THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

Transcription

1 CIRCULAR DATED 7 DECEMBER 2009 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. This Circular is issued by Tianjin Zhongxin Pharmaceutical Group Corporation Limited (the Company ). If you are in any doubt about its contents or the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional adviser immediately. If you have sold or transferred all your shares in the capital of the Company, please forward this Circular and the enclosed Notice of Extraordinary General Meeting and Proxy Form immediately to the purchaser or transferee or to the bank, stockbroker or agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee. The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. (Incorporated in the People s Republic of China) (Company Registration No.: ) CIRCULAR TO SHAREHOLDERS in relation to: (1) PROPOSED RE-ELECTION OF DIRECTORS; (2) THE LOAN FACILITIES GRANTED TO THE COMPANY AGGREGATING TO A LIMIT OF RMB280 MILLION; AND (3) PROPOSED RECOMMENCEMENT OF OPERATION OF THE COMPANY S SUBSIDIARY, NAMELY, XINXIN PHARMACEUTICAL MANUFACTURING CO., LTD. ( ) IMPORTANT DATES AND TIMES: Last date and time for lodgement of Proxy Form : 21 December 2009 at 12:00 p.m. Date and time of Extraordinary General Meeting : 23 December 2009 at 9.00 a.m. Venue of Extraordinary General Meeting : Conference Room 703, Zhong Xin Mansion, 17 Baiti Road, Nankai District, Tianjin, PRC

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3 CONTENTS Page DEFINITIONS LETTER TO SHAREHOLDERS 1. INTRODUCTION RE-ELECTION OF DIRECTORS THE LOAN FACILITIES GRANTED TO THE COMPANY AGGREGATING TO A LIMIT OF RMB280 MILLION PROPOSED RECOMMENCEMENT OF OPERATION OF XINXIN PHARMACEUTICAL 5 5. DIRECTORS RECOMMENDATION NOTICE OF EGM ACTION TO BE TAKEN BY SHAREHOLDERS DIRECTORS RESPONSIBILITY STATEMENT DOCUMENTS FOR INSPECTION NOTICE OF EXTRAORDINARY GENERAL MEETING PROXY FORM 1

4 DEFINITIONS In this Circular, the following definitions apply throughout unless otherwise stated: Articles : The Articles of Association of the Company Board or Directors : The board of Directors of the Company as at the date of this Circular CDP : The Central Depository (Pte) Ltd Company : Tianjin Zhongxin Pharmaceutical Group Corporation Limited Director : A person holding office as a director for the time being of the Company EGM : The extraordinary general meeting of the Company to be convened on 23 December 2009, notice of which is set out on page 8 of this Circular FY : Financial Year ended, or as the case may be, ended 31 December Group : The Company and its subsidiaries as at the date of this Circular Group Company : The Company or any of its subsidiaries Latest Practicable Date : 25 November 2009, being the latest practicable date prior to the printing of this Circular Listing Manual : The listing rules of the SGX-ST, as amended, supplemented or modified, from time to time Nomination Committee : The nomination committee of the Company, being Mr Gao Xuemin, Mr Shao Biao and Mr Chen Timothy Teck-Leng as at the date of this Circular PRC : The People s Republic of China RMB : PRC Renminbi SGX-ST : Singapore Exchange Securities Trading Limited S Shares or Ordinary Shares : Ordinary shares issued by the Company under PRC company laws, comprising shares issued to natural and legal persons in countries other than PRC and which are subscribed in US$ Securities Account : A securities account maintained by a Depositor with CDP but does not include a securities sub-account maintained with a Depository Agent Shareholders : Registered holders of Shares in the Register of Members except that where CDP is the registered holder, the term Shareholders shall, in relation to such Shares and where the context so admits, mean the Depositors whose Securities Account are credited with such Shares 2

