1. 2013 Annual General Meeting July 8, 2013

2. 2 Audit Committee Report The Audit Committee of the Board of Directors (the “Committee”) is comprised of the one director named below. The Committee has adopted a written charter which has been approved by the Board of Directors. The Committee has reviewed and discussed the Company’s audited financial statements with management, which has primary responsibility for the financial statements. RSM Nelson Wheeler and Seiwa Audit Corporation, the Company’s outside auditors for 2012, are responsible for expressing an opinion on the conformity of the Company’s audited financial statements with international and Japanese generally accepted accounting principles respectively. Based on the considerations referred to above, the Committee recommends to the Board of Directors that the audited financial statements be included in the Company’s Securities Report for 2012 and that RSM Nelson Wheeler and Seiwa Audit Corporation be appointed independent auditors for the Company for 2013. The foregoing report is provided by the following director, who constitute the Audit Committee. Wu Ji Guang June 6, 2013

3. Matters to be Reported - Item No.1 Report on the business report and consolidated income statements for the period from January 1, 2012 to December 31, 2012 and the consolidated balance sheet as of December 31, 2012

4. 4 2012 Business Results: Consolidated Income Statements 2011 （ Million Yen) 2012 （ Million Yen ） Increase/ Decrease (Million Yen) Net sales 19,577 （ 1,693 ） 14,212 （ 1,231 ） △ 5,365 （ △ 462 ） Operating loss △ 13,492 （△ 1,168 ） △ 5,532 （△ 479 ） 7,960 （ 689 ） Ordinary loss △ 7,590 （△ 657 ） △ 6,677 （△ 578 ） 913 （ 79 ） Net loss for the year △ 6,933 （△ 600 ） △ 8,389 （△ 726 ） △ 1,456 （△ 126 ） (Unit: Thousands of US Dollars) Due to the discontinuation of the education business and the deconsolidation of Tongxin. Due to the decrease in selling, general and administrative expenses. Due to the increase in the appraisal loss of goodwilll and tangible fixed assets.

5. 5 2012 Business Results: Consolidated Balance Sheet 2011 (Million Yen) 2012 (Million Yen) Increase/ Decrease (Million Yen) Total assets 23,026 （ 1,994 ） 13,586 （ 1,176 ） △ 9,440 （ △ 818 ） Net assets 14,711 （ 1,274 ） 7,720 （ 668 ） △ 6,991 （ △ 606 ） Total liabilities 8,315 （ 720 ） 5,866 （ 508 ） △ 2,449 （ △ 212 ） Capital ratio55.8%37.8% △ 18% (Unit: Thousands of US Dollars) Due to the decrease in cash and deposits and the goodwill appraisal loss. Due to the decrease in trade accounts payable, the decrease in interest payable and the decrease in sales.

6. 6 2012 Overview The Company made efforts to reduce costs and raise funds by selling certain business, but could not fully draw a road map towards the achievement of business revitalization.

7. Matters to be Reported - Item No.2 Report on the resignation of Mr. Aloysius T. Lawn IV as a director of the Company and the appointment of Mr. Lian Yih Hann as a director, chairman of the board, CEO and CFO of the Company

8. Current Status, Issues/Challenges and Future Prospects

9. 9 Changes in Business Results (2010 ～ 2012) 17,018 19,557 14,212 -4,391 -7,590 -6,677 -10,000 -5,000 0 5,000 10,000 15,000 20,000 25,000 201020112012 (Unit: Thousands of US Dollars) Sales Ordinary Loss There has been no increase in sales over the past three years, and the Company has been facing hard times, posting ordinary loss three years in a row.

10. 10 Major Efforts (2010 ～） The Company failed to succeed in any of the new businesses, and also withdrew from, or conducted a scale-down of, each of the existing businesses. As such, the Company has not been able to achieve any results that would enable it to expand its business. Education Business Environment/Lifestyle US Business Chinese Business 2010201120122013 Withdrawal Did not reach the stage of taking shape as a business. New Business Existing Business Kijoon, GMS, U-Learning Withdrawal MNI, SMRA, etc. Withdrawal/ Scale-down FTSE, Fortune China, etc. Entry

11. 11 Last Chance for Self-Revitalization 47,532 23,026 13,586 27,628 14,711 7,720 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 201020112012 (Thousands of US Dollars) Total assets Net assets The Company has been suffering from a decline in both total assets and net assets over the past three years, and 2013 may be the last chance for the Company to achieve revitalization on its own.

