PegBio Co., Ltd. — AGM Information 2011

Jul 22, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*] (Incorporated in Bermuda with limited liability) (Stock Code: 1141)

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

A notice convening the annual general meeting of Beijing Yu Sheng Tang Pharmaceutical Group Limited to be held at Plaza 3, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Friday, 26 August 2011 at 10:30 a.m. is set out on pages 12 to 15 of this circular. Whether or not you are able to attend and vote at the annual general meeting, you are requested to read the notice and to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the annual general meeting or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the annual general meeting or any adjourned meeting thereof should you so wish and in such event, the form of proxy shall be deemed to be revoked.

• For identification purpose only

25 July 2011

CONTENTS

		Page
DEFINITIONS.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM	THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
APPENDIX I	– EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
APPENDIX II	– DETAILS OF THE RETIRING DIRECTORS
	PROPOSED FOR RE-ELECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
AGM NOTICE.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

DEFINITIONS

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

“AGM”	the annual general meeting of the Company to be held at Plaza
	3, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road,
	Wanchai, Hong Kong on Friday, 26 August 2011 at 10:30 a.m.
“AGM Notice”	the notice convening the AGM as set out on pages 12 to 15 of this
	circular
“Board”	the board of Directors
“Bye-laws”	the Bye-laws of the Company
“Company”	Beijing Yu Sheng Tang Pharmaceutical Group Limited, a
	company incorporated in Bermuda with limited liability, the
	shares of which are listed on the main board of the Stock
	Exchange
“Directors”	the directors of the Company
“Excelsior Kingdom”	Excelsior Kingdom Limited, a company incorporated in the
	British Virgin Islands and is wholly owned by Mr. Suen
“Global Wealthy”	Global Wealthy Limited, a company incorporated in the British
	Virgin Islands, being the substantial Shareholder of the Company
	and is wholly owned by Excelsior Kingdom
“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	Hong Kong Special Administrative Region of the People’s
	Republic of China
“Issue Mandate”	a general mandate proposed to be granted to the Directors at the
	AGM to allot, issue and deal with authorised and unissued Shares
	of up to 20% of the aggregate nominal amount of the issued share
	capital of the Company as at the date of passing of the relevant
	resolution
“Latest Practicable Date”	20 July 2011, being the latest practicable date prior to the printing
	of this circular for ascertaining certain information contained in
	the circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange

1

	DEFINITIONS
“Mr. Suen”	Mr. Suen Cho Hung, Paul, an Executive Director, the Chairman
	and the substantial Shareholder of the Company
“Repurchase Mandate”	a general mandate proposed to be granted to the Directors at the
	AGM to repurchase Shares not exceeding 10% of the aggregate
	nominal amount of the issued share capital of the Company as at
	the date of passing of the relevant resolution
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the capital of the Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Codes on Takeovers and Mergers
“%”	per cent.

2

LETTER FROM THE BOARD

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BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

Executive Directors: Mr. Suen Cho Hung, Paul (Chairman) Mr. Sue Ka Lok (Chief Executive Officer) Mr. Bai Jianjiang Ms. Lee Chun Yeung, Catherine

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Independent Non-executive Directors: Mr. Wong Kwok Tai Mr. Weng Yixiang Mr. Lu Xinsheng

Head Office and Principal Place of Business in Hong Kong: Suite 1501, 15/F. Great Eagle Centre 23 Harbour Road Wanchai Hong Kong

25 July 2011

To the Shareholders,

Dear Sir or Madam,

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

1. INTRODUCTION

The purpose of this circular is to provide you with information in respect of the resolutions to be proposed at the AGM for the approval of (a) the granting to the Directors of the Issue Mandate; (b) the granting to the Directors of the Repurchase Mandate; (c) the extension of the Issue Mandate by adding to it the aggregate number of Shares repurchased under the Repurchase Mandate and (d) the re-election of the retiring Directors.

• For identification purpose only

3

LETTER FROM THE BOARD

2. GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES

At the AGM, ordinary resolutions will be proposed to grant to the Directors the Issue Mandate and the Repurchase Mandate. Conditional upon the above resolutions being passed, a separate resolution will be proposed to extend the Issue Mandate by adding to it the aggregate number of Shares repurchased under the Repurchase Mandate. Details of these resolutions are contained in the AGM Notice.

As at the Latest Practicable Date, the issued share capital of the Company comprised 4,118,479,760 Shares. Assuming that there is no change in the issued share capital of the Company during the period between the Latest Practicable Date and the date of the AGM, the maximum number of Shares which may be issued pursuant to the Issue Mandate on the date of passing the resolution approving the Issue Mandate will be 823,695,952 Shares and the maximum number of Shares which may be repurchased pursuant to the Repurchase Mandate on the date of the AGM will be 411,847,976 Shares.