5 Singapore Act : The Companies Act, Cap. 50, of Singapore, as amended, supplemented or modified, from time to time Substantial Shareholder : A person who holds directly or indirectly five per cent. or more of the issued capital in the Company as at the date of this Circular Xinxin Pharmaceutical : Xinxin Pharmaceutical Manufacturing Co., Ltd. ( ) US$ : United States dollars % or per cent. : Percentage or per centum The terms Depositor, Depository Agent and Depository Register shall have the same meanings ascribed to them in section 130A of the Singapore Act. The term Direct Account Holder shall have the meaning ascribed to the term account holder in section 130A of the Singapore Act. The term subsidiary shall have the meaning ascribed to it by Section 5 of the Singapore Act. The terms associate and associated company shall have the meanings ascribed to them respectively in the section on Definitions and Interpretations of the Listing Manual. Words importing the singular shall, where applicable, include the plural and vice versa, and words importing the masculine gender shall, where applicable, include the feminine and neuter genders and vice versa. Reference to persons shall include corporations. Any reference in this Circular to any statute or enactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any word defined under the Singapore Act or any statutory modification thereof and used in this Circular shall have the same meaning ascribed to it under the Singapore Act or such statutory modification, as the case may be. Any reference to a time of day in this Circular shall be a reference to Singapore time unless otherwise stated. 3

6 LETTER TO SHAREHOLDERS TIANJIN ZHONGXIN PHARMACEUTICAL GROUP CORPORATION LIMITED (Incorporated in the People s Republic of China) (Company Registration No.: ) Directors: Registered Office: Hao Fei-fei (Chairman) 17 Baiti Road, Nankai District Zhang Jian-jin (Non-Executive Director) Tianjin, PRC Shao Biao (Non-Executive Director) Wang Zhi-qiang (Executive Director and Executive Vice General Manager) Zhang Ping (Executive Director and Vice General Manager) Han Lu-lan (Executive Director) Chen Timothy Teck-Leng (Independent Director) Wong Gang (Independent Director) Gao Xuemin (Independent Director) Date: 7 December 2009 To: The Shareholders of Tianjin Zhongxin Pharmaceutical Group Corporation Limited Dear Sir/Madam (1) PROPOSED RE-ELECTION OF DIRECTORS; (2) THE LOAN FACILITIES GRANTED TO THE COMPANY AGGREGATING TO A LIMIT OF RMB280 MILLION; AND (3) PROPOSED RECOMMENCEMENT OF OPERATION OF THE COMPANY S SUBSIDIARY, NAMELY, XINXIN PHARMACEUTICAL MANUFACTURING CO., LTD. ( ) 1. INTRODUCTION The purpose of this Circular is to provide you with information regarding resolutions relating to (i) the re-election of directors of the Company; (ii) the loan facilities granted to the Company aggregating to a limit of RMB280 million; and (iii) the proposed recommencement of operation of the Company s subsidiary, namely, Xinxin Pharmaceutical, and to seek Shareholders approval at the EGM for the proposed ordinary resolutions set out in the notice of the EGM attached to this Circular. The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular. 2. RE-ELECTION OF DIRECTORS Since the term of office for each of Mr Zhang Jian-jin, Mr Shao Biao, Mr Hao Fei-fei and Ms Han Lu-lan to act as Directors of the Company is three years, which will expire in January 2010, and in view of their experiences and eligibility to act as Directors of the Company, the Board hereby proposes to the Shareholders that Mr Zhang Jian-jin, Mr Shao Biao, Mr Hao Fei-fei and Ms Han Lu-lan be re-elected as Directors of the Company at the EGM pursuant to the recommendations given by the Nomination Committee. 4

7 3. THE LOAN FACILITIES GRANTED TO THE COMPANY AGGREGATING TO A LIMIT OF RMB280 MILLION The Company has received bank facilities from the following banks: (1) Industrial Bank Co., Ltd, Tianjin Branch, for a line of credit aggregating to a limit of 70 million, with a maturity term of one year with effect from December 2009; (2) Shanghai Bank Co., Ltd., Tianjin Branch, for a line of credit aggregating to a limit of 10 million, with a maturity term of one year with effect from December 2009; (3) China Zheshang Bank Co., Ltd., for a line of credit aggregating to a limit of 50 million, with a maturity term of one year with effect from December 2009; (4) China Everbright Bank, Tianjin Branch, for a line of credit aggregating to a limit of 50 million, with a maturity term of one year with effect from December 2009; and (5) China Development Bank, Tianjin Branch, for a line of credit aggregating to a limit of 100 million, with a maturity term of three year with effect from December The above bank facilities will be utilised for the Group s working capital. 4. PROPOSED RECOMMENCEMENT OF OPERATION OF XINXIN PHARMACEUTICAL Xinxin Pharmaceutical, a wholly owned subsidiary of the Company, is principally engaged in the manufacture and sale of chemical drugs and preparation. Due to the consecutive losses incurred in the recent financial years by Xinxin Pharmaceutical and its incapability of complying with relevant environment protection requirements under the PRC laws and regulations, the Company has on 15 May 2008 passed a Shareholders resolution to dispose the assets of Xinxin Pharmaceutical. As at the date of this Circular, the disposal of assets in Xinxin Pharmaceutical is still in progress. During the course of disposing the assets of Xinxin Pharmaceutical, the Company found that the chemical preparation workshop (the Workshop ), which commenced operation in July 2004, still has commercial value. As at 30 June 2009, the Workshop s fixed assets have a net value of RMB18,276,600, and its technical know-how is valued at RMB3, After having considered the reasons set out below, the Company is of the opinion that it is in the interests of the Company to recommence operation of the Workshop: (i) (ii) (iii) (iv) the Workshop was recently built and most of its equipments were imported from overseas. The Company need not inject any additional investment to recommence its operation; the Workshop s products have already captured certain market share and gained a sound market reputation; once it recommences its operation, the Workshop, can fully comply with the relevant environmental protection requirements under the PRC laws and regulations; and as most of the employees of Xinxin Pharmaceutical have been resettled and the loss-making operations have ceased, it is possible that recommencement of operation of the Workshop can achieve potential growth and profits. 5

