing of this circular for the purpose of
	ascertaining certain information contained herein
“PRC”	the Peoples’ Republic of China, which for the purpose
	of this circular excludes Hong Kong, the Macau Special
	Administrative Region and Taiwan
“PRC Company”	a domestic company to be established in the PRC by,
	and as a wholly-owned subsidiary of, Xizang Medicine,
	which will be converted into a sino-foreign equity joint
	venture to be owned as to 49% and 51% by Xizang
	Medicine and the Company respectively upon the
	completion of the Capital Injection

“RMB”

Reminbi, the lawful currency of the PRC

– 2 –

DEFINITIONS

ordinary share(s) of the nominal value of HK$0.001 each in the share capital of the Company

“Share(s)” “Shareholder(s)”

“Shareholder(s)” holder(s) of Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “Xizang Medicine” 西藏諾迪康藥業股份有限公司 (Xizang Rhodiola Pharmaceutical Co., Ltd.), a company established in the PRC whose shares are listed on the Shanghai stock exchange “HK$” Hong Kong dollars, the lawful currency of Hong Kong “%” per cent.

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LETTER FROM THE BOARD

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CORE HEALTHCARE INVESTMENT HOLDINGS LIMITED 確思醫藥投資控股有限公司[*]

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 8250)

Executive Director: Mr. Lui Chi Wah, Johnny Mr. Wu Kai

Non-executive Director: Mr. Lau Kam Shan

Independent non-executive Director: Mr. Kwok Shun Tim Mr. Chan Po Kwong Mr. Lam Yan Wing

Registered office: Ugland House, PO Box 309GT South Church Street, Grand Cayman Cayman Islands

Head office and principal place of business in Hong Kong: Room 609-610, 6/F Nan Fung Tower 173 Des Voeux Road Central Hong Kong

13 March 2008

To the Shareholders, and for information only, holders of the Share Options of the Company

Dear Sir or Madam,

(I) MAJOR TRANSACTION IN RELATION TO INVESTMENT IN A JOINT VENTURE; (II) ADVANCE TO AN ENTITY; AND

(III) RE-ELECTION OF DIRECTOR

INTRODUCTION

As stated in the Announcement, on 18 February 2008, the Company entered into the Co-operation Agreement with Xizang Medicine, pursuant to which the Company agreed in principle to co-operate with Xizang Medicine to undertake the Class 1 New Drug Business through the PRC Company, a joint venture to be established and owned as to 51% and 49% by the Company and Xizang Medicine respectively. The Company agreed to invest an aggregate of approximately RMB200 million (equivalent to approximately HK$217.4 million), in the form of registered capital, in the PRC Company and to pay the Deposit into the Joint Account by 18 March 2008 pursuant to the terms of the Co-operation Agreement.

• for identification purpose only

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LETTER FROM THE BOARD

The Company will enter into the Investment Agreement in respect of the detailed terms of the Capital Injection with Xizang Medicine and the PRC Company. Upon completion of the Capital Injection, the Company will own 51% interest in the registered capital of the PRC Company.

Pursuant to Rule 19.06 of the GEM Listing Rules, the Co-operation Agreement and the transactions contemplated thereunder as a whole constitute a major transaction for the Company and are subject to the approval of the Shareholders.

The payment of the Deposit, which is expected to occur by 18 March 2008, will constitute an advance to an entity pursuant to Rule 17.15 of the GEM Listing Rules and relevant details were set out in the Announcement.

The purpose of this circular is to provide you with, among other things, further details of the Co-operation Agreement and a notice convening the EGM. A resolution will also be proposed at the EGM for the re-election of a Director.

CO-OPERATION AGREEMENT

Date

18 February 2008

Parties

• (i) the Company; and

• (ii) Xizang Medicine.

Xizang Medicine is a company established in the PRC whose shares are listed on the Shanghai stock exchange. The principal business activities of Xizang Medicine are the manufacture and sale of pharmaceutical products in the PRC.

To the best knowledge, information and belief of the Directors after making all reasonable enquiries:

• (a) Xizang Medicine and its ultimate beneficial owners are third parties independent of the Group and connected persons of the Company;

• (b) Xizang Medicine and its ultimate beneficial owners have no relationship with, and are not parties acting in concert (as defined in the Takeovers Code) with each of the Company, Precious Success Group Limited (“Precious Success”), Hong Kong Health Check and Laboratory Holdings Company Limited (“HK Health Check”) and Town Health International Holdings Company Limited (“Town Health”); and

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LETTER FROM THE BOARD

• (c) there was no previous transaction between Xizang Medicine and each of the Company, Precious Success, HK Health Check, Town Health and their respective concert parties, and the Placee and the Referral Agent (“Referral Agent”) (both as defined in the Company’s announcement dated 15 November 2007).

Subject Matter

Pursuant to the terms of the Co-operation Agreement, the Company has agreed in principle to co-operate with Xizang Medicine to undertake the Class 1 New Drug Business through a joint venture to be established and owned as to 51% and 49% by the Company and Xizang Medicine respectively.

Pursuant to the terms of the Co-operation Agreement, the Company will pay the Deposit into the Joint Account by 18 March 2008 and Xizang Medicine has agreed to undertake the following arrangements within the time period indicated:

Proposed action

Indicative timing

1. Establish the PRC Company as a wholly-owned subsidiary of Xizang Medicine with a registered capital of approximately RMB192 million (equivalent to approximately HK$208.7 million) to be satisfied by the injection of the Class 1 New Drug by Xizang Medicine (the “First Milestone”).

2. 31 March 2008

3. Arrange for an increase of the registered capital of the PRC Company to approximately RMB392 million (equivalent to approximately HK$426.1 million).

4. Within two months after the establishment of the PRC Company

5. Enter into the Investment Agreement and other related agreements with the Company and the PRC Company to effect the Company’s investment in the 51% equity interest of the PRC Company.

Within two months after the establishment of the PRC Company

1. Enter into a rental and management agreement with the PRC Company in respect of the rental and management of the production lines and facilities in respect of the Class 1 New Drug Business. Separate announcement(s) will be made by the Company, as and when necessary, pursuant to the requirements under the GEM Listing Rules.

31 March 2008

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LETTER FROM THE BOARD

Proposed action

Indicative timing

1. Obtain all necessary approvals from the relevant PRC authorities in respect of the Capital Injection and the conversion of the PRC Company from a PRC domestic company into a sino-foreign equity joint venture.

31 July 2008

1. Register the Capital Injection and the conversion of the PRC Company into a sino-foreign equity joint venture with the relevant PRC governmental authorities.

Class 1 New Drug

Natriuretic Peptide is a genetic engineering product of human brain and a newly discovered drug which is a potent cardiac drug, and has proven clinical value in heart failure patient. Its relatively safe profile makes it a good treatment modality for many heart diseases.

Based on the valuation report prepared by Grant Sherman Appraisal Limited (“Grant Sherman”), an independent valuer, the fair market value of the Class 1 New Drug as of 31 January 2008 was approximately RMB201.2 million. One of the officers responsible for the valuation is an Accredited Senior Appraiser of the American Society of Appraisers (Business Valuation). In arriving at the fair market value of the Class 1 New Drug, Grant Sherman has applied the relief from royalty approach under the Uniform Standard of Professional Appraisal Practice, a standard generally adopted in the United States of America, which takes into account the future trading prospects and level of turnover likely to be achieved by the PRC Company. To this estimation, an appropriate annual present value discount rate has been applied to arrive at the indicated fair market value. In arriving at the fair market value, Grant Sherman has made certain key assumptions, including (i) the political, legal and economic stability in the PRC; (ii) no major and material changes in the current taxation law, exchange rates and interest rates; and (iii) no major changes in the industry trends and market conditions for related industries in the PRC; and (iv) no significant deviation in the actual results from the business plan prepared by the Company.

Grant Sherman considers that, in general, there are three commonly used approaches to value intellectual properties, namely the relief from royalty method, the excess earnings method, and premium profits method. After Grant Sherman’s detailed analyses, they are of the view that the most appropriate approach is the relief from royalty approach since there is insufficient data to employ the other two valuation methods.

Deposit and Termination

The Company will pay the Deposit in the amount of RMB20 million (equivalent to approximately HK$21.7 million) into the Joint Account by 18 March 2008 pursuant to the terms of the Co-operation Agreement. The Deposit will be funded by the internal resources of the Group. The Deposit is interest-free, unsecured, and has no fixed term of repayment

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LETTER FROM THE BOARD

save for the Company’s right to request for a refund under the circumstances mentioned below.

The Company has the right to terminate the Co-operation Agreement and request for a refund of the Deposit upon the occurrence of any of the following circumstances:

• (i) Xizang Medicine fails to establish the PRC Company in accordance with the First Milestone;

• (ii) the relevant drug certificate(s) and production approval(s) for the Class 1 New Drug cannot be obtained or the relevant certificate(s) and/or approval(s) has (have) been revoked for whatsoever reason;

• (iii) the Class 1 New Drug fails to be produced due to technical reason;

• (iv) the Class 1 New Drug losses its medical effect or clinical evidence shows that it has major side effect(s);

• (v) the Class 1 New Drug fails to be manufactured and sold for whatsoever reason; and

• (vi) the Class 1 New Drug fails to be injected into the PRC Company for whatsoever reason.

Upon completion of the Investment Agreement, the Deposit will be released from the Joint Account and will be used to satisfy part of the Company’s investment commitment to the PRC Company.

Capital Injection

The Capital Injection is subject to the fulfillment of, among other things, the following conditions:

• (i) the obtaining of all necessary corporate approval and the approval of all necessary authorities by the Company and Xizang Medicine in respect of the signing of the Co-operation Agreement and the performance of their obligations thereunder;

• (ii) a legal and financial due diligence on the PRC Company does not reveal that (a) the PRC Company is involved in any material litigation or claim; or (b) any or all documents in relation to the Class 1 New Drug contain any material misstatement;

• (iii) the entering into of the Investment Agreement, the Joint Venture Agreement and the Articles of Association by the Company, Xizang Medicine and the PRC Company, pursuant to the terms of the Co-operation Agreement;

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LETTER FROM THE BOARD

• (iv) the passing of an ordinary resolution by the Shareholders at the EGM approving the Co-operation Agreement and the transactions contemplated thereunder;

• (v) Xizang Medicine has paid up its share of investment into the PRC Company as verified by a PRC registered accountant;

• (vi) the assignment of the Class 1 New Drug to the PRC Company in compliance with applicable PRC laws; and

• (vii) the obtaining of all necessary PRC authorities approval in respect of the amount and the mode of the Company’s investment in the PRC Company.

Pursuant to the Investment Agreement, the total capital commitment of the Company shall be approximately RMB200 million (equivalent to approximately HK$217.4 million). Subject to the fulfillment of all the above conditions, the Deposit of RMB20 million (equivalent to approximately HK$21.7 million) will be released from the Joint Account and be used to satisfy part of the Company’s investment in the PRC Company. In addition, the Company will contribute an additional amount of approximately RMB180 million (equivalent to approximately HK$195.7 million), which will be funded by the internal resources of the Group, in cash into the PRC Company in the following manner:

Payment

Indicative timing

RMB80 million (equivalent to approximately HK$87.0 million)

Within 10 days after the approval of the Investment Agreement, Joint Venture Agreement and the Articles of Association by the relevant PRC authorities (the “First Payment Date”)

RMB50 million (equivalent to approximately HK$54.3 million)

Subject to the registration of the Capital Injection and the conversion of the PRC Company into a sino-foreign equity joint venture with the relevant PRC authorities, within 6 months after the First Payment Date (the “Second Payment Date”)

Approximately RMB50 million (equivalent to approximately HK$54.3 million)

Within 6 months after the Second Payment Date

The Company will enter into the Investment Agreement, the Joint Venture Agreement and the Articles of Association with Xizang Medicine and the PRC Company in respect of the detailed terms of the Capital Injection and the operation of the PRC Company as a joint venture between the Company and Xizang Medicine.

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LETTER FROM THE BOARD

PRINCIPAL BUSINESS OF THE GROUP

The Group is principally engaged in the provision of diagnostic testing services and products and related research and development, investment holding, and sales of health food and pharmaceutical products.

FINANCIAL EFFECT OF THE CO-OPERATION AGREEMENT

The Directors currently expect that, after the completion of the Capital Injection, the PRC Company would be held as to 51% by the Company and would be accounted for as a subsidiary of the Company. Please refer to Appendix II: Unaudited Pro Forma Financial Information on the Enlarged Group for details of the financial effect on the total assets and the total liabilities of the Group immediately after the completion of the Capital Injection.

The Company expects no material effect on the Enlarged Group’s earnings immediately after the completion of the Capital Injection.

REASONS FOR THE CO-OPERATION AGREEMENT

Reference is made to the joint announcement dated 15 November 2007 issued by the Company, HK Health Check and Town Health in relation to, among other things, the fund raising exercises of the Group and its potential investment in Class 1 New Drug. The Directors intend to apply part of the proceeds from such fund raising exercise to finance the Capital Injection. The Directors are of the view that through the entering into of the Co-operation Agreement and the Investment Agreement with Xizang Medicine, which was referred to the Company by the Referral Agent under the Referral Agreement referred to in the above-mentioned joint announcement, the Company will, through the PRC Company which would become its 51% owned subsidiary, be able to participate in the Class 1 New Drug Business, and tap into the pharmaceutical industry in the PRC, which the Directors believe will offer good financial return to the Group.