In accordance with the requirements of the Listing Rules, the Company is required to send to Shareholders an explanatory statement containing all the information reasonably necessary to enable them to make an informed decision on whether to vote for or against the granting of the Repurchase Mandate. The explanatory statement as required by the Listing Rules in connection with the Repurchase Mandate is set out in Appendix I to this circular.

3. RE-ELECTION OF THE RETIRING DIRECTORS

The Board currently consists of seven Directors, namely Mr. Suen Cho Hung, Paul, Mr. Sue Ka Lok, Mr. Bai Jianjiang, Ms. Lee Chun Yeung, Catherine, Mr. Wong Kwok Tai, Mr. Weng Yixiang and Mr. Lu Xinsheng.

Pursuant to bye-law 86(2) of the Bye-laws, Ms. Lee Chun Yeung, Catherine will hold office until the AGM and, being eligible, will offer herself for re-election at the AGM.

Pursuant to bye-law 87 of the Bye-laws, Mr. Suen and Mr. Wong Kwok Tai will retire by rotation at the AGM and, being eligible, will offer themselves for re-election at the AGM.

Details of the retiring Directors proposed to be re-elected at the AGM are set out in Appendix II to this circular.

4. VOTING AT THE AGM

For the purpose of compliance with Rule 13.39(4) of the Listing Rules, the Company will procure the Chairman of the AGM to demand for a poll for the ordinary resolutions put to the vote of the AGM in accordance with the Bye-laws.

4

LETTER FROM THE BOARD

5. ACTION TO BE TAKEN

The AGM Notice is set out on pages 12 to 15 of this circular. A form of proxy for use at the AGM is also enclosed. Whether or not you are able to attend and vote at the AGM, you are requested to read the notice and to complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the AGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjourned meeting thereof should you so wish and in such event, the form of proxy shall be deemed to be revoked.

6. RECOMMENDATION

The Directors consider that the proposed resolutions referred in this circular and the AGM Notice are in the best interests of the Company and the Shareholders as a whole. The Directors therefore recommend Shareholders to vote in favour of all the resolutions set out in the AGM Notice.

7. RESPONSIBILITY STATEMENT

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

8. ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the Appendices I (Explanatory Statement) and II (Details of the retiring Directors proposed for re-election) of this circular.

Yours faithfully, On behalf of the Board

Sue Ka Lok

Chief Executive Officer

5

EXPLANATORY STATEMENT

APPENDIX I

The following is an explanatory statement required by the Listing Rules to be sent to Shareholders to enable them to make an informed decision on whether to vote for or against the ordinary resolution to be proposed at the AGM in relation to the granting of the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 4,118,479,760 Shares. Subject to the passing of the ordinary resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased from the Latest Practicable Date up to the date of the AGM, the Company would be allowed under the Repurchase Mandate to repurchase a maximum of 411,847,976 Shares, representing 10% of the issued shares of the Company as at the date of the AGM.

2. SOURCE OF FUNDS

In repurchasing Shares, the Company may only apply funds legally available for the purpose and in accordance with the Company’s constitutive documents and the laws of the jurisdiction in which the Company is incorporated or otherwise established. Bermuda laws provide that funds used for a share repurchase may only be paid out of the capital paid up on the relevant shares, or the funds of the Company that would otherwise be available for dividend or distribution, or the proceeds of a fresh issue of shares made for the purpose. The amount of premium, if any, payable on a repurchase may only be paid out of either the funds of the Company that would otherwise be available for dividend or distribution or out of the share premium account of the Company before the shares are repurchased.

3. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from Shareholders to enable the Company to repurchase its Shares on the Stock Exchange. Such repurchases may, depending on the market conditions, and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders as a whole.

4. IMPACT OF REPURCHASES

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the consolidated financial position of the Company as at 31 March 2011, being the date of the latest published audited financial statements of the Company) in the event that the Repurchase Mandate is exercised in full. The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

6

EXPLANATORY STATEMENT

APPENDIX I

5. SHARES PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the last twelve months before the Latest Practicable Date were as follows:

Month	Highest	Lowest
	HK$	HK$
2010
July	0.560	0.425
August	0.485	0.320
September	0.460	0.300
October	0.350	0.238
November	0.400	0.248
December	0.490	0.295
2011
January	0.350	0.280
February	0.320	0.250
March	0.275	0.235
April	0.275	0.167
May	0.177	0.131
June	0.154	0.117
July (up to the Latest Practicable Date)	0.153	0.120

6. EFFECT OF THE TAKEOVERS CODE

If, on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a Shareholder, or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code for all the Shares not already owned by such Shareholder or group of Shareholders.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, Global Wealthy beneficially owned 437,433,866 Shares, representing approximately 10.62% of the total issued share capital of the Company. Global Wealthy is wholly owned by Excelsior Kingdom which in turn is wholly owned by Mr. Suen. Together with the 10,000,000 Shares beneficially owned by him, Mr. Suen is deemed to be interested in a total of 447,433,866 Shares, representing approximately 10.86% of the issued share capital of the Company.