8 5. DIRECTORS RECOMMENDATION Having considered the experiences and backgrounds of Mr Zhang Jian-jin, Mr Shao Biao, Mr Hao Fei-fei and Ms Han Lu-lan, the Nomination Committee and the Directors recommend that Shareholders vote in favour of the resolutions to be proposed at the EGM for the re-election of directors Having considered the loan facilities granted by the various banks to the Company and since the loan facilities are provided in the Company s ordinary course of business, the Directors recommend that Shareholders vote in favour of the resolution to be proposed at the EGM for the loan facilities granted to the Company aggregating to a limit of RMB280 million Having considered the reasons listed under Section 4 of this Circular, the Directors recommend that Shareholders vote in favour of the resolution to be proposed at the EGM for the proposed recommencement of operation of Xinxin Pharmaceutical. 6. NOTICE OF EGM The EGM, notice of which is set out on page 8 of this Circular (the Notice of EGM ), will be held at Conference Room 703, Zhongxin Mansion, 17 Baiti Road, Nankai District, Tianjin PRC, on 23 December 2009 at 9 a.m. for the purpose of considering and, if thought fit, passing, with or without any amendment, the ordinary resolutions set out in the Notice of EGM. 7. ACTION TO BE TAKEN BY SHAREHOLDERS Shareholders who wish to vote but who are unable to attend the EGM and wish to appoint a proxy to attend and vote at the EGM on their behalf must complete, sign and return the Proxy Form attached to this Circular in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the office of the Company s S Share Registrar and Singapore Shares Transfer Office, Boardroom Corporate & Advisory Services Pte. Ltd., at 3 Church Street #08-01 Samsung Hub Singapore (in the case of S Shares) and at the office of the Company at level 7, Zhong Xin Mansion, 17 Baiti Road, Nankai District, Tianjin, PRC (in the case of a holder of Shares other than S Shares), no later than 12:00 p.m. on 21 December The completion and return of a Proxy Form by a Shareholder does not preclude him from attending and voting in person at the EGM should he subsequently decide to do so. A Depositor shall not be regarded as a member of the Company entitled to attend the EGM to speak and vote thereat unless his name appears on the Depository Register at least 48 hours before the EGM. 8. DIRECTORS RESPONSIBILITY STATEMENT The Directors collectively and individually accept responsibility for the accuracy of the information given and confirm that, having made all reasonable enquiries, to the best of their knowledge and belief, the information contained in this Circular constitutes true and full disclosure of the material facts and that there are no material facts the omission of which would make any statement in this Circular misleading. 6

9 9. DOCUMENTS FOR INSPECTION The following documents may be inspected at the registered office of the Company at 17 Baiti Road, Nankai District, Tianjin, PRC, during normal business hours from the date of this Circular up to the date of the EGM: (a) the Memorandum and Articles of Association of the Company; and (b) the annual report of the Company for the financial year ended 31 December Yours faithfully For and on behalf of the Directors Hao Fei-fei Tianjin Zhongxin Pharmaceutical Group Corporation Limited 7