RE-ELECTION OF DIRECTOR

The Board currently comprises six Directors, namely Mr. Lui Chi Wah, Johnny, Mr. Wu Kai, Mr. Lau Kam Shan, Mr. Kwok Shun Tim, Mr. Chan Po Kwong and Mr. Lam Yan Wing.

Pursuant to Article 115 of the articles of association of the Company, Dr. Hui Ka Wah Ronnie JP who was appointed by the Board during the current year shall hold office only until the next following general meeting of the Company, and being eligible, he has offered himself for re-election.

Details of Dr. Hui Ka Wah Ronnie JP , the Director proposed for re-election at the EGM, are set out in Appendix III of this circular.

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LETTER FROM THE BOARD

IMPLICATIONS UNDER THE LISTING RULES

Pursuant to Rule 19.38 of the GEM Listing Rules, the Co-operation Agreement and the transactions contemplated as a whole constitute a major transaction for the Company and are required to be approved by the Shareholders at the EGM.

The payment of the Deposit, which is expected to occur by 18 March 2008, will also constitute an advance to an entity pursuant to Rule 17.15 of the GEM Listing Rules and relevant details were set out in the Announcement.

EGM

The Company will convene the EGM at Rooms 609–610, 6/F, Nan Fung Tower, 173 Des Voeux Road Central, Hong Kong on Monday, 31 March 2008, at 10:00 a.m. at which ordinary resolutions will be proposed for the purpose of considering and, if thought fit, approving the major transaction in relation to the Co-operation Agreement and the transactions contemplated thereunder and the re-election of a Director. No Shareholder is required to abstain from voting at the EGM.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you propose to attend and vote at the EGM in person, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM, or any adjourned meeting, should you so wish.

RECOMMENDATION

The terms of the Co-operation Agreement were arrived at after arm’s length negotiations between the Company and Xizang Medicine with reference to the capital to be contributed to the PRC Company (by the transfer of the Class 1 New Drug) by Xizang Medicine. The Directors consider the terms of the Co-operation Agreement are fair and reasonable and in the interest of the Company and the Shareholders as a whole and recommend the Shareholders to vote for the resolution to approve the Co-operation Agreement and the transactions contemplated thereunder and the re-election of a Director at the EGM.

By order of the Board of

Core Healthcare Investment Holdings Limited Lui Chi Wah, Johnny

Chairman

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APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

I. SUMMARY OF FINANCIAL INFORMATION FOR EACH OF THE THREE YEARS ENDED 30 JUNE 2007 AND THE SIX MONTHS ENDED 31 DECEMBER 2007

The following is a summary of the financial results of the Group for each of the three years ended 30 June 2007 and the six months ended 31 December 2007 as extracted from the annual reports of the Company for the three years ended 30 June 2007 and the interim report of the Company for the six months ended 31 December 2007.

Turnover Cost of sales Gross profit Other income Selling and distribution expenses Administration expenses Other operating expenses Profit/(Loss) before tax Income tax expense Profit/(Loss) for the period attributable to equity holders of the Company Earning/(loss) per share – basic_(note 3) – diluted(note 4)_ Dividend per share	For the 2005 HK$ (audited) 1,133,297 (1,048,689) 84,608 596,679 681,287 (556,026) (4,097,754) (1,618,180) (5,590,673) – (5,590,673) (1.62 cents) N/A Nil	year ended 30 June 2006 2007 HK$ HK$ (audited) (audited) 1,368,404 1,297,939 (1,308,230) (1,087,647) 60,174 210,292 1,182,374 16,417,159 1,242,548 16,627,451 (510,437) (137,676) (4,737,887) (5,264,743) (5,564,684) (1,437,646) (9,570,460) 9,787,386 – (1,391,000) (9,570,460) 8,396,386 (2.55 cents) 2.23 cents N/A 2.22 cents Nil Nil	For the six months ended 31 December 2007 HK$ (unaudited) 739,783 (542,626) 197,157 2,788,650 2,985,807 (9,726) (3,223,601) (193,535) (441,055) – (441,055) (0.007 cents) (0.007 cents) Nil

– 12 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Non-current assets Current assets Total assets Current liabilities Non-current liabilities Total liabilities Net assets	Assets and liabilities of the Group As at 30 June 2005 2006 2007 HK$ HK$ HK$ (audited) (audited) (audited) 4,110,820 2,421,980 3,256,023 33,429,118 26,094,751 37,537,520 37,539,938 28,516,731 40,793,543 546,602 652,935 2,738,165 – – – 546,602 652,935 2,738,165 36,993,336 27,863,796 38,055,378	For the six months ended 31 December 2007 HK$ (unaudited) 3,051,162 94,844,166
		97,895,328
		2,407,202 –
		2,407,202
		95,488,126

Notes:

• (1) The reports of the auditors in respect of the financial statements of the Group for each of the three years ended 30 June 2007 issued by RSM Nelson Wheeler did not contain any qualification.

• (2) There was no profit or loss attributable to minority interest and no extraordinary or exceptional item during the three years ended 30 June 2007 and the six months ended 31 December 2007.

• (3) The calculation of the basic earnings/loss per share for each of three years ended 30 June 2007 is based on (i) the loss attributable to the equity holders of the Company of HK$5,590,673 for the year ended 30 June 2005; (ii) the loss attributable to the equity holders of the Company of HK$9,570,460 for the year ended 30 June 2006; and (iii) the profit attributable to the equity holders of the Company of HK$8,396,386 for the year ended 30 June 2007 and on the weighted average number of (i) 345,897,501 ordinary shares in issue during the year ended 30 June 2005; (ii) 375,982,170 ordinary shares in issue during the year ended 30 June 2006; and (iii) 375,883,507 ordinary shares in issue during the year ended 30 June 2007. The calculation of the basic loss per share for the six months ended 31 December 2007 is based on the unaudited loss for the six months ended 31 December 2007 attributable to the equity holders of the Company of HK$441,055 and the weighted average number of Subdivided Shares of 6,103,931,920 in issue during the period after adjusting for the effect on the Share Subdivision.

• (4) The computation of diluted loss per share for the years ended 30 June 2005 and 2006 has not been presented because the assumed exercises of share options, which were outstanding during the years, had anti-dilutive effects on the basic loss per share. The calculation of the diluted earnings per share for the year ended 30 June 2007 is based on the profit attributable to equity holders of the Company of HK$8,396,386 and the weighted average number of 379,036,662 shares, being the weighted average number of ordinary shares outstanding during the year, adjusted for the effects on assumed exercise of share options. The calculation of diluted loss per share for the six months ended 31 December 2007 is based on the unaudited loss for the corresponding period attributable to equity holder of the Company of HK$441,055 and 6,149,574,900 Subdivided Shares, being the weighted average number of Subdivided Shares outstanding during the period, adjusted for the effects on the Share Subdivision and potential shares issued upon exercise of share options.

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APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

II. AUDITED FINANCIAL INFORMATION FOR THE YEAR ENDED 30 JUNE 2007

The following is the audited financial statements of the Group for the year ended 30 June 2007 as extracted from the annual report of the Company for the year ended 30 June 2007.

Consolidated Income Statement

For the year ended 30 June 2007

Note Turnover 6 Cost of sales Gross profit Other income 7 Selling and distribution expenses Administration expenses Other operating expenses Profit/(Loss) before tax Income tax expense 9 Profit/(Loss) for the year attributable to equity holders of the Company 10 Earnings/(Loss) per share – basic 14 – diluted	2007 HK$ 1,297,939 (1,087,647) 210,292 16,417,159 16,627,451 (137,676) (5,264,743) (1,437,646) 9,787,386 (1,391,000) 8,396,386 2.23 cents 2.22 cents	2006 HK$ 1,368,404 (1,308,230) 60,174 1,182,374 1,242,548 (510,437) (4,737,887) (5,564,684) (9,570,460) – (9,570,460) (2.55 cents) N/A

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APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Consolidated Balance Sheet

As at 30 June 2007

Note Non-current assets Intangible assets 15 Property, plant and equipment 16 Current assets Inventories 17 Trade and other receivables 18 Financial assets at fair value through profit or loss 19 Cash and bank balances 20 Current liabilities Trade and other payables 21 Current tax liabilities Net current assets Net assets Capital and reserves Share capital 23 Reserves Total equity	2007 HK$ – 3,256,023 3,256,023 100,527 18,051,965 15,262,864 4,122,164 37,537,520 1,347,165 1,391,000 2,738,165 34,799,355 38,055,378 3,825,920 34,229,458 38,055,378	2006 HK$ – 2,421,980
		2,421,980
		44,846 612,568 7,398,530 18,038,807
		26,094,751
		652,935 –
		652,935
		25,441,816
		27,863,796
		3,735,920 24,127,876
		27,863,796

– 15 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Consolidated Statement of Changes in Equity

For the year ended 30 June 2007

Share capital HK$ Balance at 1 July 2005 3,830,760 Shares repurchase (94,840) Recognition of share-based payments – Loss for the year – Balance at 30 June 2006 and 1 July 2006 3,735,920 Issue of shares upon exercise of share options 90,000 Transfer of reserve upon exercise of share options – Transfer of reserve upon lapse of share options – Recognition of share-based payments – Profit for the year – Balance at 30 June 2007 3,825,920		Reserves	Reserves	Sub-total of reserves HK$ 33,162,576 (1,383,566) 1,919,326 (9,570,460) 24,127,876 919,900 – – 785,296 8,396,386 34,229,458	Total HK$ 36,993,336 (1,478,406) 1,919,326 (9,570,460) 27,863,796 1,009,900 – – 785,296 8,396,386 38,055,378
	Share premium HK$ 46,628,204 (1,383,566) – – 45,244,638 919,900 788,450 – – – 46,952,988	Share options reserve HK$ – – 1,919,326 – 1,919,326 – (788,450) (215,786) 785,296 – 1,700,386	Accumulated losses HK$ (13,465,628) – – (9,570,460) (23,036,088) – – 215,786 – 8,396,386 (14,423,916)

Nature and purpose of reserves

• (i) Share premium

Under the Companies Law (Revised) of the Cayman Islands, the funds in the share premium account are distributable to the shareholders of the Company provided that immediately following the date on which the dividend is proposed to be distributed, the Company will be in a position to pay off its debts as they all due in the ordinary course of business.

• (ii) Share options reserve

The Group has a share option scheme under which options to subscribe for the Company’s shares have been granted to certain directors, employees, other eligible participants and Chinese University as set out in note 24.

– 16 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Consolidated Cash Flow Statement

For the year ended 30 June 2007

CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss) before tax Adjustments for: Interest income Dividend income from listed investments Depreciation Loss/(Gain) on disposal of property, plant and equipment Amortisation of intangible assets Impairment losses of intangible assets Share-based payments expenses Fair value (gain)/loss of financial assets at fair value through profit or loss Gain on disposal of financial assets at fair value through profit or loss Write-off of inventories Write-off of property, plant and equipment Operating loss before working capital changes Increase in inventories (Increase)/Decrease in trade and other receivables Increase in trade and other payables Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant and equipment Payments for licences and patents Proceeds from disposal of property, plant and equipment Purchases of financial assets at fair value through profit or loss Proceeds from disposals of financial assets at fair value through profit or loss Dividend received from listed investments Interest received Net cash from/(used) in investing activities	2007 HK$ 9,787,386 (677,887) (85,383) 317,689 270,717 – – 785,296 (4,236,610) (11,362,631) 77,328 – (5,124,095) (133,009) (17,439,397) 694,230 (22,002,271) (1,422,449) – – (51,650,514) 59,385,421 85,383 677,887 7,075,728	2006 HK$ (9,570,460) (1,061,081) – 679,082 (108,000) 459,757 3,158,397 1,919,326 332,459 – – 133,127 (4,057,393) (11,332) 189,328 106,333 (3,773,064) (2,628,080) (113,443) 108,000 – – – 1,061,081 (1,572,442)

– 17 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares upon exercise of share options Shares repurchase Net cash from/(used in) financing activities NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances	2007 HK$ 1,009,900 – 1,009,900 (13,916,643) 18,038,807 4,122,164 4,122,164	2006 HK$ – (1,478,406) (1,478,406) (6,823,912) 24,862,719 18,038,807 18,038,807

– 18 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Notes to the Financial Statements

For the year ended 30 June 2007

1. GENERAL

The Company is incorporated as an exempted company with limited liability under the Companies Law of the Cayman Islands and its shares are listed on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The address of the registered office and principal place of business of the Company are disclosed in the “Corporate Information” of this annual report.

The Company is an investment holding company. The activities of its principal subsidiaries are set out in note 31 to the financial statements.

2. ADOPTION OF NEW AND REVISED HKFRSS

In the current year, the Group has adopted all the new and revised Hong Kong Financial Reporting Standards (“HKFRSs”), issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”) that are relevant to its operations and effective for accounting periods beginning on or after 1 January 2006, 1 May 2006 and 1 June 2006. The adoption of these new and revised HKFRSs did not result in substantial changes to the Group’s accounting polices and amounts reported for the current year and prior years.