12. 12 New Management Team Management change (on May 23) Old team New team Director & Chairman Director CEO CFO & COO Director & Chairman Director CEO CFO Wu Ji Guang Aloysius T. Lawn, IV Kung Yuen-Kao Wang Bin Resigned Wu Ji Guang Re- elected Lian Yih Hann Newly elected Lian Yih Hann Personal History and Strengths of New CEO (Lian Yih Hann) 1994 1996 － 2000 2000 － 2001 2004 － 2007 2012 － 2013 Graduated from University of Pennsylvania Nomura/JAFCO Investment Inphomatch Asia (Founder/CEO) BBMF Corporation (founder/CEO) Inphosoft Pte. Ltd (director) Ginsms Inc. (director) Assumed other various positions Strengths: Has substantial experience in establishing and operating the business of distributing applications for mobile terminals, and has an extensive network of personal contacts related thereto. Newly elected Resigned

13. 13 Procurement of Necessary Funds The CEO of the Company (Lian Yih Hann) provided a loan of US$1,000,000 in total to the Company, as the initial operating funds, restructuring costs, etc. CEO of the Company (Lian Yih Hann) Xinhua Holdings Limited US$500,000 First loanSecond loan Total: US$1,000,000

14. 14 Issues Found by On-Site Inspection (Examples) Shanghai Hong Kong Peking Tokyo China Japan Holding companyMajor group companies Headquarters Finance/Legal IR Shanghai Tongxin BOABC Fortune China From the perspective of an efficient use of offices, the decrease in the amount of rent to be paid and the integration of functions and facilities to streamline operations would likely result in cost reduction. There are also other areas where improvements can be made. As of Dec 31, 2012 132 Employees (Decrease by 198) Number of employees

15. 15 Issues that the Major Group Companies are Facing Xinhua Holdings Xinhua Financial Network Fortune China XFN (Shanghai) Top Sky Shanghai Tongxin BOABC (Deconsolidated) Making Losses Financial services Agriculture- related services Issues and current status Competitive power issues Market share issues Internal operations issues Many issues must be resolved to improve profitability.

16. 16 Litigation and Other Proceedings Dispute with TopSky Nominee (Arbiration) Criminal Litigation against Mr. Andrew Kim Notice from the Hong Kong tax authorities Notice from the Hong Kong tax authorities Litigation against ex-directors in the U.S. Awaiting decision Affected area determined and measures already taken In 2011, three ex-directors were prosecuted in the US for fraud, etc., but most of the charges were later dismissed and the case was concluded in April 29, 2013. The Company was not affected by the litigation. The Company received a notice of additional tax from the Hong Kong tax authorities for 2006/2007. The negotiations that followed such notice resulted in a considerable reduction of the amount of such additional tax. The Company made a public announcement that it will pay the negotiated amount as the relevant additional tax. The Company won the civil litigation involving the repayment of the loan that it provided to Mr. Kim (ex-employee), but lost the criminal litigation at the court of first instance. The case is now pending in the court of appeals. The full amount of the loan, etc. has already been accounted for as “reserves”. A third party arbitration system was used to resolve the dispute with one of the TopSky nominees ( Ms. Yang). Consequently, Tongxin (one of the group companies) was deconsolidated. This greatly affected the Company’s policies relating to the handling of its group companies.

17. 17 New Approach (Option 1) China Other countries Japan Xinhua Manga (comic) Game Animation DistributionProcessingProcurement Strong demandHigh quality For example, the Company places itself between China which has strong demand for mobile contents and Japan which creates high-quality mobile contents, and handles the whole process from procurement to processing to distribution.

18. 18 New Approach (Option 2) For example, the Company handles the procurement (assessment) of, manages the licenses related to, and makes proposals for the actual use of (maximization of the value of), mobile contents. Game Manga (comic) Manga Animation Game Publisher/Author/Agent Major amusement company Game creation company Xinhua Ability to Assess Flow of contents Chinese company Partner Joint proposal Contents creation company Sublicense

19. 19 Improvements and reform Future Roadmap Solving issues New approach Second halfFirst halfSecond halfFirst halfSecond half 201320142015 Organizing issues Improvements and reform High-Priority Issues Other issues Classify issues based on priority and aim for the prompt resolution of material (high- priority) issues Get the business on track Business startup period Devise Business strategy Followed by the second wave, the third wave… Each of the high-priority issues will be treated as a matter of overriding concern. In the meantime, a new approach will be adopted from the second half of 2013 in order to achieve future growth.

20. Matters to be Resolved

21. Agenda 1 Election of two directors (Ms. Chang Tzu-Ing and Mr. Naoya Harano)

22. 22 Outcome of the Vote Agenda 1 Election of two directors (Ms. Chang Tsu-Ing and Mr. Naoya Hara) Approved