7

EXPLANATORY STATEMENT

APPENDIX I

On the basis that the issued share capital of the Company and the shareholdings of Global Wealthy and Mr. Suen in the Company remain unchanged immediately before the full exercise of the Repurchase Mandate, in the event that the Directors exercise in full the power to repurchase Shares in accordance with the terms of the relevant ordinary resolution to be proposed at the AGM, the interests of Mr. Suen in the issued Shares would be increased to approximately 12.07% of the total issued share capital of the Company. Such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

Save as aforesaid, the Directors are not aware of any other consequences, which will arise under the Takeovers Code as a result of any repurchases to be made under the Repurchase Mandate.

7. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSONS

To the best of the knowledge of the Directors, having made all reasonable enquiries, none of the Directors nor any of their respective associates (as defined in the Listing Rules) has any present intention to sell any Shares to the Company in the event that the Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any connected persons (as defined in the Listing Rules) of the Company that they have a present intention to sell any Shares to the Company, or that they have undertaken not to sell any Shares held by them to the Company in the event that the granting of the Repurchase Mandate is approved by the Shareholders.

8. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the power of the Company to make repurchases of Shares pursuant to the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Bermuda.

9. REPURCHASES OF SHARES MADE BY THE COMPANY

The Company has not repurchased any Shares whether on the Stock Exchange or otherwise, in the six months preceding the Latest Practicable Date.

10. GENERAL

The Listing Rules prohibit a company from making repurchase on the Stock Exchange if the result of the repurchase would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the company’s issued share capital would be in public hands. The Directors do not intend to repurchase Shares which would result in less than the prescribed minimum percentage of Shares in public hands.

8

DETAILS OF THE RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

The following are the details of the retiring Directors proposed to be re-elected at the AGM.

Ms. Lee Chun Yeung, Catherine, Executive Director

Ms. Lee, aged 43, joined the Group in February 2009 and was appointed as an Executive Director in October 2010. Ms. Lee is also a director of various members of the Group. Ms. Lee holds a Bachelor of Arts degree from Guangdong University of Foreign Studies (formerly known as Guangzhou Institute of Foreign Languages) and a Master in Business Administration degree from the University of South Australia. Ms. Lee has extensive experience in international trading of metal minerals and commodities and oversees the Group’s operation of supply and procurement of metal minerals and recyclable metal materials. Prior to joining the Group, Ms. Lee worked as an economist in a major commercial bank and a senior executive in a state-owned trading group in the People’s Republic of China (the “PRC”).

Ms. Lee has not held any directorship in other public companies the securities of which are listed on any securities market in Hong Kong or overseas for the last three years.

As at the Latest Practicable Date, Ms. Lee did not have any interest in the Shares within the meaning of Part XV of the SFO.

Ms. Lee does not have any relationship with any other Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

There is a service contract entered into between a subsidiary of the Company and Ms. Lee. According to the service contract, Ms. Lee is not appointed for any specific length or proposed length of service and her term of service shall continue unless terminated by either party by giving to the other two months’ prior notice in writing. The directorship of Ms. Lee with the Company is subject to retirement by rotation and re-election in accordance with the Bye-laws. Ms. Lee is entitled to receive a remuneration of HK$955,500 per annum (pro-rata adjusted for any period shorter than a year) which has been approved by the Remuneration Committee based on her qualifications, experience, level of responsibilities undertaken, contribution to the Company and prevailing market conditions. Ms. Lee may also be entitled to receive discretionary bonuses or other benefits as may be decided by the Remuneration Committee having regard to Ms. Lee’s and the Company’s performance. The director’s remuneration of Ms. Lee is subject to annual review by the Remuneration Committee. The director’s remuneration of Ms. Lee for the year ended 31 March 2011 amounted to approximately HK$1,614,000.

