Richly Field China Development Limited - Proxy Solicitation & Information Statement 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or otherwise transferred all your shares in United Pacific Industries Limited, you should at once pass this circular to the purchaser or the transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

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(Stock Code: 00176)

website: http://www.irasia.com/listco/hk/upi/index.htm

VERY SUBSTANTIAL ACQUISITION OF A CONTROLLING INTEREST IN SPEAR & JACKSON, INC.

SUPPLEMENTAL CIRCULAR

Adviser to United Pacific Industries Limited on Hong Kong Listing Rules requirements

CENTURION CORPORATE FINANCE LIMITED

A letter from the Board of Directors of United Pacific Industries Limited (“Company”) is set out from pages 2 to 4 of this Supplemental Circular.

30 September 2006

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
APPENDIX I — SUPPLEMENTAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX II — PRO FORMA FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . .	46

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DEFINITIONS

In this Supplemental Circular, including the appendices, unless the context otherwise requires, terms defined in the Circular bear the same meanings, and the following expressions have the meaning set opposite them:

“Circular”

the circular dated 13 July 2006 issued by the Company to Shareholders in respect of the Acquisition;

“Latest Practicable Date”

25 September 2006, being the latest practicable date prior to the printing of this Supplemental Circular for ascertaining certain information contained herein;

“Supplemental Circular”

this supplemental circular dated 30 September 2006 issued by the Company for the purpose of providing Shareholders further information concerning the S&J Group and the Enlarged Group;

For the purpose of illustration only, throughout this Supplemental Circular currency translations have been made using the rates of exchange stated in the table below. No representation is made that any amounts in US$, £ or HK$ could have been or can be converted at that rate or at any other rate or at all.

US$1 = HK$7.79 £1 = HK$14.21

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LETTER FROM THE BOARD

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(Stock Code: 00176)

Executive Directors: Brian C Beazer, Executive Chairman David H Clarke, Executive Vice-Chairman Simon N Hsu, Executive Vice-Chairman

Registered office: Clarendon House Church Street Hamilton, HM 11 Bermuda

Non-executive Directors:

Teo Ek Tor Ng Ching Wo

Independent Non-executive Directors:

Dr. Wong Ho Ching, Chris Henry W Lim Ramon Sy Pascual

Head Office and Principal Place of Business in Hong Kong: Unit 2705-6, 27/F., Vicwood Plaza 199 Des Voeux Road Central Hong Kong

30 September 2006

To the Shareholders of the Company

Dear Shareholders,

VERY SUBSTANTIAL ACQUISITION OF A CONTROLLING INTEREST IN SPEAR & JACKSON, INC.

INTRODUCTION

Reference is made to the Circular dated 13 July 2006 issued by the Company to Shareholders in respect of the Acquisition. The Acquisition was approved by the Shareholders at the SGM held in Hong Kong on 28 July 2006 and completed later the same day in New York City, New York, USA.

The purpose of this Supplemental Circular is to provide Shareholders with further information concerning the S&J Group and the Enlarged Group and to fulfill one of the waiver conditions.

SUPPLEMENTAL CIRCULAR

As stated in the Circular, the Acquisition was on an unsolicited basis. S&J, being a US publicly-traded company with its shares registered under the Exchange Act, was restricted in providing non-public information. The limited due diligence materials from S&J had been provided on a confidential basis.

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LETTER FROM THE BOARD

The Company had endeavoured to collect and collate information from Jacuzzi and S&J in order to fulfill the disclosure requirements in respect of the Circular under the Listing Rules. However, not all such information was available at the time of despatch of the Circular.

