ASX release: Independent Expert’s Report

Asian American Medical Group Limited

Independent Expert's Report and Financial Services Guide

7 November 2017

ABN 59 003 265 987

AFSL 247140

Level 17, 383 Kent Street

Sydney NSW 2000 PO Locked Bag Q800 QVB Post Office Sydney NSW 1230

E info@gtnsw.com.au

W www.grantthornton.com.au

Dear Independent Directors

Asian American Medical Group Limited ("AAMG" or the "Company") is a Singapore based healthcare company established in 1994 and listed on the ASX since 2009. As at 6 November 2017 AAMG had a market capitalisation of $29.8 million. AAMG's services are organised in three divisions:

• Liver segment - operates medical centres focused on the treatment of liver, pancreas and bile duct diseases in Singapore and Malaysia.

• Radiation and Oncology segment - provides radiation therapy treatment as well as management and advisory services to radiation oncology units in Asia.

• Healthcare Management and Consultancy segment - provides consultancy and management services to drive expansion of new medical facilities and other health care related projects.

On 20 October 2017 AAMG announced that its wholly owned subsidiary, Million Health Ventures Pte Limited ("MHV"), had entered into an agreement (the "Subscription Agreement") to subscribe for 19,408,163 new ordinary shares at an issue price per share of RM1.00 ("Subscription Shares") in Hippocrates Development Sdn Bhd ("HD") ("Proposed Transaction") resulting in an effective interest in the enlarged share capital of HD of 95.1%.

HD is a newly created Malaysian company1, established to acquire a 5-acre parcel of land ("Land") from His Majesty, the Sultan of Johor, Sultan Ibrahim Ismail Ibni Almarhum Sultan Iskandar Al-Haj (the "Land Vendor") to construct an advanced cancer treatment clinic in Iskandar Malaysia, State of Johor (the "Project").

The subscription price will be satisfied by a cash payment of RM5,606,963 and the balance of RM13,801,200 through issuance to the Land Vendor of approximately 40 million new AAMG shares at AUD

0.105 (collectively known as "Subscription Price"). The issuance of AAMG shares to the Land Vendor will be in part satisfaction of amounts due to the Land Vendor by HD in respect of the purchase of the Land2.

1 Incorporated on 7 July 2017

2 In addition to the AAMG shares, HD will pay RM 1,065,340 in cash to the Land Vendor

The remaining 4.9% interest in HD will be held by Dato' Dr Caesarian Tan Kai Chah ("Dr Tan") who presently is the sole shareholder of HD and who will also subscribe for an additional 500,000 new ordinary shares at an issue price of RM0.001 for each share.

The Land is a vacant parcel of land to be subdivided from a larger parcel held by the Land Vendor and has been bought by HD on condition that it is designated as land for commercial use and in particular for a hospital/ medical centre and related facilities. It is a condition precent in the purchase agreement that HD entered into with the Land Vendor in relation to the acquisition of the Land (the "SPA") that the Land Vendor subdivide the Land and issue HD with a separate land title with the afore mentioned zoning.

Whilst not a party to the SPA or to the Subscription Agreement, AAMG has entered into an agreement with MHV, HD and Dr Tan ("Deed of Clarification and Acknowledgment") acknowledging its responsibilities as set out in those agreements. Dr Tan is AAMG's Executive Chairman, owns all the shares in HD and approximately 38% of AAMG shares.

The Proposed Transaction is subject to MHV and AAMG shareholders' approval as well as other conditions precedent.

The Proposed Transaction constitutes an acquisition of a substantial asset from a substantial shareholder and related party. Accordingly, the Independent Directors have commissioned Grant Thornton Corporate Finance Pty Limited ("Grant Thornton Corporate Finance") to prepare an independent expert's report to assess whether the Proposed Transaction is fair and reasonable to the Non-Associated Shareholders (i.e. shareholders excluding Dr Tan and related parties) for the purposes of Chapter 10 of the ASX Listing Rules.

For the purpose of this report, KGV International Property Consultants Sdn Bhd ("KGV") was engaged to provide an independent valuation report in relation to the Land held by HD ("the KGV Report"). The KGV Report is included as Appendix B to this report.

In forming our opinion, Grant Thornton Corporate Finance has considered whether the Proposed Transaction is fair and reasonable to the Non-Associated Shareholders and other quantitative and qualitative considerations.

Fairness assessment

In accordance with the requirements of the Australian Securities and Investment Commission ("ASIC") Regulatory Guide 111 Contents of expert reports ("RG 111"), in forming our opinion in relation to the fairness of the Proposed Transaction to the Non-Associated Shareholders, Grant Thornton Corporate Finance has compared the Subscription Price to the fair market value of a 95.1% interest in HD after the completion of the Proposed Transaction.

The following table summarises our fairness assessment:

Source: GTCF Calculations

The Subscription Price of RM19,408,163 is less than our assessed valuation of 95.1% interest in HD. Accordingly, we conclude that the Proposed Transaction is FAIR to AAMG's Non-Associated Shareholders.

We have assessed the value of a 95.1% interest in HD by assessing the market value of its net assets which mainly comprises of the Land. In assessing the market value of the Land we have relied on the independent valuation undertaken by KGV.

Reasonableness assessment

We note that the Proposed Transaction is fair to the Non-Associated Shareholders from a quantitative perspective. Notwithstanding this, for the purpose of assessing whether or not the Proposed Transaction is reasonable to the Non-Associated Shareholders, we have considered the following likely advantages, disadvantages and other factors associated with the Proposed Transaction. We note that in accordance with RG111, the Proposed Transaction is reasonable if it is fair.

Advantages

Consistent with AAMG's strategy

The Proposed Transaction is in line with AAMG's strategy to expand and diversify its existing operations into related healthcare areas including the development of healthcare real estate. The Board believes this investment will enhance its existing radiology and oncology segment and will create significant value to AAMG's shareholders in the long term. The Project is expected to meet the underserved demand for cancer treatment in Johor as well as from other parts of Malaysia and internationally. Malaysia has experienced growth in the number of healthcare travellers coming to Malaysia and the Project is expected to tap into this growth.

Provides an additional source of income for AAMG

AAMG will provide various services to HD to assist in delivering the Project. AAMG will be remunerated RM1,000,000 immediately with a another amount of RM2,000,000 to be received following the achievement of certain milestones. In addition, AAMG will receive a management service fee of 20% of the costs and expenses incurred relating to the Project. A present limitation on the receipt of this income by AAMG is that HD will be required to organise external funding for the Project, or else amounts owing to AAMG will remain unpaid or paid from funds that AAMG in the first instance has contributed via its Subscription Price.

It is also noted that upon completion of the Project, it is expected that profits will be generated either through operating the facility directly or via a third party operator. As a 95.1% shareholder AAMG could potentially benefit from this.