Save as disclosed above, Ms. Lee has confirmed that there is no other information which is required to be disclosed pursuant to the requirements of Rule 13.51(2) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

9

DETAILS OF THE RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Mr. Suen Cho Hung, Paul, Executive Director and Chairman

Mr. Suen, aged 50, joined the Company as an Executive Director and the Chairman of the Company in November 2007 and is also a director of various members of the Group. Mr. Suen holds a Master of Business Administration degree from the University of South Australia. Mr. Suen has extensive experience in managing metal, minerals and raw materials, energy and property business ventures as well as in strategic planning and corporate management of business enterprises in Hong Kong and the PRC. Mr. Suen is also an executive director and the chairman of BEP International Holdings Limited (“BEP”) (stock code: 2326), a listed company in Hong Kong and was an executive director and the chairman of China Yunnan Tin Minerals Group Company Limited (stock code: 263), a listed company in Hong Kong.

Save as disclosed above, Mr. Suen has not held any other directorship in other public companies the securities of which are listed on any securities market in Hong Kong or overseas for the last three years.

As at the Latest Practicable Date and within the meaning of Part XV of the SFO, Mr. Suen is deemed to be interested in 463,433,866 Shares, representing 11.25% of the total issued share capital of the Company. Among which, 437,433,866 Shares were held by Global Wealthy, 10,000,000 Shares were directly beneficially owned by Mr. Suen and 16,000,000 underlying Shares were issuable under share options granted by the Company to Mr. Suen on 1 September 2009.

Mr. Suen and Mr. Sue Ka Lok (“Mr. Sue”) (an Executive Director and the Chief Executive Officer of the Company) are also executive directors of BEP of which Mr. Suen is also a controlling shareholder. Mr. Suen is also a controlling shareholder of China Tycoon Beverage Holdings Limited (“China Tycoon”) (stock code: 209), a company listed in Hong Kong, of which Mr. Sue is a non-executive director and the chairman and Mr. Wong Kwok Tai, an Independent Non-executive Director of the Company, is an independent non-executive director.

Save as disclosed above, Mr. Suen does not have any other relationship with any other Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

There is a service contract entered into between the Company and Mr. Suen. According to the service contract, Mr. Suen is not appointed for any specific length or proposed length of service and his term of service shall continue unless terminated by either party by giving to the other three months’ prior notice in writing. The directorship of Mr. Suen with the Company is subject to retirement by rotation and re-election in accordance with the Bye-laws. Mr. Suen is entitled to receive a remuneration of HK$1,950,000 per annum (pro-rata adjusted for any period shorter than a year) which has been approved by the Remuneration Committee based on his qualifications, experience, level of responsibilities undertaken, contribution to the Company and prevailing market conditions. Mr. Suen may also be entitled to receive discretionary bonuses or other benefits as may be decided by the Remuneration Committee having regard to Mr. Suen’s and the Company’s performance. The director’s remuneration of Mr. Suen is subject to annual review by the Remuneration Committee. The director’s remuneration of Mr. Suen for the year ended 31 March 2011 amounted to approximately HK$2,047,000.

10

DETAILS OF THE RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Save as disclosed above, Mr. Suen has confirmed that there is no other information which is required to be disclosed pursuant to the requirements of Rule 13.51(2) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

Mr. Wong Kwok Tai, Independent Non-executive Director, Chairman of the Audit Committee and member of the Remuneration Committee

Mr. Wong, aged 72, joined the Company as an Independent Non-executive Director in August 2001. Mr. Wong graduated from the Deakin University in Geelong, Australia and holds a Diploma of Commerce. Mr. Wong is a Practising Certified Public Accountant and a fellow member of the CPA Australia and the Hong Kong Institute of Certified Public Accountants. Mr. Wong is the director of W. Wong CPA Limited and has more than 45 years of financial experience. Mr. Wong is also an independent non-executive director of China Power New Energy Development Company Limited (stock code: 735), New Century Group Hong Kong Limited (stock code: 234), China Tycoon and Takson Holdings Limited (stock code: 918), all being listed companies in Hong Kong.

Save as disclosed above, Mr. Wong has not held any other directorship in other public companies the securities of which are listed on any securities market in Hong Kong or overseas for the last three years.

As at the Latest Practicable Date, Mr. Wong did not have any interest in the Shares within the meaning of Part XV of the SFO.

As referred to above, save for Mr. Wong’s role as an independent non-executive director in China Tycoon of which Mr. Suen is a controlling shareholder, Mr. Wong does not have any other relationship with any other Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

There is no service contract between the Company and Mr. Wong. Mr. Wong is not appointed for any specific length or proposed length of service with the Company but is subject to retirement by rotation and re-election in accordance with the Bye-laws. Mr. Wong is entitled to receive an annual director’s fee in the sum of HK$120,000 which was recommended by the Remuneration Committee and approved by the Board based on his qualifications, experience, level of responsibilities undertaken, contribution to the Company and prevailing market conditions. Mr. Wong’s director fee is subject to annual review by the Remuneration Committee and the Board. The director fee of Mr. Wong for the year ended 31 March 2011 amounted to HK$120,000.