The Group has not applied the new HKFRSs that have been issued but not yet effective. The application of these new HKFRSs will not have material impact on the financial statements of the Group.

3. SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with HKFRSs, accounting principles generally accepted in Hong Kong and the applicable disclosures required by the Rules Governing the Listing of Securities on the GEM of the Stock Exchange and by the Hong Kong Companies Ordinance.

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of investments which are carried at their fair values.

The preparation of financial statements in conformity with HKFRSs requires the use of certain key assumptions and estimates. It also requires management to exercise its judgements in the process of applying the accounting policies. The areas involving critical judgements and areas where assumptions and estimates are significant to these financial statements, are disclosed in note 4 to the financial statements.

The significant accounting policies applied in the preparation of these financial statements are set out below.

(a) Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 30 June. Subsidiaries are entities over which the Group has control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has control.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date the control ceases.

– 19 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

The gain or loss on the disposal of a subsidiary represents the difference between the proceeds of the sale and the Group’s share of its net assets together with any goodwill relating to the subsidiary which was not previously charged or recognised in the consolidated income statement and also any related accumulated foreign currency translation reserve.

Inter-company transactions, balances and unrealised profits on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Hong Kong dollars, which is the Company’s functional and presentation currency.

(ii) Transactions and balances in each entity’s financial statements

Transactions in foreign currencies are translated into the functional currency using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities in foreign currencies are translated at the rates ruling on the balance sheet date. Profits and losses resulting from this translation policy are included in the income statement.

Translation differences on non-monetary items, such as equity instruments classified as financial assets at fair value through profit or loss, are reported as part of the fair value gain or loss.

(c) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are expensed in the income statement during the period in which they are incurred.

Depreciation of property, plant and equipment is calculated at rates sufficient to write off their cost less their residual values over the estimated useful lives on a straight-line basis. The principal useful lives are as follows:

Laboratory equipment 5 years Leasehold improvements 5 years Office equipment, furniture and fixtures 2[1] /2 – 5 years Motor vehicles 5 years

The residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at each balance sheet date.

Construction in progress represents buildings under construction and plant and machinery pending installation, and is stated at cost less impairment losses. Depreciation begins when the relevant assets are available for use.

The gain or loss on disposal of property, plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant asset, and is recognised in the income statement.

– 20 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(d) Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease payments (net of any incentives received from the lessor) are expensed in the income statement on a straight-line basis over the lease term.

(e) Intangible assets

• (i) Research and development expenditure

Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally generated intangible asset is recognised only if all of the following conditions are met:

• An asset is created that can be identified;

• It is probable that the asset created will generate future economic benefit; and

The development cost of the asset can be measured reliably.

Internally generated intangible assets are measured initially at cost and are amortised on a straight-line basis over their estimated useful lives which generally do not exceed twenty years. Where no internally generated intangible asset can be recognised, development expenditure is charged to the income statement in the period in which it is incurred.

• (ii) Patents and licences

Patents and licences are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives of the relevant testing services of 7 to 15 years.

(f) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

In previous years, cost of inventories was determined using first-in, first-out basis. With the new operation of the Group’s retail business on 1 December 2006, cost of inventories is to be determined using weighted average method. Such change in accounting policy had no material effect on how the results for the current or prior accounting periods have been prepared and presented.

(g) Financial as sets at fair value through profit or loss

Financial assets at fair value through profit or loss are either investments held for trading or designated as at fair value through profit or loss upon initial recognition. These investments are subsequently measured at fair value. Gains or losses arising from changes in fair value of these investments are recognised in the income statement.

– 21 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(h) Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment. An allowance for impairment of trade and other receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the allowance is the difference between the receivables’ carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate computed at initial recognition. The amount of the allowance is recognised in the income statement.

Impairment losses are reversed in subsequent periods and recognised in the income statement when an increase in the receivables’ recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the receivables at the date the impairment is reversed shall not exceed what the amortised cost would have been had the impairment not been recognised.

(i) Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents represent cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term highly liquid investments which are readily convertible into known amounts of cash and subject to an insignificant risk of change in value.

(j) Trade and other payables

Trade and other payables are stated initially at their fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

(k) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

(l) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably.

Revenue from the sales of diagnostic testing services is recognised when the services are rendered.

Revenue from the sales of diagnostic testing products is recognised on the transfer of risks and rewards of ownership which generally coincide with the time when goods are delivered and title has passed.

Sales of health food and pharmaceutical products are recognised when goods are delivered and title has passed.

Dividend income from investments is recognised when the Group’s right to receive payment has been established.

Interest income is recognised as it accrues using the effective interest method.

– 22 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(m) Employee benefits

(i) Employee leave entitlements

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the balance sheet date.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

(ii) Pension obligations

The Group contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by the Group and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to the income statement represents contributions payable by the Group to the funds.

(n) Share-based payments

The Group issues equity-settled share-based payments to certain grantees. Equity-settled share-based payments are measured at fair value (excluding the effect of non marketbased vesting conditions) of the equity instruments at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

(o) Taxation

Income tax represents the sum of the current tax and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences, unused tax losses or unused tax credits can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

– 23 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(p)

Related parties

A party is related to the Group if:

• (i) directly or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the Group; has an interest in the Group that gives it significant influence over the Group; or has joint control over the Group;

• (ii) the party is an associate;

• (iii) the party is a joint venture;

• (iv) the party is a member of the key management personnel of the Company or its parent;

• (v) the party is a close member of the family of any individual referred to in (i) or (iv);

• (vi) the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (iv) or (v); or

• (vii) the party is a post-employment benefit plan for the benefit of employees of the Group, or of any entity that is a related party of the Group.

(q) Segment reporting

A segment is a distinguishable component of the Group that is engaged either in providing products and services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from those of other segments.

In accordance with the Group’s internal financial reporting, the Group has determined that business segments be presented as the primary reporting format and geographical as the secondary reporting format.

Segment revenue, expenses, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis to the segment. Unallocated costs mainly represent corporate expenses. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories and trade receivables. Segment liabilities comprise operating liabilities and exclude items such as tax liabilities.

Segment revenue, expenses, assets and liabilities are determined before intra-group balances and intra-group transactions are eliminated as part of the consolidation process, except to the extent that such intra-group balances and transactions are between Group enterprises within a single segment.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets (both tangible and intangible) that are expected to be used for more than one period.

(r) Impairment of assets

At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets, except investments, inventories and receivables, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.

– 24 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(s) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Group has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

(t) Events after the balance sheet date

Events after the balance sheet date that provide additional information about the Group’s position at the balance sheet date or those that indicate the going concern assumption is not appropriate are adjusting events and are reflected in the financial statements. Events after the balance sheet date that are not adjusting events are disclosed in the notes to the financial statements when material.

4. CRITICAL JUDGEMENTS AND KEY ESTIMATES

In the process of applying the Group’s accounting policies described in note 3 to the financial statements, management has made estimates and assumptions concerning the future. The estimates and assumptions that have significant impact on changes in value of carrying amounts of the most significant amounts of assets/liabilities are discussed below:

(a) Licences, patents and development costs

Determining whether licences and patents and development costs are impaired requires an estimation of the recoverable amount through future commercial activity which requires the Group to estimate the future cash flows expected to arise from the developed services and products. Impairment losses may arise when actual cash flows are less than expected.

Impairment losses of licences and patents and development costs amounted to HK$1,156,672 and HK$2,001,725 respectively have been charged to the consolidated income statement for the year ended 30 June 2006.

– 25 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(b) Share-based payment expenses

The fair value of the share options granted to the directors, employees and other eligible participants determined at the date of grant of the respective share options is expensed over the vesting period, with a corresponding adjustment to the Group’s share-based payment reserve. In assessing the fair value of the share options, the Black-Scholes option pricing model (the “Black-Scholes Model”) was used. The Black-Scholes Model is one of the generally accepted methodologies used to calculate the fair value of the share options. The Black-Scholes Model requires the input of subjective assumptions, including the expected dividend yield and expected life of options. Any changes in these assumptions can significantly affect the estimate of the fair value of the share options.

5.

FINANCIAL RISK MANAGEMENT

The Group’s activities expose itself to different kinds of financial risk. The management has been monitoring these risk exposures to ensure appropriate measures are implemented on a timely and effective manner so as to mitigate or reduce such risks.

(a) Currency risk

The Group has certain assets, liabilities and transactions denominated in foreign currency and is exposed to foreign currency risk. The Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise.

(b) Interest rate risk

The Group’s exposure to change in interest rates is mainly attributable to its bank balances. Bank balances expose the Group to cash flow interest-rate risk. The Group currently does not have an interest rate hedging policy. However, management monitors interest rate exposure and will consider hedging significant interest rate exposure should the need arise.

(c) Credit risk

The Group’s maximum exposure to credit risk in the event of counterparties failure to perform their obligations as at 30 June 2007 in relation to each class of recognised financial assets is the carrying amount of those assets as stated in the consolidated balance sheet. The Group has no significant concentration of credit risk, with exposure spread over a number of counterparties and customers.

(d) Price risk

The Group’s financial assets at fair value through profit or loss are measured at fair value at each balance sheet date. Therefore, the Group is exposed to debt security price risk. The management manages this exposure by maintaining a portfolio of investments with different risk profiles.

(e) Fair values

The carrying amounts of the Group’s financial assets as reflected in the consolidated balance sheet approximate their respective fair values.

(f) Liquidity risk

The Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term.

– 26 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

6. TURNOVER

The Group’s turnover represents turnover arising on sales of diagnostic testing services and products, and sales of health food and pharmaceutical products. An analysis of the Group’s turnover for the year is as follows:

Sales of diagnostic testing services and products Sales of health food and pharmaceutical products	2007 HK$ 1,148,009 149,930 1,297,939	2006 HK$ 1,368,404 –
		1,368,404

7. OTHER INCOME

Interest income Dividend income from listed investments Fair value gain on financial assets at fair value through profit or loss Gain on disposal of financial assets at fair value through profit or loss Gain on disposal of property, plant and equipment Handling charges received Sundry income	2007 HK$ 677,887 85,383 4,236,610 11,362,631 – 3,990 50,658 16,417,159	2006 HK$ 1,061,081 – – – 108,000 12,650 643
		1,182,374

8. BUSINESS AND GEOGRAPHICAL SEGMENTS

Business Segments

For management purposes, the Group is currently organised into three operating segments:

• Sales of diagnostic testing services

• The use of blood test and Fibroscan test in the diagnosis of cancerous and certain liver and other diseases.

• Sales of health food and pharmaceutical products

• Retail business on sales of health food and pharmaceutical products was commenced in December 2006. Accordingly no information about this business segment was presented for the year ended 30 June 2006.

• Research and development

• Research and development relating to diagnosis of cancer and certain other illnesses.

– 27 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Year ended 30 June 2007 TURNOVER RESULTS Segment results Other income Unallocated corporate expenses Profit before tax Income tax expense Profit for the year As at 30 June 2007 ASSETS Segment assets Unallocated assets Total assets LIABILITIES Segment liabilities Unallocated liabilities Total liabilities OTHER INFORMATION Capital expenditure Depreciation of property, plant and equipment Write-off of inventories Loss on disposal of property, plant and equipment	Sales of Sales of health diagnosis food and Research testing pharmaceutical and services products development HK$ HK$ HK$ 1,148,009 149,930 – (2,698,802) (322,796) (808,685) 23,021,812 392,216 1,359 1,077,669 51,200 16,021 1,214,889 207,560 – 286,980 30,709 – 70,878 6,450 – 270,717 – –	Total HK$ 1,297,939 (3,830,283) 16,373,215 (2,755,546) 9,787,386 (1,391,000) 8,396,386 23,415,387 17,378,156 40,793,543 1,144,890 1,593,275 2,738,165 1,422,449 317,689 77,328 270,717

– 28 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Sales of diagnosis testing services HK$ Year ended 30 June 2006 TURNOVER 1,368,404 RESULTS Segment results (5,914,161) Other income Unallocated corporate expenses Loss for the year As at 30 June 2006 ASSETS Segment assets 20,834,321 Unallocated assets Total assets LIABILITIES Segment liabilities 633,695 OTHER INFORMATION Capital expenditure 2,655,016 Depreciation and amortisation 1,138,839 Impairment losses of intangible assets – Fair value loss of financial assets at fair value through profit or loss –	Research and development HK$ – (4,384,921) 283,880 19,240 86,507 – 3,158,397 –	Total HK$ 1,368,404 (10,299,082) 1,061,081 (332,459) (9,570,460) 21,118,201 7,398,530 28,516,731 652,935 2,741,523 1,138,839 3,158,397 332,459

Geographical segments

The revenue and results, assets and liabilities of the Group for the years ended 30 June 2006 and 2007 are derived wholly from customers located in one geographical market, namely Hong Kong.

