China's Cross-Border Funding Reforms

ADAMAS FINANCE ASIA LIMITED

("ADAM" or the "Company)

China's cross-border funding reforms

The Directors of ADAM are pleased to note the newly-introduced reforms designed to ease controls on cross-border lending to Chinese businesses.

The new cross-border lending reforms have been introduced during June by China's State Administration of Foreign Exchange ("SAFE") to address concerns that tight credit and slowing investment may stall the country's 7.5% GDP growth objective for 2015. The scale of demand is clear from May figures showing a 12% increase in bank lending to RMB 870.8 billion (approx US$140 billion) following a decision by the central People's Bank of China to cut the reserve requirement ratio on lending banks.

According to the law firm Clifford Chance, the new easing of cross-border lending controls can be expected to reduce transaction times and the associated costs for offshore investors who also stand to benefit from increased flexibility and strengthened enforcement over security.

ADAM Chairman John Croft said: "We have little doubt the streamlining of rules resulting from the new changes will result in wider investment opportunities within China. Key among the changes is the removal both of quotas and of the need for SAFE approval on security to underpin cross-border lending."

Mr. Croft added: "Adamas Asset Management, the Company's investment manager, has demonstrated strong expertise and delivery in achieving high-yield returns from providing growth capital for operationally-sound Chinese businesses. These new moves, and the evidence of huge underlying demand for capital, demonstrate that while adjustments in the Chinese economy will continue to pose challenges for the government, demand from a large number of individual businesses is set to remain strong."

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