CHINA STATE CONSTRUCTION DEVELOPMENT HOLDINGS LIMITED — Capital/Financing Update 2006

May 19, 2006

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

UNIVERSAL HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 419)

CONVERSION OF THE CONVERTIBLE NOTE AND

MAJOR TRANSACTION — ENTERING INTO AN EXCLUSIVE ADVERTISING AGENCY AGREEMENT AND UPDATE ON THE PROPOSED DISTRIBUTION

CONVERSION OF THE CONVERTIBLE NOTE

The Company would like to announce that on 18 May 2006, the Convertible Note was converted into approximately 2,122.1 million Shares at a conversion price of HK$0.049 per Share. As a result, the number of issued Shares increases to 12,038,610,640 Shares from 9,916,474,028 Shares as at 1 May 2006.

EXCLUSIVE ADVERTISING AGENCY AGREEMENT

The Board is pleased to announce that on 12 May 2006, Qiansi entered into the Exclusive Advertising Agency Agreement with Hainan TV pursuant to which Qiansi will act as the exclusive advertising agent of Hainan TV up to 31 December 2011 and the advertising resources including all the commercial advertising air-time of the Travel Channel and available specific programme sponsorships will be distributed by Qiansi.

The Exclusive Advertising Agency Transaction constitutes a major transaction for the Company under Chapter 14 of the Listing Rules, which is subject to the reporting, announcement and Shareholders’ approval requirements of the Listing Rules. Pursuant to Rule 14.44 of the Listing Rules, in lieu of holding a general meeting, the Company has obtained written approval from Mr Ko and his associates, who own an aggregate of approximately 51.4% of the issued Shares, to approve the Exclusive Advertising Agency Transaction. A circular in this regard will be dispatched to the Shareholders for information purposes as soon as practicable.

PROPOSED DISTRIBUTION

After the conversion of the Convertible Note, the issued share capital of the Company has increased to 12,038,610,640 Shares. The distribution ratio under the Proposed Distribution has changed to approximately 94 DVN Ordinary Shares for every 10,000 Shares held.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended at 9:30 a.m. on 17 May 2006 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 19 May 2006.

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CONVERSION OF THE CONVERTIBLE NOTE

Reference is made to the announcement of the Company dated 31 May 2005 in respect of, among other things, completion of the UHL SP Agreement (as defined in such announcement).

The Company would like to announce that on 18 May 2006, the Convertible Note was converted into approximately 2,122.1 million Shares at a conversion price of HK$0.049 per Share. As a result, the number of issued Shares increases to 12,038,610,640 Shares from 9,916,474,028 Shares as at 1 May 2006. Mr Ko has obtained a whitewash waiver from the mandatory general offer obligation in respect of the conversion of the Convertible Note. As at the date of this announcement, approximately 3,150.8 million Shares are held by the public, representing approximately 26.2% of the issued Shares as enlarged by the conversion of the Convertible Note.

EXCLUSIVE ADVERTISING AGENCY AGREEMENT

The Agreement

On 12 May 2006, Qiansi and Hainan TV entered into the Exclusive Advertising Agency Agreement pursuant to which Qiansi is officially engaged as the exclusive advertising agent of Hainan TV and the advertising resources including all the air-time for commercial advertising in the Travel Channel and available specific programme sponsorships should be distributed by Qiansi for a period of 6 years up to 31 December 2011. Qiansi is a wholly owned subsidiary of the Company. Hainan TV is 49% owned by Asian Union Film and Media （北京保利華億傳媒文化有限公司）, in which the Company has an effective interest of 50%. As at the date of this announcement, Hainan TV is 50% held by Hainan Broadcast Television Station （海南廣播電視臺）, 49% held by Asian Union Film and Media （北京保 利華億傳媒文化有限公司） and 1% held by Hainan Broadcast Television Advertising Company Limited （海南廣播電視廣告有限公司）. Asian Union Film and Media （北京保利華億傳媒文化有 限公司） is owned as to 50% by the Group and 50% by Poly Culture & Arts Co., Ltd. （保利文化藝術 有限公司）. Hainan Broadcast Television Station, Hainan Broadcast Television Advertising Company Limited and Poly Culture & Arts Co., Ltd. and their respective ultimate beneficial owners are independent of the directors, chief executive and substantial shareholders of the Company, its subsidiaries or any of their respective associates. Accordingly, Hainan TV is not a connected person of the Company for the purposes of the Listing Rules.