– 29 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

9. INCOME TAX EXPENSE

		2007	2006
		HK$	HK$
Current tax – Hong	Kong Profits Tax	1,391,000	–

Hong Kong Profits Tax has been provided at a rate of 17.5% on the estimated assessable profit for the year ended 30 June 2007. No provision for Hong Kong Profits Tax has been made for the year ended 30 June 2006 as the Group did not generate any assessable profits arising in Hong Kong during that year.

The income tax expense can be reconciled to the profit/(loss) before tax per the consolidated income statement as follows:

Profit/(Loss) before tax Tax calculated at the tax rate of 17.5% (2006: 17.5%) Tax effect of expenses not deductible in determining taxable profits Tax effect of income not taxable in determining taxable profits Tax effect of temporary differences not recognised Tax effect of utilisation of tax losses not previously recognised Tax effect of loss not recognised Underprovision in current year Income tax expense	2007 HK$ 9,787,386 1,712,790 176,434 (129,989) (105,184) (65,718) 102,667 (300,000) 1,391,000	2006 HK$ (9,570,460
		(1,674,830 483,784 (185,690 438,906 – 937,830 –
		–

– 30 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

10. PROFIT/(LOSS) BEFORE TAX

Profit/(Loss) before tax has been arrived at after charging/(crediting):

Amortisation of intangible assets Less: Amounts capitalised as development costs Amortisation included in other operating expenses Auditor’s remuneration Cost of inventories sold Depreciation Exchange losses Fair value (gain)/loss of financial assets at fair value through profit or loss Gain on disposal of financial assets at fair value through profit or loss Impairment losses of intangible assets included in other operating expenses Operating leases in respect of Office premises Retail shop Directors’ quarters Research and development expenditure other than amortisation, staff costs and share-based payment expenses Staff costs Directors’ emoluments including directors’ quarters_(note 11)_ Other staff’s retirement scheme contributions Other staff’s salaries and wages Other staff’s share-based payments expenses Other welfares Share-based payment expenses not included in staff costs Loss on disposal of property, plant and equipment Write-off of inventories included in cost of inventories sold Write-off of property, plant and equipment included in other operating expenses	2007 HK$	2006 HK$
	– –	773,845 (314,088)
		459,757 175,000 108,372 679,082 8,171 332,459 – 3,158,397 183,300 – 816,000 52,444
	2,341,084 57,584 1,353,355 – 21,146	1,607,805 60,440 1,330,746 795,099 18,277
	3,773,169 785,296 270,717 77,328 –	3,812,367 734,076 – – 133,127

– 31 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

11. DIRECTORS’ EMOLUMENTS

During the year ended 30 June 2007 and 2006, no emoluments were paid by the Group to the directors as an inducement to join or upon joining the Group or as compensation for loss of office. None of the directors has waived any emoluments during the years.

Details of emoluments of individual executive, non-executive and independent non-executive directors are set out below:

For the year ended 30 June 2007 Executive directors Mr. Lui Chi Wah, Johnny_(a) Mr. Wu Kai(b) Dr. Yeung Wah Hin, Alex(c) Mr. Cheng Yan Tak, Angus Ronald(d) Mr. Cho Kam Luk(c) Ms. Yeung Tsui Mai Ling, Margaret(c) Non-executive directors Mr. Lau Kam Shan Independent non-executive directors Mr. Chan Po Kwong Mr. Kwok Shun Tim(h) Mr. Lam Yan Wing(i) Mr. Chan Siu Wing, Raymond(d) Mr. Wong Kin Fung(g)_	Directors’ fees HK$ – 120,000 – – – – 120,000 – – – – 25,500 – 25,500 145,500	Salaries, allowances and other benefits HK$ 1,971,371 – 194,000 – – – 2,165,371 – – – – – – – 2,165,371	Retirement scheme contributions HK$ 27,500 – 2,000 – – – 29,500 – – – – 713 – 713 30,213	2007 Total HK$ 1,998,871 120,000 196,000 – – –
				2,314,871
				–
				– – – 26,213 –
				26,213
				2,341,084

– 32 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Directors’ fees HK$ For the year ended 30 June 2006 Executive directors Dr. Yeung Wah Hin, Alex_(c) – Mr. Cheng Yan Tak, Angus Ronald(d) – Mr. Cho Kam Luk(c) – Ms. Yeung Tsui Mai Ling, Margaret(c) – – Non-executive directors Mr. Lau Kam Shan – Independent non-executive directors Dr. Ngan Man Wong, Matthew(e) – Dr. Loh Kai Tsu, Kevin(f) – Mr. Chan Siu Wing, Raymond(d) 28,242 Mr. Chan Po Kwong – Mr. Wong Kin Fung(g)_ – 28,242 28,242	Salaries, allowances Retirement and other scheme benefits contributions HK$ HK$ 1,176,000 12,000 – – – – – – 1,176,000 12,000 – – – – – – – 1,412 – – – – – 1,412 1,176,000 13,412	Share-based payments HK$ 66,453 33,226 33,226 33,226 166,131 33,226 43,355 – 57,129 90,310 – 190,794 390,151	2006 Total HK$ 1,254,453 33,226 33,226 33,226
			1,354,131
			33,226
			43,355 – 86,783 90,310 –
			220,448
			1,607,805

Notes:

• (a) Appointed on 2 August 2006 (b) Appointed on 22 August 2006

• (c) Resigned on 2 August 2006

• (d) Resigned on 22 August 2006

• (e) Resigned on 22 March 2006

• (f) Resigned on 24 October 2005

• (g) Retired on 2 November 2006

• (h) Appointed on 13 September 2006

• (i) Appointed on 30 January 2007

– 33 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

12. EMPLOYEES’ EMOLUMENTS

The five highest paid individuals in the Group included two (2006: one) executive directors of the Company, whose emoluments are included in note 11 above. The emoluments of the remaining three (2006: four) individuals are as follows:

Salaries and allowances Retirement scheme contributions Share-based payments	2007 HK$ 645,122 26,900 – 672,022	2006 HK$ 978,983 43,725 287,385
		1,310,093

The emoluments of the remaining three (2006: four) highest paid individuals were within the following band:

HK$Nil – HK$1,000,000	Number of individuals 2007 2006 3 4

During the year, no emoluments were paid by the Group to the five highest paid individuals as an inducement to join or upon joining the Group or as compensation for loss of office.

13. DIVIDENDS

No dividend has been paid or declared by the Company for the year (2006: Nil).

14. EARNINGS/(LOSS) PER SHARE

The calculation of the basic earnings/(loss) per share is based on the profit for the year attributable to the equity holders of the Company of HK$8,396,386 (2006: loss of HK$9,570,460) and on the weighted average number of ordinary shares of 375,883,507 (2006: 375,982,170) in issue during the year.

The calculation of the diluted earnings per share for the year ended 30 June 2007 is based on the profit attributable to equity holders of the Company of HK$8,396,386 and the weighted average number of 379,036,662 shares, being the weighted average number of ordinary shares outstanding during the year, adjusted for the effects on assumed exercise of share options.

The computation of diluted loss per share for the year ended 30 June 2006 has not been presented because the assumed exercises of share options, which were outstanding during the year, had anti-dilutive effects on the basic loss per share.

– 34 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

15. INTANGIBLE ASSETS

The Group carried out reviews of the recoverable amount of its intangible assets in 2006 and 2007, having regard to the market conditions of the Group’s services. These assets were used in the Group’s research and development segment. The review led to the recognition of impairment losses of HK$2,001,725 for development costs and HK$1,156,672 for licences and patents, which had been recognised in the prior year income statement. The recoverable amount had been determined on the basis of their value in use. In the opinion of the management, no future cash inflow would be generated from the relevant assets. Impairment losses had been fully provided for the year ended 30 June 2006.

Details of the intangible assets of the Group at the balance sheet date are set out below:

Cost At 1 July 2005 Additions At 30 June 2006 and 30 June 2007 Accumulated amortisation and impairment losses At 1 July 2005 Charge to consolidated income statement Amount capitalised as development costs Impairment losses At 30 June 2006 and 30 June 2007 Carrying amount At 30 June 2006 and 30 June 2007	Development costs HK$ 3,612,637 314,088 3,926,725 1,505,000	Development costs HK$ 3,612,637 314,088 3,926,725 1,505,000	Licences and patents HK$ 2,490,731 113,443 2,604,174 1,093,657	Licences and patents HK$ 2,490,731 113,443 2,604,174 1,093,657	Total HK$ 6,103,368 427,531 6,530,899 2,598,657
	420,000 –		39,757 314,088		459,757 314,088
	420,000 2,001,725 3,926,725 –		353,845 1,156,672 2,604,174 –		773,845 3,158,397 6,530,899 –

– 35 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

16. PROPERTY, PLANT AND EQUIPMENT

Construction in progress HK$ Cost At 1 July 2005 – Additions 1,500,000 Disposals/Write-off – At 30 June 2006 and 1 July 2006 1,500,000 Additions – Disposals/Write-off – At 30 June 2007 1,500,000 Accumulated depreciation and impairment At 1 July 2005 – Charge for the year – Disposals/Write-off – At 30 June 2006 and 1 July 2006 – Charge for the year – Disposals/Write-off – At 30 June 2007 – Carrying amount At 30 June 2007 1,500,000 At 30 June 2006 1,500,000	Office equipment, Laboratory Leasehold furniture equipment improvements and fixtures HK$ HK$ HK$ 1,041,434 269,492 659,660 670,400 – 18,680 – (269,492) (385,897) 1,711,834 – 292,443 1,021,886 337,580 62,983 – – – 2,733,720 337,580 355,426 742,000 127,384 495,093 400,674 53,898 136,710 – (181,282) (340,980) 1,142,674 – 290,823 191,136 41,550 4,520 – – – 1,333,810 41,550 295,343 1,399,910 296,030 60,083 569,160 – 1,620	Motor vehicles HK$ 94,206 439,000 (94,206) 439,000 – (439,000) – 94,206 87,800 (94,206) 87,800 80,483 (168,283) – – 351,200	Total HK$ 2,064,792 2,628,080 (749,595) 3,943,277 1,422,449 (439,000) 4,926,726 1,458,683 679,082 (616,468) 1,521,297 317,689 (168,283) 1,670,703 3,256,023 2,421,980

Construction in progress represents work in progress of designs and renovation in respect of a molecular testing laboratory workshop in a body-check centre which is still under construction.

– 36 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

17. INVENTORIES

Pharmaceutical supplies Health food and pharmaceutical products TRADE AND OTHER RECEIVABLES Trade receivables Payment for shares of initial public offering application Receivable arising from dealing in listed securities Deposits Prepayments Other receivables	2007 HK$ – 100,527 100,527 2007 HK$ 160,678 7,267,395 10,329,660 141,858 130,938 21,436 18,051,965	2006 HK$ 44,846 –
		44,846
		2006 HK$ 144,829 – – 330,335 115,695 21,709
		612,568

18. TRADE AND OTHER RECEIVABLES

The Group allows its customers with an average credit period of 30 days. The aging analysis of trade receivables at the balance sheet date based on the invoice date is as follows:

0 – 30 days 31 – 60 days 61 – 90 days > 90 days	2007 HK$ 78,805 18,870 19,100 43,903 160,678	2006 HK$ 104,883 29,935 9,281 730
		144,829

19. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Held for trading and at fair value Listed equity securities in Hong Kong Unlisted debt securities_(note)_	2007 HK$ 15,262,864 – 15,262,864	2006 HK$ – 7,398,530
		7,398,530

Note: The above unlisted debt securities represented five-year treasury notes of the United States with interest rate of 4% per annum. Their fair values were determined based on the market price provided by the relevant financial institution. The Group had disposed of the treasury notes in the current year.

20. CASH AND BANK BALANCES

Cash and bank balances comprises cash held by the Group and bank balances that bear interest at prevailing market rates of 2.75% (2006: 4.98%) per annum and have original maturity of one month or less (2006: one month or less).

– 37 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

21. TRADE AND OTHER PAYABLES

2007 HK$ Trade payables 13,703 Other payables and accrued charges 1,333,462 Amount due to a related company_(see note 28d) – 1,347,165 The following is an aged analysis of trade payables at the balance sheet date: 2007 _HK$ 0 – 30 days 9,087 31 – 60 days 2,051 61 – 90 days 386 > 90 days 2,179 13,703	2006 HK$ – 652,709 226
	652,935
	2006 HK$ – – – –
	–

22. DEFERRED TAXATION

At the balance sheet date, the major components of the unprovided deferred taxation of the Group are as follows:

Accelerated depreciation allowance Future benefits of tax losses	2007 HK$ (180,108) 4,610,587 4,430,479	2006 HK$ (74,924) 4,083,602
		4,008,678

No deferred tax assets has been recognised as the generation of future taxable profits against which the assets can be utilised is uncertain. The tax losses can be carried forward indefinitely.

