Update on Lease

Taihua plc

("Taihua" or the "Company")

Update on Lease

Taihua announces today that further to the announcement of 19 October 2012; the Company has entered into a supplemental agreement in respect of the lease over the second forsythia plantation with Luonan County Qinyuan Forsythia Farmers Co-operation on 17 December 2012 and has been provided with a new timetable for handover of the plantation to Taihua:

As a consequence of the supplemental agreement, Taihua has agreed:

(i) to take a further lease over an additional approximately 140 hectares of Forsythia plantation. The consequence of which is that the cultivated forsythia plantation has been increased from approximately 2,600 Mu to approximately 3,100 Mu and the wild forsythia plantation has been increased from approximately 10,500 Mu to approximately 12,100 Mu; 

(ii) to pay an additional RMB6.8 million in consideration (the total consideration therefore being RMB33 million for 20 years rent from 1 January 2013 to 31 December 2032); and

(iii) pay the above consideration before 31 December 2012 on the understanding that the plantation is handed over to Taihua before 31 December 2012.

Commenting on the updated lease, Chairman, Nicholas Lyth said:

"I am pleased that we have secured the handover of the second plantation and the additional land. We believe that this gives us a dominant position in the supply of forsythia in China.

The Company will continue to focus attention and resources in the area of Traditional Chinese Medicine raw materials as it believes that the long-term prospects in this sector are good."

For more information please contact:

Nicholas Lyth, Taihua plc +44 (0) 776 990 6686

Katy Mitchell, WH Ireland Limited +44 161 832 2174