10 TIANJIN ZHONGXIN PHARMACEUTICAL GROUP CORPORATION LIMITED (Incorporated in the People s Republic of China) NOTICE OF EXTRAORDINARY GENERAL MEETING NOTICE IS HEREBY GIVEN that an Extraordinary General Meeting of the Company will be held at Conference Room 703, Zhongxin Mansion, 17 Baiti Road, Nankai District, Tianjin PRC, on 23 December 2009 at 9 a.m.. To consider and, if thought fit, approve the following resolutions, with or without modifications Ordinary Resolutions: That: 1. to consider and approve the re-election of Mr Zhang Jian-jin as director of the Company; (Resolution 1) 2. to consider and approve the re-election of Mr Shao Biao as director of the Company; (Resolution 2) 3. to consider and approve the re-election of Mr Hao Fei-fei as director of the Company; (Resolution 3) 4. to consider and approve the re-election of Ms Han Lu-lan as director of the Company; (Resolution 4) 5. to consider and approve the various loan facilities granted to the Company aggregating to a limit of RMB280 million; (Resolution 5) 6. to consider and approve the recommencement of operation of the Company s subsidiary, namely, Xinxin Pharmaceutical Manufacturing Co., Ltd.. (Resolution 6) By order of the Board of Directors Jiao Yan Secretary to the Board of Directors 7 December

11 TIANJIN ZHONGXIN PHARMACEUTICAL GROUP CORPORATION LIMITED (Incorporated in the People s Republic of China) (Company Registration No.: ) EXTRAORDINARY GENERAL MEETING PROXY FORM (You are advised to read the notes below before completing this form) I/We, of IMPORTANT 1. For investors who have used their CPF monies to buy shares in the capital of Tianjin Zhongxin Pharmaceutical Group Corporation Limited, the Circular is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to vote should contact their CPF Approved Nominees. being a member/members of Tianjin Zhongxin Pharmaceutical Group Corporation Limited (the Company ), hereby appoint: Name Address NRIC/Passport No. and/or (delete as appropriate) Name Address NRIC/Passport No. Proportion of Shareholding (%) Proportion of Shareholding (%) as my/our proxy to vote for me/us and on my/our behalf and, if necessary to demand a poll, at an Extraordinary General Meeting of the Company to be held at the Conference Room 703, Zhong Xin Mansion, 17 Baiti Road, Nankai District, Tianjin, PRC on 23 December 2009, 9:00 a.m. and at any adjournment thereof. I/We have indicated with an X in the appropriate box below how I/we wish my/our proxy to vote. If no specific direction as to voting is given, my/our proxy may vote or abstain at his discretion as he will on any other matters arising at the Extraordinary General Meeting. Ordinary Resolution For Against Resolution 1 To consider and approve the re-election of Mr Zhang Jian-jin as director of the Company; Resolution 2 To consider and approve the re-election of Mr Shao Biao as director of the Company; Resolution 3 To consider and approve the re-election of Mr Hao Fei-fei as director of the Company; Resolution 4 To consider and approve the re-election of Ms Han Lu-lan as director of the Company; Resolution 5 To consider and approve the various loan facilities granted to the Company aggregating to a limit of RMB280 million; and Resolution 6 To consider and approve the recommencement of operation of the Company s subsidiary, namely, Xinxin Pharmaceutical Manufacturing Co., Ltd.. Dated this day of Signature(s) of Members/Corporation s Common Seal IMPORTANT: Please read notes on the next page. (a) (b) Total Number of Shares Held in: CDP Register Register of Members

12 NOTES (a) (b) (c) (d) (e) (f) (g) (h) Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members of the Company, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, this instrument of proxy will be deemed to relate to all the Shares held by you. A member entitled to attend and vote at the Extraordinary General Meeting is entitled to appoint no more than two proxies to attend and vote on his behalf and such proxy need not be a member of the Company. Where a member appoints two proxies, the appointment shall be deemed to be alternative unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. A member of the Company which is a corporation is entitled to appoint its authorised representative or proxy by resolution of its directors or other governing body such person as it thinks fit to vote on its behalf. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 3 Church Street #08-01 Samsung Hub Singapore not later than 12:00 p.m. on 21 December The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In the case of members whose Shares are deposited with The Central Depository (Pte) Limited ( CDP ), the Company shall be entitled to reject any instrument appointing a proxy or proxies lodged if such members are not shown to have Shares entered against their names in the Depository Register as at forty-eight (48) hours before the time appointed for holding the Extraordinary General Meeting as certified by the Central Depository (Pte) Limited to the Company. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or a duly authorised officer. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.