23. SHARE CAPITAL

Ordinary shares of HK$0.01 each Authorised At 1 July 2005, 30 June 2006 and 2007 Issued and fully paid At 1 July 2005 Shares repurchase_(note a) At 30 June 2006 and 1 July 2006 Exercise of share options(note b)_ At 30 June 2007	Number of shares 1,000,000,000 383,076,000 (9,484,000) 373,592,000 9,000,000 382,592,000	Nominal value HK$ 10,000,000
		3,830,760 (94,840)
		3,735,920 90,000
		3,825,920

– 38 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Notes:

(a) During the year ended 30 June 2006, the Company repurchased its own shares on GEM as follows:

Month of repurchase July 2005 November 2005 Total	Number of Aggregate shares Price per share consideration repurchased Highest Lowest paid HK$ HK$ HK$ 3,500,000 0.207 0.178 655,796 5,984,000 0.145 0.126 822,610 9,484,000 1,478,406

The above shares were cancelled upon repurchases and accordingly the issued share capital of the Company was reduced by the par value of these shares which amounted to HK$94,840. An aggregate amount of HK$1,383,566 representing the premium portion and brokerage expenses payable on the repurchases was charged against the share premium account.

(b) During the year ended 30 June 2007, the Company had issued a total of 9,000,000 ordinary shares of HK$0.01 each upon the exercise of share options as follows:

Exercise price per share HK$0.105 HK$0.116	Number of shares issued upon exercise 3,100,000 5,900,000 9,000,000	Amounts of share exercised HK$ 325,500 684,400 1,009,900	Share capital increased upon exercise HK$ 31,000 59,000 90,000	Share premium increased upon exercise HK$ 294,500 625,400
				919,900

24. SHARE OPTIONS

• (a) A share option scheme (the “Share Option Scheme”) was adopted by the shareholders of the Company on 20 April 2004 for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group’s operations.

The board of Directors (the “Board”) may, at its discretion, invite any employees, Directors, advisors, consultants, licensors, distributors, suppliers, agents, customers, joint venture partners, strategic partners and services providers of and/or to any member of the Group whom the Board considers in its sole discretion, to have contributed to the Group from time to time (together “Participants”) to take up options to subscribe for shares of the Company (“Options”).

Options granted should be accepted within 14 days from the date of grant. Upon acceptance of the Options, the eligible person shall pay HK$1 to the Company by way of consideration for the grant. The Options may be exercised in accordance with the terms of the Share Option Scheme at any time during the option period after the Options has been granted by the Board. An option period is a period to be determined by the Board in its absolute discretion and notified by the Board to each eligible person as being the period during which any Options may be exercised, such period to expire not later than 10 years after the date of grant of the Options.

– 39 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

The subscription price will be determined by the Board of the Company at its absolute discretion and shall be no less than the highest of: (a) the closing price of the shares as stated in the daily quotations sheet issued by the Stock Exchange on the date of grant which must be a business day; and (b) the average closing price of the shares as stated in the daily quotations sheets issued by the Stock Exchange for the five business days immediately preceding the date of grant; and (c) the nominal value of a share.

The total number of shares which may be issued upon exercise of all outstanding options granted or to be granted under the Share Option Scheme is 10% of the issued share capital of the Company as at the listing date of the Company on GEM (the “Scheme Mandate Limit”). The Company may renew the Scheme Mandate Limit at any time subject to prior shareholders of the Company’s approval.

No Participants shall be granted an option which, if exercised in full, would result in such Participants becoming entitled to subscribe for such number of shares as, when aggregated with the total number of shares already issued under all the options previously granted to him or her which have been exercised, and, issuable under all the outstanding options previously granted to him or her which are for the time being subsisting and unexercised, would exceed 1% of the total number of shares in issue in any 12-month period up to the date of grant of the Options.

Unless early terminated in accordance with the terms therein, the Share Option Scheme will remain valid and effective for a period of 10 years commencing on 18 June 2004.

Share options do not confer rights on the holder to dividends or to vote at the shareholders’ meeting.

Details of the movements in share options granted under the Share Option Scheme during the year ended 30 June 2007 are set out as follows:

			Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which
				share options	were granted
		**Exercise **	Outstanding		**Exercised/ **	Outstanding
		price	at		Cancelled/	at
Date of grant	Exercisable period	per share	01/07/2006	Granted	Lapsed	30/06/2007
		HK$
Directors
20/06/2005	20/06/2005 – 19/06/2008	0.225	6,225,266	–	5,114,155	1,111,111
20/06/2005	20/06/2005 – 19/06/2015	0.225	3,999,999	–	3,999,999	–
19/06/2006	19/06/2006 – 18/06/2009	0.105	3,000,000	–	2,500,000	500,000
19/06/2006	19/06/2006 – 18/06/2016	0.105	2,003,835	–	1,055,342	948,493
Employees
26/06/2006	26/06/2006 – 25/06/2016	0.116	4,700,000	–	4,100,000	600,000
Other eligible participants
26/06/2006	26/06/2006 – 25/06/2016	0.116	3,600,000	–	3,600,000	–
Total			23,529,100	–	20,369,496	3,159,604
Weighted average
exercise price (HK$)			0.1610	–	0.1629	0.1493

– 40 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Details of the movements in share options granted under the Share Option Scheme during the year ended 30 June 2006 are set out as follows:

			Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which
				share options	were granted
		**Exercise **	Outstanding		**Exercised/ **	Outstanding
		price	at		Cancelled/	at
Date of grant	Exercisable period	per share	01/07/2005	Granted	Lapsed	30/06/2006
		HK$
Directors
20/06/2005	20/06/2005 – 19/06/2008	0.225	6,225,266	–	–	6,225,266
20/06/2005	20/06/2005 – 19/06/2015	0.225	3,999,999	–	–	3,999,999
19/06/2006	19/06/2006 – 18/06/2009	0.105	–	3,000,000	–	3,000,000
19/06/2006	19/06/2006 – 18/06/2016	0.105	–	2,003,835	–	2,003,835
Employees
26/06/2006	26/06/2006 – 25/06/2016	0.116	–	4,700,000	–	4,700,000
Other eligible participants
26/06/2006	26/06/2006 – 25/06/2016	0.116	–	3,600,000	–	3,600,000
Total			10,225,265	13,303,835	–	23,529,100
Weighted average
exercise price (HK$)			0.2250	0.1120	–	0.1610

The options outstanding at the end of the year have a weighted average remaining contractual life of approximately 6.16 years (2006: approximately 6.82 years).

Total consideration received during the year ended 30 June 2006 from directors, employees and other eligible participants for accepting the options granted amounted to HK$17.

• (b) Under an agreement entered into between the Chinese University and the Company on 8 August, 2002 relating to the grant of a right of first refusal to the Company by the Chinese University in respect of certain technology and inventions, as amended and supplemented by agreements dated 31 October, 2003 and 16 April, 2004 (the “Right of First Refusal Agreement”), the Company will be offered a right of first refusal for the grant by the Chinese University of a royalty-bearing exclusive licence to use and commercially develop certain technologies and inventions and other non-invasive diagnostic technologies for detecting cancer and foetal diseases developed by Professor Lo Yuk Ming, Dennis in future.

In return, the Company agreed to grant to the Chinese University or such person as the Chinese University may direct (including trustees of any funds) options to subscribe for shares or to pay cash up to a maximum amount of HK$4,600,000 over the period of the term of such agreement of four years commencing from 18 June, 2004. Such grant of options will be granted to the Chinese University at intervals of twelve months. Such options are not intended to be granted under the share option scheme adopted by the Company on 20 April 2004.

– 41 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Details of the movements in share options granted to Chinese University during the year ended 30 June 2007 are set out as follows:

			Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which
			share options were granted
		**Exercise **	Outstanding	**Exercised/ **	Outstanding
		price	at	Cancelled/	at
Date of grant	Exercisable period	per share	01/07/2006 Granted	Lapsed	30/06/2007
		HK$
28/06/2005	28/12/2005 – 27/06/2010	0.223	4,484,305 –	–	4,484,305
26/06/2006	26/12/2006 – 25/06/2011	0.116	9,482,758 –	–	9,482,758
22/06/2007	22/12/2007 – 21/06/2012	0.295	– 4,067,796	–	4,067,796
Total			13,967,063 4,067,796	–	18,034,859
Weighted average
exercise price (HK$)			0.1504 0.2950	–	0.1830

Details of the movements in share options granted to Chinese University during the year ended 30 June 2006 are set out as follows:

			Number of underlying shares in respect of which	Number of underlying shares in respect of which	Number of underlying shares in respect of which
			share options were granted
		**Exercise **	Outstanding	**Exercised/ **	Outstanding
		price	at	Cancelled/	at
Date of grant	Exercisable period	per share	01/07/2005 Granted	Lapsed	30/06/2006
		HK$
28/06/2005	28/12/2005 – 27/06/2010	0.223	4,484,305 –	–	4,484,305
26/06/2006	26/12/2006 – 25/06/2011	0.116	– 9,482,758	–	9,482,758
Total			4,484,305 9,482,758	–	13,967,063
Weighted average
exercise price (HK$)			0.223 0.116	–	0.1504

The options outstanding at the end of the year have a weighted average remaining contractual life of approximately 3.97 years (2006: approximately 4.18 years).

For share options granted and vested before 1 July 2005 did not result in a charge to the income statement. When the grantees chose to exercise the options, the nominal amounts of share capital and share premium were credited only to the extent of the option’s exercise price receivable.

The fair value of share option of the 4,067,796 shares granted to Chinese University during the year ended 30 June 2007 amounted to approximately HK$785,296 which was credited to share option reserves.

– 42 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

(c) The fair values of share option granted were determined using the Black-Scholes valuation model. The significant inputs into the model were as follows:

		Share options grant date
	22/06/2007	19/06/2006	26/06/2006
Share price at the grant date	0.295	0.105	0.115
Exercise price (HK$)	0.295	0.105	0.116
Expected volatility based on historical
volatility of share prices (%)	76.88	98.41	98.41
Expected annual dividend yield,
based on historical dividend (%)	0	0	0
Expected life of option (years)	5	5.8	5.5
Hong Kong Exchange Fund Notes rate
for corresponding estimated expected
life indicated at the date of grant (%)	4.665	4.81 – 4.92	4.62 – 4.83

Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous 1,267 days. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations.

25. RETIREMENT SCHEME

The Group operates a Mandatory Provident Fund Scheme for all qualifying employees in Hong Kong. The assets of the scheme are held separately from those of the Group, in funds under the control of trustees. The Group contributes 5% or relevant payroll costs to the scheme, which contribution is matched by employees.

The total cost charged to consolidated income statement of HK$87,797 (2006: HK$73,853) represents contributions payable to the scheme by the Group during the year.

26. OPERATING LEASES COMMITMENTS

At the balance sheet dates, the Group had commitments for future minimum leases payment under non-cancellable operating leases which fall due as follows:

Within one year In the second to fifth years inclusive	2007 HK$ 519,600 437,600 957,200	2006 HK$ 252,600 –
		252,600

Operating lease payments represent rentals payable by the Group for its office premises, retail shop and director’s quarter. Leases are negotiated and rentals are fixed for a term ranging from two to three years.

27. CAPITAL COMMITMENTS

As at 30 June 2007, the Group had no significant capital commitment. (2006: nil)

– 43 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

28. RELATED PARTY TRANSACTIONS AND BALANCES

• (a) The Group had no significant transactions with related parties during the year or significant balances with them at the end of the year.

• (b) The compensation to the Group’s key management personnel is disclosed in note 11 to the financial statements.

• (c) In prior year sales of diagnostic testing services amounted to HK$12,185 were made to Spring Biotech Limited, a shareholder of the Company. The Group had no trade receivables due from Spring Biotech Limited as at 30 June 2006. Mr. Cho Kam Luk, an executive Director (resigned on 2 August 2006), was interested in the transactions as a beneficial shareholder of Spring Biotech Limited. The maximum outstanding balance for the year ended 30 June 2006 was HK$2,765.

• (d) Pursuant to sub-lease agreements dated 29 August 2003 and 26 July 2004, the Group subleased part of its office premises to Wellchamp Capital Limited (“Wellchamp”) for the period from 26 May 2003 to 12 February 2005 at a monthly rental of HK$25,000. A renewal agreement was entered into by the Company with Wellchamp on 25 April 2005 to extend sub-leasing period to 12 February 2007 at a monthly rental of HK$29,500 (other terms remained the same). A net amount of HK$365,685 was paid by Wellchamp to the Group as rental and utility charges during the year ended 30 June 2006. Mr. Cheng Yan Tak, Angus Ronald, an executive Director (resigned on 22 August 2006), was interested in the transactions as a shareholder of Wellchamp. The Group had other payable of HK$226 due to Wellchamp as at 30 June 2006 which was unsecured, interest free and repayable on demand. The above sub-lease agreement was early terminated in February 2007.

29. EVENTS AFTER BALANCE SHEET DATE

On 12 June 2007, the Company entered into two conditional placing agreements with an independent placing agent for the placing of up to 304,388,000 new shares to the independent subscribers at the placing price of HK$0.17 per placing share. The two placements were completed on 11 July 2007 and 6 September 2007 respectively.

Details of these two placements are disclosed in announcements of the Company dated 12 June 2007, 18 July 2007 and 7 September 2007.