Under the Exclusive Advertising Agency Agreement, all the revenue derived from the sales and distribution of the advertising resources including commercial advertising air-time of the Travel Channel and available specific programme sponsorships shall belong to Qiansi, who in return will pay pre-agreed fixed fees to Hainan TV. The annual fixed consideration payable during each of the 6-year term of the Exclusive Advertising Agency Agreement ranges from RMB180 million (equivalent to approximately HK$173.2 million) to RMB207 million (equivalent to approximately HK$199.2 million) every year. The consideration was agreed after arm’s length negotiations between the parties to the Exclusive Advertising Agency Agreement. In agreeing with the consideration, the Group has taken into account a number of factors including, among other things, the market position and audience rating of the Travel Channel, the management and development strategy of Hainan TV and the Travel Channel and the television advertising market trend in the PRC. The Directors consider that the terms of the Exclusive Advertising Agency Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

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Undertaking by Hainan TV

Hainan TV has undertaken to Qiansi that it will maintain the stability of its key management and spend annual minimum amounts ranging from RMB120 million (equivalent to approximately HK$115.5 million) to RMB138 million (equivalent to approximately HK$132.8 million) from 2006 to 2011 for the productions and purchases of programs and the expansion of the Travel Channel’s coverage in different areas in the PRC. The Company understands from Hainan TV that it intends to utilize the funds payable to it under the Exclusive Advertising Agency Agreement to finance the above proposed investments.

Information of Hainan TV and Travel Channel

Hainan TV is a jointly controlled entity of the Company. No investors in Hainan TV are connected persons of the Company for the purposes the Listing Rules. Hainan TV has obtained from the Travel Channel the sole rights to manage and run its programming and advertising of the Travel Channel for 30 years from August 2003. After Hainan TV has obtained the sole operation right, the Travel Channel was relaunched in July 2004. In January 2006, the Travel Channel underwent another major revamp with a view to further enhancing its attractiveness to the audience.

Information of Qiansi and reasons for the entering of the Exclusive Advertising Agency Agreement

The advertising market in the PRC grew from approximately RMB118 million (equivalent to approximately HK$113.6 million) in 1981 to approximately RMB90 billion (equivalent to approximately HK$86.6 billion) in 2002, representing a growth of over 760 times. It is projected that the market will further grow to about RMB289 billion (equivalent to approximately HK$278 billion) by 2010. According to the statistics issued by the State Administration of Radio, Film and Television of the PRC, the total television advertising income in the PRC increased to approximately RMB39.4 billion (equivalent to approximately HK$37.9 billion) in 2004 from approximately RMB32.6 billion (equivalent to approximately HK$31.4 billion) in 2003, representing an increase of approximately 21%. The Company considers that the advertising expenditure in the PRC as a percentage to the overall gross domestic products of the PRC is still relatively low as compared to other developed countries. The Olympic Games to be held in Beijing in 2008 will constitute a positive impact to the overall advertising industry, especially the television advertising expenditure in the PRC. The Travel Channel is a young and innovative channel offering a variety of television programs, including popular dramas, news, and other informative and documentary programs with themes of leisure and travel. The target group of audience of the Travel Channel is the relatively high income group in the PRC with ages ranging from 25 to 50 and is expected to have a higher spending power on leisure goods and services. With the target audience of the Travel Channel, it focuses to attract advertising clients with relatively high advertising spending each year, such as airlines, hotels, luxury cars and other branded products.

Qiansi is a wholly owned subsidiary of the Company. Qiansi is principally engaged in advertising production. The Group is principally engaged in media related businesses (including distribution of television drama and films, advertising agency and production), the retail and distribution of home audio and video equipment, and the provision of IP telephony and related services. The Directors believe that the establishment of the strategic co-operation between Qiansi and Hainan TV by the entering into of the Exclusive Advertising Agency Agreement will further strengthen Qiansi’s competitive position as a television commercial production company in the PRC as it has the niche ability to arrange advertising air-time for its clients at a young and growing television channel, the Travel Channel. This will in turn enhance the ability of Qiansi to capitalize the growing television advertising market. It is the business plan of Qiansi to sell the advertising resources including the commercial advertising air-time of the

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Travel Channel and available specific programme sponsorships to its customers and help its customers produce the television commercials to be broadcast. We understand from the Company that Qiansi intends to use such operating cash inflow to finance the payment of the consideration under the Exclusive Advertising Agency Agreement.