Save as disclosed above, Mr. Wong has confirmed that there is no other information which is required to be disclosed pursuant to the requirements of Rule 13.51(2) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

11

AGM NOTICE

==> picture [117 x 50] intentionally omitted <==

BEIJING YU SHENG TANG PHARMACEUTICAL GROUP LIMITED 北京御生堂藥業集團有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1141)

NOTICE IS HEREBY GIVEN that an annual general meeting of Beijing Yu Sheng Tang Pharmaceutical Group Limited (the “Company”) will be held at Plaza 3, Lower Lobby, Novotel Century Hong Kong, 238 Jaffe Road, Wanchai, Hong Kong on Friday, 26 August 2011 at 10:30 a.m. for the following purposes:

1. To receive, consider and adopt the audited financial statements and the reports of the directors and auditors of the Company for the year ended 31 March 2011.

2. To re-elect the retiring directors of the Company and to authorise the Board of Directors of the Company to fix the directors’ remuneration.

3. To re-appoint HLB Hodgson Impey Cheng as auditors of the Company and to authorise the Board of Directors of the Company to fix their remuneration.

4. As special business, to consider and, if thought fit, pass, with or without amendments, the following resolutions as ordinary resolutions of the Company:

5. (A) “ THAT:

   • (a) subject to paragraph (c) of this resolution, the exercise by the directors of the Company (the “Directors”) during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with authorised and unissued shares in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any securities carrying rights to subscribe for or convert or exercise into shares of the Company) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

   • (b) the approval in paragraph (a) of this resolution shall authorise the Directors to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any securities carrying rights to subscribe for or convert or exercise into shares of the Company) during the Relevant Period which would or might require the exercise of such powers after the end of the Relevant Period;

• For identification purpose only

12

AGM NOTICE

• (c) the aggregate nominal amount of the share capital allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to:

• (i) a Rights Issue (as hereinafter defined);

• (ii) the exercise of options under a share option scheme of the Company;

• (iii) the exercise of rights of subscription or conversion under the terms of any securities issued by the Company which are convertible or exercisable into shares of the Company; or

• (iv) any scrip dividend scheme or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on the shares of the Company in accordance with the Bye-laws of the Company from time to time;

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

• (d) for the purpose of this resolution:

“Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

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

• (ii) the revocation or variation of the authority given under this resolution by an ordinary resolution passed by the Company’s shareholders in general meetings; and

• (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held.

“Rights Issue” means an offer of shares open for a period fixed by the Directors to holders of shares of the Company or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction or the requirements of any recognised regulatory body or any stock exchange).”

13

AGM NOTICE

(B) “ THAT:

• (a) subject to paragraph (b) of this resolution, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase its shares, subject to and in accordance with the applicable laws, be and is hereby generally and unconditionally approved;

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

• (c) for the purposes of this resolution:

  • “Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

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

  • (ii) the revocation or variation of the authority given under this resolution by an ordinary resolution passed by the Company’s shareholders in general meetings; and

  • (iii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws of the Company or any applicable laws to be held.”

• (C) “ THAT conditional upon the passing of the resolutions numbered 4(A) and 4(B) as set out in the notice convening this meeting (the “Notice”), the general mandate referred to in the resolution numbered 4(A) of the Notice be and is hereby extended by the addition to the aggregate nominal amount of the shares which may be allotted and issued or agreed conditionally or unconditionally to be allotted and issued by the directors of the Company pursuant to such general mandate of an amount representing the aggregate nominal amount of the shares repurchased by the Company pursuant to the general mandate referred to in the resolution numbered 4(B) of the Notice, provided that such amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of this resolution.”

By Order of the Board Sue Ka Lok

Chief Executive Officer

Hong Kong, 25 July 2011

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AGM NOTICE

Head Office and Principal Place of Business in Hong Kong: Suite 1501, 15/F.,

Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong

Notes:

1. Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member of the Company who is an individual or a member of the Company which is a corporation is entitled to exercise the same powers on behalf of the member of the Company which he or they represent as such member of the Company could exercise.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such instrument of proxy on behalf of the corporation without further evidence of the fact.

3. The instrument appointing a proxy and (if required by the Board of Directors of the Company) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the annual general meeting or adjourned meeting thereof at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.

4. Delivery of an instrument appointing a proxy shall not preclude a member 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.

5. Where there are joint holders of any share, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

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