– 44 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

30. BALANCE SHEET OF THE COMPANY

Non-current assets Investments in subsidiaries Current assets Amounts due from subsidiaries Financial assets at fair value through profit or loss Other receivables and prepayments Cash and bank balances Current liabilities Amounts due to subsidiaries Other payables and accrued charges Net current assets Net assets Capital and reserves Share capital Reserves_(note)_ Total equity	2007 HK$ 795,107 27,647,749 7,268 50,000 493,088 28,198,105 1,527,018 363,708 1,890,726 26,307,379 27,102,486 3,825,920 23,276,566 27,102,486	2006 HK$ 795,107
		48,747 7,398,530 387,988 17,670,533
		25,505,798
		– 241,045
		241,045
		25,264,753
		26,059,860
		3,735,920 22,323,940
		26,059,860

– 45 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Note:

Reserve

Balance at 1 July 2005 Shares repurchase Recognition of share-based payments Loss for the year Balance at 30 June 2006 and 1 July 2006 Issue of shares upon exercise of share options Transfer of reserve upon exercise of share options Transfer of reserve upon lapse of share options Recognition of share-based payments Loss for the year Balance at 30 June 2007	Share Share options Accumulated premium reserve losses HK$ HK$ HK$ 46,628,204 – (1,893,729) (1,383,566) – – – 1,919,326 – – – (22,946,295) 45,244,638 1,919,326 (24,840,024) 919,900 – – 788,450 (788,450) – – (215,786) 215,786 – 785,296 – – – (752,570) 46,952,988 1,700,386 (25,376,808)	Total HK$ 44,734,475 (1,383,566) 1,919,326 (22,946,295) 22,323,940 919,900 – – 785,296 (752,570) 23,276,566

– 46 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

31. PRINCIPAL SUBSIDIARIES

Particulars of the Company’s principal subsidiaries as at 30 June 2007 are as follows:

	Place of incorporation
	and operation and	Issued and fully	Attributable
Company	kind of legal entity	paid share capital	equity	interest	Principal activities
			Direct	Indirect
China Universal	Hong Kong, Limited	Ordinary shares	–	100%	Investment in
Limited	liability company	HK$1			listed securities
Core Healthcare	Hong Kong, Limited	Ordinary shares	–	100%	Sales of health
Products Limited	liability company	HK$2			food and
					pharmaceutical
					products
Core Medical Technology	Hong Kong, Limited	Ordinary shares	–	100%	Diagnostic
Limited (formerly known	liability company	HK$12,000,000			testing services
as Plasmagene Limited)					and products,
					and related
					research and
					development
Hong Kong Hepatitis	Hong Kong, Limited	Ordinary shares	–	100%	Diagnostic
Diagnostic Centre	liability company	HK$100			testing services
Limited					relating to certain
					liver diseases

The above table lists the subsidiaries of the Group which, in the opinion of the directors, principally affected the results or assets of the Group. To give details of other subsidiaries would, in the opinion of the directors, results in particulars of excessive length.

None of the subsidiaries had issued any debt securities at the end of the year.

32. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved and authorised for issue by the board of Directors on 13 September 2007.

– 47 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

III. UNAUDITED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2007

The following is the unaudited financial statements of the Group for the six months ended 31 December 2007 as extracted from the interim report of the Company for the six months ended 31 December 2007.

Condensed Consolidated Income Statement

For the six months ended 31 December 2007

Notes Turnover 3 Cost of sales Gross profit Other income Gain on fair value changes on held for trading investments Selling and distribution expenses Administration expenses Other operating expenses Profit/(Loss) before tax Income tax expense 5 Profit/(Loss) attributable to equity holders of the Company Earnings/(Loss) per share – basic 6 – diluted 6	Six months ended 31 December 2007 2006 (Unaudited) (Unaudited) HK$ HK$ 739,783 607,034 (542,626) (437,428) 197,157 169,606 1,427,024 505,868 1,361,626 13,819,883 2,985,807 14,495,357 (9,726) (126,608) (3,223,601) (3,039,093) (193,535) (233,631) (441,055) 11,096,025 – – (441,055) 11,096,025 (0.007 cents) 0.297 cents (0.007 cents) 0.296 cents

– 48 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Condensed Consolidated Balance Sheet

As at 31 December 2007 and 30 June 2007

31 December 2007 (Unaudited) Notes HK$ Non-current assets Plant and equipment 3,051,162 Current assets Inventories 91,196 Trade and other receivables 7 2,519,945 Financial assets at fair value through profit or loss – Listed equity securities in Hong Kong 31,726,295 Cash and bank balances 60,506,730 94,844,166 Current liabilities Trade and other payables 8 1,016,202 Tax payable 1,391,000 2,407,202 Net current assets 92,436,964 95,488,126 Capital and reserves Share capital 7,341,067 Reserves 88,147,059 Total equity 95,488,126	30 June 2007 (Audited) HK$ 3,256,023
	100,527 18,051,965 15,262,864 4,122,164
	37,537,520 1,347,165 1,391,000
	2,738,165
	34,799,355
	38,055,378
	3,825,920 34,229,458
	38,055,378

– 49 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Condensed Consolidated Statement of Change in Equity

For the six months ended 31 December 2007

Issued capital HK$ Balance at 1 July 2007 (Audited) 3,825,920 Issue of new shares upon placement 3,343,880 Issue of shares upon exercise of share option 171,267 Transfer of reserves upon exercise of share option – Loss for the period – Balance at 31 December 2007 (Unaudited) 7,341,067		Reserves	Reserves	Sub-total of reserves HK$ 34,229,458 51,958,231 2,400,425 – (441,055) 88,147,059	Total HK$ 38,055,378 55,302,111 2,571,692 – (441,055
	Share premium HK$ 46,952,988 51,958,231 2,400,425 915,089 – 102,226,733	Share option reserve HK$ 1,700,386 – – (915,089) – 785,297	Accumulated losses HK$ (14,423,916) – – – (441,055) (14,864,971)
					95,488,126

For the six months ended 31 December 2006

Issued capital HK$ Balance at 1 July 2006 (Audited) 3,735,920 Issue of shares upon exercise of share option 6,000 Transfer of reserves upon exercise of share option – Profit for the period – Balance at 31 December 2006 (Unaudited) 3,741,920		Reserves	Reserves	Sub-total of reserves HK$ 24,127,876 57,000 – 11,096,025 35,280,901	Total HK$ 27,863,796 63,000 – 11,096,025
	Share premium HK$ 45,244,638 57,000 57,128 – 45,358,766	Share option reserve HK$ 1,919,326 – (57,128) – 1,862,198	Accumulated losses HK$ (23,036,088) – – 11,096,025 (11,940,063)
					39,022,821

– 50 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Condensed Consolidated Cash Flow Statement

For the six months ended 31 December 2007

Net cash from/(used in) operating activities Net cash used in investing activities Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Analysis of the balances of cash and cash equivalents Cash and bank balances	Six months ended 31 December 2007 2006 (Unaudited) (Unaudited) HK$ HK$ 12,932,422 (3,361,598) (14,421,659) (3,725,888) 57,873,803 63,000 56,384,566 (7,024,486) 4,122,164 18,038,807 60,506,730 11,014,321 60,506,730 11,014,321

– 51 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

Notes to the Financial Statements

For the six months ended 31 December 2007

Notes:

1. GENERAL

The Company is incorporated as an exempted company with limited liability in the Cayman Islands and its shares are listed on the Growth Enterprise Market (“GEM”) of the Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

The Company is an investment holding company. Its subsidiaries are principally engaged in the provision of diagnostic testing services and products and related research and development, investment holding, and sales of health food and pharmaceutical products.

2.

BASIS OF PREPARATION

The unaudited consolidated results have been prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the applicable disclosures required by the Rules Governing the Listing of Securities on the GEM of the Stock Exchange and by the Hong Kong Companies Ordinance.

The unaudited consolidated results have been prepared under the historical cost convention, as modified by the revaluation of investments which are carried at their fair values.

The accounting policies used in the preparation of the unaudited consolidated results are consistent with those adopted in preparing the Group’s annual financial statements for the year ended 30 June 2007.

3. TURNOVER

The Group’s turnover represents turnover arising on sales of diagnostic testing services and products and sales of health food and pharmaceutical products. An analysis of the Group’s turnover for the period is as follows:

Sales of diagnostic testing services and products Sales of health food and pharmaceutical products	Three months ended 31 December 2007 2006 HK$ HK$ 352,535 273,125 61,837 20,868 414,372 293,993	Six months ended 31 December 2007 2006 HK$ HK$ 630,157 586,166 109,626 20,868 739,783 607,034	Six months ended 31 December 2007 2006 HK$ HK$ 630,157 586,166 109,626 20,868 739,783 607,034
			607,034

– 52 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

4. SEGMENT INFORMATION

For management purposes, the Group is currently organized into three operating segments:

• Sales of diagnostic testing services

• The use of blood test and Fibroscan test in the diagnosis of cancerous and certain liver and other diseases.

• Sales of health food and pharmaceutical products

• Retail business on sales of health food and pharmaceutical products was commenced in December 2006.

• Research and development

• Research and development relating to diagnosis of cancer and certain other illnesses.

Business Segments

TURNOVER RESULTS Segment results Other income Unallocated corporate expenses Profit/(Loss) before taxation Income tax expense PROFIT/(LOSS) FOR THE PERIOD OTHER INFORMATION Capital expenditure Depreciation of plant and equipment Write-off of inventories Loss on disposal of plant and equipment	Sale of diagnostic testing services 2007 2006 HK$ HK$ 630,157 586,166 (881,591) (1,017,289 ) 12,211 279,000 187,601 67,150 – – – –	Sale of health food and pharmaceutical Research and products development For the six months ended 31 December 2007 2006 2007 2006 HK$ HK$ HK$ HK$ 109,626 20,868 – – (294,957) (449,299 ) 222,567 (86,465 ) 455,960 157,280 – – 71,134 4,207 – – 3,552 – – – 84,297 – – –	Total 2007 2006 HK$ HK$ 739,783 607,034 (953,981) (1,553,053 ) 2,205,032 14,322,211 (1,692,106) (1,673,133 ) (441,055) 11,096,025 – – (441,055) 11,096,025 468,171 436,280 258,735 71,357 3,552 – 84,297 –

Geographical segments

The revenue and results of the Group for the six months ended 31 December 2006 and 2007 are derived wholly from customers located in one geographical market, namely Hong Kong.

– 53 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

5. INCOME TAX EXPENSE

No provision for Hong Kong Profits Tax has been made as the Group had no assessable profits for the six months ended 31 December 2007 (2006: Nil).

There was no material unprovided deferred taxation for the three months and six months ended 31 December 2007 (2006: Nil).

6. EARNINGS/(LOSS) PER SHARE

On 18 January 2008, the ordinary resolution to approve the subdivision of every issued or unissued existing ordinary share of the nominal value of HK$0.01 each in the share capital of the Company into 10 ordinary shares of the nominal value of HK$0.001 each in the share capital of the Company (the “Subdivided Shares”) (referred to as the “Share Subdivision”) was duly passed by the Shareholders.

The calculation of the basic earnings/(loss) per share for the three months ended 31 December 2007 is based on the unaudited loss for the corresponding period attributable to the equity holders of the Company of HK$11,846,136 (2006: profit of HK$11,592,516) and the weighted average number of Subdivided Shares of 7,032,595,240 (2006: 3,740,680,870) in issue during the period after adjusting for the effect on the Share Subdivision.

The calculation of the basic earnings/(loss) per share for the six months ended 31 December 2007 is based on the unaudited loss for the corresponding period attributable to the equity holders of the Company of HK$441,055 (2006: profit of HK$11,096,025) and the weighted average number of Subdivided Shares of 6,103,931,920 (2006: 3,738,300,430) in issue during the period after adjusting for the effect on the Share Subdivision.

The calculation of diluted earnings/(loss) per share for the three months ended 31 December 2007 is based on the unaudited loss for the corresponding period attributable to equity holder of the Company of HK$11,846,136 (2006: profit of HK$11,592,516) and 7,065,667,550 (2006: 3,750,490,680) Subdivided Shares, being the weighted average number of Subdivided Shares outstanding during the period, adjusted for the effects on the Share Subdivision and potential shares issued upon exercise of share options.

The calculation of diluted earnings/(loss) per share for the six months ended 31 December 2007 is based on the unaudited loss for the corresponding period attributable to equity holder of the Company of HK$441,055 (2006: profit of HK$11,096,025) and 6,149,574,900 (2006: 3,748,390,290) Subdivided Shares, being the weighted average number of Subdivided Shares outstanding during the period, adjusted for the effects on the Share Subdivision and potential shares issued upon exercise of share options.

7. TRADE AND OTHER RECEIVABLES

Trade receivables Payment for shares of initial public offering application Receivable arising from dealing in listed securities Prepayments, deposits and other receivables	31 December 2007 HK$ 278,949 – 1,699,781 541,215 2,519,945	30 June 2007 HK$ 160,678 7,267,395 10,329,660 294,232
		18,051,965

– 54 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

The Group allows its customers with an average credit period of 30 days. The aging analysis of the trade receivables at the balance sheet date based on invoice date is as follows:

0 – 30 days 31 – 60 days 61 – 90 days Over 90 days TRADE AND OTHER PAYABLES Trade payables Accruals and other payables	31 December 2007 HK$ 181,230 47,465 2,100 48,154 278,949 31 December 2007 HK$ 268,545 747,657 1,016,202	30 June 2007 HK$ 78,805 18,870 19,100 43,903
		160,678
		30 June 2007 HK$ 13,703 1,333,462
		1,347,165

8. TRADE AND OTHER PAYABLES

The following is an aged analysis of trade payables at the balance sheet date:

0 – 30 days 31 – 60 days 61 – 90 days Over 90 days	31 December 2007 HK$ 93,372 340 336 174,497 268,545	30 June 2007 HK$ 9,087 2,051 386 2,179
		13,703

9. DIVIDEND

The Board does not recommend the payment of dividend for the six months ended 31 December 2007 (2006: Nil).