Listing Rules Requirements

The Stock Exchange has indicated that the Exclusive Advertising Agency Transaction is regarded as an operating lease under Rule 14.04(1)(d) of the Listing Rules and thus a transaction under Chapter 14 of the Listing Rules.

The Exclusive Advertising Agency Transaction constitutes a major transaction for the Company under Chapter 14 of the Listing Rules, which is subject to the reporting, announcement and Shareholders’ approval requirements of the Listing Rules. No Shareholders are required to abstain from voting in this regard. Pursuant to Rule 14.44 of the Listing Rules, in lieu of holding a general meeting, the Company has obtained written approval from Mr Ko who owns approximately 5,187.3 million Shares, representing approximately 43.1% of the issued Shares, from Kwan Wing Holdings Limited which owns approximately 360.4 million Shares, representing approximately 3.0% of the issued Shares, and from Techral Holdings Limited which owns approximately 640 million Shares, representing approximately 5.3% of the issued Shares to approve the Exclusive Advertising Agency Agreement. Mr Ko has the 100% direct interest in Kwan Wing Holdings Limited and a 96% beneficial interest in Techral Holdings Limited. Mr Ko and his associates hold an aggregate interest of 51.4% in the Company. A circular in this regard will be dispatched to the Shareholders for information purposes as soon as practicable.

PROPOSED DISTRIBUTION

Reference is made to the announcement of the Company dated 11 May 2006 (the “Announcement”). Capitalised terms used in this section have the same meanings as defined in the Announcement.

Based on the Shares in issue as at the date of the Announcement, about 114 DVN Ordinary Shares would be distributed to the Shareholders for every 10,000 Shares held as set out in the Announcement. After the conversion of the Convertible Note, the issued share capital of the Company has increased from 9,916,474,028 Shares (as at the date of the Announcement) to 12,038,610,640 Shares. The distribution ratio under the Proposed Distribution has changed accordingly. On the basis of 12,038,610,640 Shares in issue as at the date of this announcement and assuming that (i) no DVN Preference Shares held by the Group will be exchanged into DVN Ordinary Shares and (ii) there is no change to the issued ordinary share capital of the Company, approximately 94 DVN Ordinary Shares will be distributed to the Shareholders for every 10,000 Shares held under the Proposed Distribution.

GENERAL

At the request of the Company, trading in the Shares on the Stock Exchange was suspended at 9:30 a.m. on 17 May 2006 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:30 a.m. on 19 May 2006.

As at the date hereof, the Board comprises Mr Dong Ping as Chairman, Mr Ko Chun Shun Johnson and Mr Shen Ka Yip Timothy as executive directors, Mr Tsoi Tong Hoo Tony, Mr Cheong Chow Yin as nonexecutive directors and Mr Yuen Kin, Mr Wilton Timothy Carr Ingram and Dr Wong Yau Kar David as independent non-executive directors.

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DEFINITIONS

“Board”

the board of Directors

• “Company” Universal Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the ordinary shares of which are listed on the main board of the Stock Exchange

• “Convertible Note” convertible note of approximately HK$104 million issued by the Company and held by Mr Ko

• “Director(s)” the director(s) of the Company

• “Exclusive Advertising the exclusive advertising agency agreement entered into between Qiansi and Agency Agreement” Hainan TV on 12 May 2006

• “Exclusive Advertising the transaction contemplated under the Exclusive Advertising Agency Agency Transaction” Agreement

• “Group” the Company and its subsidiaries

• “Hainan TV” Hai Nan Haishi Tourist Satellite TV Media Co., Ltd （海南海視旅遊衛視傳 媒有限責任公司）

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Mr Ko” Ko Chun Shun, Johnson, a Director

• “PRC” the People’s Republic of China, excluding Hong Kong, Macau and Taiwan for the purposes of this announcement

• “Qiansi” Beijing Hua Yi Qian Si Advertising Company Limited （北京華億千思廣告 有限公司）

• “Shares” the shares of the Company

• “Shareholders” the shareholders of the Company

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“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Travel Channel”

Hainan Satellite Television Travel Channel

By Order of the Board UNIVERSAL HOLDINGS LIMITED Dong Ping

Chairman

Hong Kong, 18 May 2006

For the purpose of this announcement, unless otherwise indicated, the exchange rate of HK$1 = RMB1.039 has been used, where applicable, for purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be exchanged at such rate or at any other rate.

Please also refer to the published version of this announcement in the China Daily.

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