– 55 –

APPENDIX I

FINANCIAL INFORMATION ON THE GROUP

IV. FUTURE OUTLOOK

The global financial market has continued to be extremely volatile since the beginning of 2008. A lackluster first quarter is expected for the Wall Street market as investors’ confidence has been hit by the U.S. sub-prime crisis, coupled with uncertain prospects of U.S. economic growth. For Hong Kong stocks, short-term volatility looks inevitable although outlook should be optimistic in the long run given robust economic growth in China and Hong Kong and negative interest rates for Hong Kong dollar deposits following a series of rate cuts which favor the value of assets denominated in Hong Kong dollar. The Group will adopt a prudent investment strategy to minimize the impact of market volatility.

The business performance of the Group’s existing operations in Hong Kong has been stable, while the Group continues to identify business development opportunities in China’s pharmaceutical market.

V. NO MATERIAL ADVERSE CHANGE

The Directors are not aware of any known material change in the financial trading prospect of the Group since 30 June 2007, the date to which the latest audited consolidated financial statements of the Company were made up and up to the Latest Practicable Date.

VI. INDEBTEDNESS

At the close of business on 31 January 2008, being the latest practicable date for this statement of indebtedness prior to the printing of the circular, the Group had the convertible bonds with a principal amount of HK$150 million (the “Convertible Bonds”) issued by the Company on 31 January 2008 to Precious Success. The Convertible Bonds bear interest at 1% per annum. The maturity date of the Convertible Bonds is the date falling on the fourth anniversary of the date of issue of the Convertible Bonds.

Save as disclosed above, the Group did not have outstanding bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, finance lease commitments, guarantees or other material contingent liabilities.

VII. WORKING CAPITAL

The Directors, after due and careful consideration, are of the opinion that, in the absence of unforeseen circumstances and based on the expected cash flows and the internal resources of the Enlarged Group, the Enlarged Group will have sufficient working capital for its present requirements for the next twelve months from the date of this circular.

– 56 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

A. UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

The accompanying unaudited pro forma statement of assets and liabilities of the Enlarged Group (the “Statement”) has been prepared to illustrate the effect of the acquisition of Class 1 New Drug Business through cooperation with Xizang Medicine (the “Acquisition”), assuming the transaction had been completed as at 31 December 2007, might have affected the financial position of the Group.

The Statement is prepared based on the unaudited consolidated balance sheet of the Group as at 31 December 2007 as extracted from the interim report of the Group for the six months ended 31 December 2007 after making certain pro forma adjustments resulting from the Acquisition.

The Statement is prepared based on a number of assumptions, estimates, uncertainties and currently available information, and is provided for illustrative purposes only. Accordingly, as a result of the nature of the Statement, it may not give a true picture of the actual financial position of the Enlarged Group that would have been attained had the Acquisition actually occurred on 31 December 2007. Furthermore, the Statement does not purport to predict the Enlarged Group’s future financial position.

The Statement should be read in conjunction with the financial information of the Group as set out in Appendix I of this circular and other financial information included elsewhere in this circular.

– 57 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

Non-current assets Intangible assets Plant and equipment Current assets Inventories Trade and other receivables Financial assets at fair value through profit and loss Cash and bank balances Current liabilities Trade and other payables Tax payable Net current assets Net assets	Pro forma The Enlarged The Group adjustments Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 – 208,700 (1) 418,700 210,000 (2) 3,051 3,051 3,051 421,751 91 91 2,520 2,520 31,726 31,726 60,507 60,507 94,844 94,844 1,016 1,016 1,391 1,391 2,407 2,407 92,437 92,437 95,488 514,188	Pro forma The Enlarged The Group adjustments Group (Unaudited) HK$’000 HK$’000 Notes HK$’000 – 208,700 (1) 418,700 210,000 (2) 3,051 3,051 3,051 421,751 91 91 2,520 2,520 31,726 31,726 60,507 60,507 94,844 94,844 1,016 1,016 1,391 1,391 2,407 2,407 92,437 92,437 95,488 514,188
		421,751
		91 2,520 31,726 60,507
		94,844
		1,016 1,391
		2,407
		92,437
		514,188

Notes:

• (1) Pursuant to the Co-operation Agreement dated 18 February 2008 between the Company and Xizang Medicine, the Company agreed to cooperate with Xizang Medicine to undertake the Class 1 New Drug Business through the PRC Company, a joint venture to be established and owned as to 51% and 49% by the Company and Xizang Medicine respectively. As capital contribution to the PRC Company, the Company and Xizang Medicine agreed to inject an aggregate amount of RMB200,000,000 (equivalent to approximately HK$217,400,000) and the Class 1 New Drug Business valued at RMB192,157,000 (equivalent to approximately HK$208,700,000) to the PRC Company respectively. Upon completion of the capital contribution, the PRC Company will become a subsidiary of the Company and the Class 1 New Drug Business will be owned by the Group. The adjustment represents the Class 1 New Drug Business of RMB192,157,000 (equivalent to approximately HK$208,700,000) acquired by the Group through the cooperation with Xizang Medicine and the capital contribution to the PRC Company.

• (2) Pursuant to the referral agreement dated 6 November 2007 between the Company and Mr. U Man Iong, the Company agreed to pay a referral fee of HK$34,000,000, which will be settled by the issue of 2,000,000,000 new shares of the Company (“Consideration Shares”), in connection with the acquisition of Class 1 New Drug Business by the Group and the referral fee will be capitalised as acquisition cost of Class 1 New Drug Business by the Group upon the completion of the acquisition. With reference to the closing market price of the Company’s share of HK$0.105 at 31 December 2007, the adjustment represents the fair value of the Consideration Shares of HK$210,000,000 for satisfying the payment of the referral fee by the Company.

– 58 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

B. ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, from the independent reporting accountants, RSM Nelson Wheeler, Certified Public Accountants, Hong Kong.

羅 申 美 會 計 師 行

29th Floor Caroline Centre Lee Gardens Two 28 Yun Ping Road Hong Kong

13 March 2008

The Board of Directors

Core Healthcare Investment Holdings Limited Room 609-610, 6/F., Nan Fung Tower 173 Des Voeux Road Central Hong Kong

Dear Sirs,

We report on the unaudited pro forma statement of assets and liabilities (the “Statement”) of Core Healthcare Investment Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”), which has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the acquisition of the Class 1 New Drug Business might have affected the assets and liabilities of the Group presented, for inclusion in Appendix II to the circular of the Company dated 13 March 2008 (the “Circular”). The basis of preparation of the Statement is set out on page 57 to the Circular.

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the Statement in accordance with paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock exchange of Hong Kong Limited (the “GEM Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 31(7) of Chapter 7 of the GEM Rules, on the Statement and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Statement beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

– 59 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE ENLARGED GROUP

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the Statement with the directors of the Company. The engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Statement has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purpose of the Statement as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Rules.

The Statement is for illustrative purpose only, based on the judgements and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of the financial position of the Group as at 31 December 2007 or at any future date.

Opinion

In our opinion:

• (a) the Statement has been properly compiled by the directors of the Company on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the Statement as disclosed pursuant to paragraph 31(1) of Chapter 7 of the GEM Rules.

Yours faithfully, RSM Nelson Wheeler

Certified Public Accountants

Hong Kong

– 60 –

APPENDIX III

DETAILS OF DIRECTOR PROPOSED FOR RE-ELECTION

The biographical details of the Director eligible for re-election at the EGM are set out below:

EXECUTIVE DIRECTOR

Dr. Hui Ka Wah Ronnie, JP, (“Dr. Hui”), aged 44, graduated from The University of Hong Kong and holds the qualifications of MBBS (HK), MRCP (UK), DCH (Ireland), DCH (Glasgow), FHKAM (Paed), FHKC Paed, MBA and CFA charterholders. Dr. Hui is a specialist in Paediatrics and is the principal of a private medical clinic in Hong Kong since 1991. Dr. Hui is also an independent non-executive director of CASH Financial Services Group Limited (stock code: 8122) (listed on GEM), SunCorp Technologies Limited (stock code: 1063), E2-Capital (Holdings) Limited (stock code: 378) and Winbox International (Holdings) Limited (stock code: 474) (all of which are listed on main board of the Stock Exchange). Dr. Hui is also an executive director of Town Health and HK Health Check, the issued shares of which are listed on the GEM and the main board of the Stock Exchange respectively. Dr. Hui had once been an independent non-executive director of Oriental Ginza Holdings Limited (formerly CASH Retail Management Group Limited) (stock code: 996) the issued shares are listed on the main board of the Stock Exchange.

Saved as disclosed above, Dr. Hui did not hold any directorship in any other public listed company or any other position with the Company and its subsidiaries in the past three years.

There is no service contract entered into between the Company and Dr. Hui. He has no fixed term of service with the Company and he is subject to retirement by rotation and re-election by the Shareholders pursuant to the articles of association of the Company. Dr. Hui is entitled to receive from the Company an emolument of HK$20,000 per month which is determined by the remuneration committee of the Company with reference to his duties and level of responsibilities and the prevailing market conditions.

Dr. Hui is not connected to any directors, senior management, management shareholders, substantial or controlling shareholders of the Company or any of their respective associates. Dr. Hui is the director of a subsidiary of the Group. Save as the above. He does not hold any other position with the Company’s subsidiaries. As at the date of this announcement, Dr. Hui does not have any interests in the securities of the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Save as disclosed above, the Directors consider that there is no information required to be disclosed pursuant to the requirements of Rule 17.50(2) of the GEM Listing Rules and that there are no other matters in relation to the re-election of the Director at the EGM which need to be brought to the attention of the Shareholders.

– 61 –

APPENDIX IV

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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:

1. the information contained in this circular is accurate and complete in all material respects and not misleading;

2. there are no other matters the omission of which would make any statement in this circular misleading; and

3. all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

Save as disclosed below, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had any interest or short position in the shares or underlying shares or debentures of the Company or its associated corporations, within the meaning of Part XV of the SFO, which 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 interests and short positions which they were deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by directors, to be notified to the Company and the Stock Exchange:

			Approximate
			percentage of the
			Company’s issued
			share capital
		Number of shares	as at the Latest
Name of Director	Capacity	in the Company	Practicable Date
		Long Position
Mr. Lui Chi Wah, Johnny	Beneficial owner	187,160,000	2.54%
Mr. Chan Po Kwong	Beneficial owner	2,000,000	0.03%

– 62 –

APPENDIX IV

GENERAL INFORMATION

(b) Substantial Shareholders

So far as is known to the Directors, save as disclosed below, there was no other person (other than the Directors and the chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares or underlying Shares (including any interests in options in respect of such capital), which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

		Interest	Approximate
		in the Shares	percentage of the
		or underlying	Company’s issued
		Shares	share capital
		(including	as at the
		interest	Latest Practicable
Name of Shareholder	Nature of Interest	in options)	Date
Dr. Francis	Interest by attribution5	8,223,692,080	111.41%
Choi Chee Ming JP
Dr. Cho Kwai Chee	Interest by attribution5	8,223,692,080	111.41%
Broad Idea International	Interest by attribution4	8,223,692,080	111.41%
Limited
Town Health International	Interest by attribution3	8,223,692,080	111.41%
Holdings Company
Limited (“Town Health”)
Town Health Bio-Medical	Interest by attribution3	8,223,692,080	111.41%
Technology Limited
Spring Biotech Limited	Interest by attribution3	8,223,692,080	111.41%
(“Spring Biotech”)
HK Health Check	Interest by attribution2	7,894,736,840	106.95%
and Laboratory Holdings
Company Limited
(“HK Health Check”)
Charm Advance Limited	Interest by attribution2	7,894,736,840	106.95%

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APPENDIX IV

GENERAL INFORMATION

		Interest	Approximate
		in the Shares	percentage of the
		or underlying	Company’s issued
		Shares	share capital
		(including	as at the
		interest	Latest Practicable
Name of Shareholder	Nature of Interest	in options)	Date
Classictime Investments	Interest by attribution2	7,894,736,840	106.95%
Limited (“Classictime”)
Precious Success Group	Beneficial owner1	7,894,736,840	106.95%
Limited珍成集團有限公司
(“Precious Success”)
U Man Iong	Beneficial owner6	3,000,000,000	40.64%
Chu Yuet Wah	Beneficial owner	504,440,000	6.83%

Notes:

1. Pursuant to the CB subscription agreement dated 6 November 2007, Precious Success has a long position in 7,894,736,840 shares of the Company to be allotted and issue upon the exercise in full of the convertible bonds to be issued pursuant to the CB subscription agreement (the “ Conversion Shares ”).

2. HK Health Check owns 100% of Classictime Investments through its wholly-owned subsidiary Charm Advance Limited. Classictime Investments owns 50% of Precious Success. Pursuant to the SFO, each of Classictime Investments, Charm Advance Limited and HK Health Check is deemed to have a long position in the Conversion Shares.

3. Spring Biotech owns 50% of Precious Success and is deemed under the SFO to have a long position over the Conversion Shares. Spring Biotech also owns 328,955,240 Shares.

4. Town Health owns 100% of Town Health Bio-Medical Technology Limited (“ Town Health Bio ”) which in turn owns 100% of Spring Biotech. Pursuant to the SFO, each of Town Health Bio and Town Health is deemed to have a long position over the Conversion Shares and an interest in the same block of 328,955,240 Shares held by Spring Biotech.

5. Broad Idea International Limited (“ Broad Idea ”) is interested in 47.11% of the issued share capital of Town Health and pursuant to the SFO, is deemed to have a long position in the Conversion Shares and an interest in the same block of 328,955,240 Shares Town Health is deemed to be interested in.

6. Dr. Cho Kwai Chee and Dr. Francis Choi Chee Ming, JP are interested in 50.1% and 49.9% of the issued share capital of Broad Idea respectively and each of them is deemed, pursuant to the SFO, to have a long position in the Conversion Shares and an interest in the same block of 328,955,240 Shares that Broad Idea is deemed to be interested in.

7. Mr. U Man Iong is deemed to have a long position over 3,000,000,000 shares of the Company which may be allotted and issue pursuant to the Referral Agreement.

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APPENDIX IV

GENERAL INFORMATION

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group (save for contracts expiring or determinable by the relevant member of the Group within one year without payment of compensation (other than statutory compensation)).

4. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by the Group within the two years immediately preceding the date of this circular:

1. a conditional placing agreement dated 12 June 2007 with Kingston Securities Limited (“ Kingston Securities ”) pursuant to which Kingston Securities agreed, on a fully underwritten basis, procure purchasers to subscribe for 74,836,000 new Shares at the placing price of HK$0.17 per Share, which was completed on 11 July 2007; and

2. a conditional placing agreement dated 12 June 2007 with Kingston Securities pursuant to which Kingston Securities agreed, on a fully underwritten basis, procure purchasers to subscribe for 229,552,000 new Shares at the placing price of HK$0.17 per Share, which was completed on 6 September 2007.

3. a conditional placing agreement dated 6 November 2007 with Atlantis Investment Management Limited pursuant to which Atlantis Investment Management Limited agreed, on a fully underwritten basis, procure purchasers to subscribe for 30,000,000 new Shares at the placing price of HK$0.17 per Share, which was completed on 31 December 2007;

4. a conditional convertible bonds subscription agreement entered into with Precious Success dated 6 November 2007 in relation to the subscription by Precious Success of convertible bonds to be issued by the Company in the principal amount of HK$150,000,000, which can be exercised and converted into 7,894,736,840 conversion shares at an initial conversion price of HK$0.019 per conversion share;

5. a referral agreement entered into between a third party independent referral agent and the Company dated 6 November 2007 in relation to the issue and allotment of a maximum consideration shares of 3,000,000,000 to the referral agent, which shall be issued and credited as fully paid up at HK$0.017 per consideration share;

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APPENDIX IV

GENERAL INFORMATION

5. LITIGATION

As at the Latest Practicable Date, none of the members of the Group was engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

6. INTERESTS IN ASSETS AND/OR CONTRACTS AND OTHER INTERESTS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been, since 30 June 2007, being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement which is significant in relation to the business of the Company.

7. EXPERTS AND CONSENTS

Name	Qualification
RSM Nelson Wheeler	certified public accountants
Grant Sherman Appraisal Limited	independent valuer

Each of RSM Nelson Wheeler and Grant Sherman Appraisal Limited has given, and has not withdrawn, its written consent to the issue of this circular with the inclusion herein of its letter and/or references to its name, in the form and context in which it appears.

As at the Latest Practicable Date, each of RSM Nelson Wheeler and Grant Sherman Appraisal Limited was not interested in any Share or share in any member of the Group nor did it have any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any Share or share in any member of the Group.

As at the Latest Practicable Date, each of RSM Nelson Wheeler and Grant Sherman Appraisal Limited did not have any direct or indirect interest in any asset which had been, since 30 June 2007, being the date to which the latest published audited financial statements of the Company were made up, acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

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APPENDIX IV

GENERAL INFORMATION

8. POLL PROCEDURE

Pursuant to Article 76 of the articles of association of the Company, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is required under the GEM Listing Rules or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded by:

• (a) the chairman of such meeting; or

• (b) at least five Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy for the time being entitled to vote at the meeting; or

• (c) any Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and representing not less than one-tenth of the total voting rights of all Shareholders having the right to attend and vote at the meeting; or

• (d) any Shareholder or Shareholders present in person or in the case of a Shareholder being a corporation by its duly authorized representative or by proxy and holding shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right; or

• (e) if required by the GEM Listing Rules, the chairman of the meeting and/or any Director holding the proxies shall demand a poll, if such aggregate proxies held individually or collectively by (i) the Chairman of a particular meeting, and/or (ii) the Directors, account for 5% or more of the total voting rights at that meeting, and if on a show of hands in respect of any resolution, the meeting votes in the opposition manner to that instructed in those proxies.

9. GENERAL

• (a) So far as is known to the Directors, as at the Latest Practicable Date, none of the Directors or management shareholders (as defined in the GEM Listing Rules) had any business or any interest which competed or may compete with the business of the Group or had or may have any other conflicts of interest with the Group.

• (b) The registered office of the Company is situated at Ugland House, P.O. Box 309 GT, South Church Street, Grand Cayman, Cayman Islands. The head office and principal place of business of the Company in Hong Kong is situated at Rooms 609–610, 6/F Nan Fung Tower, 173 Des Voeux Road, Central, Hong Kong.

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APPENDIX IV

GENERAL INFORMATION

• (c) The compliance officer of the Company is Mr. Lui Chi Wah, Johnny. Mr. Lui, aged 47, is a prominent and seasoned financial professional. He has been financial analyst for major brokerage firms, and stock commentator and columnist for public media. With more than fifteen years experience in Hong Kong’s financial sector, Mr. Lui has gained strong rapport with entrepreneurs and has developed close ties with many enterprises, especially those in the medical and healthcare industry in Hong Kong and China. He was appointed as compliance officer of the Company on 22 August 2006.

• (d) The company secretary and qualified accountant of the Company is Ms. Chan Lai Yee, an associate member of the Association of Chartered Certified Accountants and a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants.

• (e) The branch share registrar and transfer office of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited at 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (f) The Company has established an audit committee with written terms of reference in compliance with the GEM Listing Rules. The primary duty of the audit committee is to review the Company’s annual report and accounts, interim reports and quarterly reports and to provide advice and comments thereon to the Board. The audit committee is also responsible for reviewing and supervising the Group’s financial reporting and internal control procedures. The audit committee comprises three independent non-executive Directors, namely Mr. Kwok Shun Tim, Mr. Chan Po Kwong and Mr. Lam Yan Wing. Mr. Kwok Shun Tim is the chairman of the committee since his appointment on 13 September 2006.

Mr. Kwok Shun Tim, aged 33, graduated from Hong Kong University of Science and Technology (bachelor of business administration), and obtained his master degree from Hong Kong Polytechnic University (China business studies). Mr. Kwok is chief financial officer of Tianjin Tianlian Public Utilities Company Limited (stock code: 8290). He is also a non-executive director of China Leason Investment Group Co., Ltd (stock code: 8270). Mr. Kwok is member of The Association of Chartered Certified Accountants and Hong Kong Institute of Certified Public Accountants. Mr. Kwok is experienced in the field of corporate finance, financial management and audit. Mr. Kwok was appointed as independent non-executive Director, chairman and a member of audit committee and a member of remuneration committee of the Company on 13 September 2006.

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APPENDIX IV

GENERAL INFORMATION

Mr. Chan Po Kwong, aged 52, is a merchant for the past twenty years. He has been engaging in real estates business in Hong Kong and overseas. He has worked in key executive positions in different trades, services including retail and wholesale of importing products for Hong Kong, Asian countries and Mainland China. Mr. Chan is a director of various companies with extensive experience in business restructuring, corporate financing and investments. Mr. Chan was appointed as an independent non-executive Director on 1 December 2004.

Mr. Lam Yan Wing, aged 56, graduated from the Chinese University of Hong Kong with a bachelor degree in business administration. Mr. Lam is also a full member of the Hong Kong Securities Institute. He is a seasoned banker and an all-round financial veteran with more than 30 years experience in banking and investment. He is currently running his own private company, Brilliance GC Limited, which provides corporate and financial advisory services. Prior to setting up his own company, Mr. Lam had held senior positions with Chase Manhattan Bank, The Industrial Bank of Japan and Elec & Eltek. Mr. Lam was appointed as independent non-executive Director and a member of audit committee and a member of remuneration committee of the Company on 30 January 2007.

• (g) In the event of any inconsistency, the English language text of this circular shall prevail over the Chinese language text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection at the office of the Company at Rooms 609–610, 6/F, Nan Fung Tower, 173 Des Voeux Road, Central, Hong Kong during normal business hours from 9:00 a.m. to 6:00 p.m. from Monday to Friday (except for public holidays), from the date of this circular to the date of the EGM (both days inclusive):

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

• (b) the contracts referred to in the section headed “Material Contracts” in this appendix;

• (c) the written consents referred to under the section headed “Experts and Consents” in this appendix;

• (d) the annual reports of the Company for two years ended 30 June 2007, and the interim report of the Company for the six months ended 31 December 2007;

• (e) the letter on unaudited pro forma financial information on the Enlarged Group, the text of which is set out in Appendix II to this circular;

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APPENDIX IV

GENERAL INFORMATION

• (f) the valuation report in respect of the value of the Class 1 New Drug prepared by Grant Sherman Appraisal Limited;

• (g) the circular of the Company dated 6 December 2007 relating to the (i) placing of new shares; (ii) issue of convertible bonds and whitewash waiver; (iii) possible issue of new shares under the referral agreement; and (iv) increase in authorized share capital.

– 70 –

NOTICE OF EGM

==> picture [69 x 52] intentionally omitted <==

CORE HEALTHCARE INVESTMENT HOLDINGS LIMITED 確思醫藥投資控股有限公司[*]

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 8250)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Core Healthcare Investment Holdings Limited (the “Company”) will be held at Rooms 609–610, 6/F, Nan Fung Tower, 173 Des Voeux Road Central, Hong Kong on Monday, 31 March 2008 at 10:00 a.m. for the following purposes:

• (1) To consider and approve the re-election of Dr. Hui Ka Wah Ronnie, JP as director of the Company; and

• (2) To consider and, if thought fit, passing with or without notification, the following resolution as an ordinary resolution:

“ THAT : the agreement dated 18 February 2008 entered into between the Company and 西藏諾迪康藥業股份有限公司 (Xizang Rhodiola Pharmaceutical Co. Ltd.) (“ Xizang Medicine ”), pursuant to which the Company has agreed to co-operate with Xizhang Medicine to develop, manufacture and sell Natriuretic Peptide （凍干重組人腦利納 ）in the People’s Republic of China through a joint venture to be established and owned as to 51% and 49% by the Company and Xizang Medicine respectively (the “ Co-operation Agreement ”) (a copy of which is tabled at this meeting and marked “A” and initialed by the chairman of this meeting for the purpose of identification) and all transactions contemplated thereunder be and are hereby approved, ratified and confirmed and any one director of the Company, or any two directors of the Company if affixation of the common seal of the Company is required, be and is/are hereby authorised for and on behalf of the Company to execute all such documents, instruments, agreements and deed, and do all such acts, matters and things as he/she/they may in his/her/their absolute discretion consider necessary or desirable for the purpose of and in connection with the

• for identification purpose only

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NOTICE OF EGM

implementation of the Co-operation Agreement and the transactions contemplated thereunder and to agree to such variations of the terms of the Co-operation Agreement as he/she/they may in his/her/their absolute discretion consider necessary or desirable.”

By order of the Board of Core Healthcare Investment Holdings Limited Lui Chi Wah, Johnny Chairman

Hong Kong, 13 March 2008

Registered office: Principal Place of Ugland House Business in Hong Kong: P.O. Box 309GT Rooms 609–610, South Church Street 6/F, Nan Fung Tower Grand Cayman 173 Des Voeux Road Cayman Islands Central Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint another person to attend and vote instead of him. A proxy need not be a shareholder of the Company.

2. To be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, at the offices of the Company’s share registrar in Hong Kong, Computershare Hong Kong Investors Services Limited, at 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

3. Delivery of an instrument appointing a proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

4. As at the date of this notice, the executive Directors are Mr. Lui Chi Wah, Johnny and Mr. Wu Kai; the non-executive Director is Mr. Lau Kam Shan; and the independent non-executive Directors are Mr. Kwok Shun Tim, Mr. Chan Po Kwong and Mr. Lam Yan Wing.

– 72 –