For the purpose of the Circular, the Company had extracted certain information on S&J from publicly-available sources including S&J’s audited financial statements filed with the SEC in Forms 10-K in respect of financial years, and S&J’s unaudited financial statements filed in Forms 10-Q in respect of quarterly periods. As such, as set out on page 19 of the Circular, the Company had been unable to comply with the following provisions of the Listing Rules in relation to the disclosure requirements in the Circular:

(a) Rules 4.01(3) and 14.69(4)(a)(i) — an accountants’ report on S&J prepared using accounting policies which are materially consistent with those of the Group;
(b) Rule 14.69(4)(a)(ii) — a pro forma income statement, balance sheet and cash flow statement of the Enlarged Group (comprising the Group and S&J Group), on the same accounting basis and in compliance with Chapter 4 of the Listing Rules;
(c) Paragraph 28 and note 2 to Appendix 1B of the Listing Rules — the statement on the indebtedness of the Enlarged Group;
(d) Rule 14.66(4) and Paragraph 30 and note 2 to Appendix 1B of the Listing Rules — the statement of sufficiency of working capital available to the Enlarged Group;
(e) Paragraph 33 and note 2 to Appendix 1B of the Listing Rules - particulars of any litigation or claims of material importance pending or threatened against any member of the Enlarged Group; and
(f) Rule 14.69(7) — the discussion and analysis of the performance of S&J Group for the three preceding financial years covering all those matters set out in Paragraph 32 of Appendix 16 of the Listing Rules.
((b) to (f) above are collectively defined as the “Further Information”).

The Company had applied for, and the Stock Exchange had granted a waiver from strict compliance with the Listing Rules. As one of the waiver conditions, the Company is required to publish and despatch this Supplemental Circular on or before 30 September 2006 (the “Undertaking”) for Shareholders’ information only which includes the following information:

(i) consolidated income statements and consolidated balance sheets of S&J for each of the three years ended 30 September 2003, 2004 and 2005 and for each of the six months ended 31 March 2005 and 2006 (together defined as the “Relevant Periods”) prepared under HK GAAP, together with a reconciliation of equity and profits attributable to shareholders from

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LETTER FROM THE BOARD

U.S. GAAP figures to HK GAAP figures for the Relevant Periods. All this information should be reviewed and reported on by the Company’s auditors in accordance with Hong Kong Standard on Review Engagements 2400 “Engagement to Review Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants;

(ii) a review report prepared by the Company’s auditors in relation to paragraph (i) above;
(iii) a line-by-line reconciliation between U.S. GAAP and HK GAAP for the consolidated income statements and consolidated balance sheets of S&J for the Relevant Periods and any material adjustments should be described on an individual basis; and
(iv) the Further Information.

The following is a summary of the aforesaid conditions which have all been fulfilled:

Condition (i) See pages 38 to 43 of this Supplemental Circular Condition (ii) See pages 44 to 45 of this Supplemental Circular Condition (iii) See pages 24 to 37 of this Supplemental Circular Condition (iv) Further Information (b) See pages 46 to 54 of this Supplemental Circular Further Information (c) See pages 5 to 6 of this Supplemental Circular Further Information (d) See page 6 of this Supplemental Circular Further Information (e) See pages 6 to 7 of this Supplemental Circular Further Information (f) See pages 7 to 23 of this Supplemental Circular

The issue of this Supplemental Circular is to provide Shareholders with the information detailed above.

ADDITIONAL INFORMATION

Your attention is drawn to the information set out in the following appendices to this Supplemental Circular:

(i) supplemental financial and other information; and
(ii) pro forma financial information of the Enlarged Group.

By order of the Board

United Pacific Industries Limited

Brian C Beazer Executive Chairman

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SUPPLEMENTAL INFORMATION

APPENDIX I

1. STATEMENT ON THE INDEBTEDNESS OF THE ENLARGED GROUP PURSUANT TO APPENDIX 1B(28) OF THE LISTING RULES

1.1 Borrowings

As at the close of business on 31 May 2006, being the latest practicable date for the purpose of this statement of indebtedness of the Enlarged Group prior to the printing of the Circular, the Enlarged Group had outstanding secured bank loans of approximately HK$31,538,000, bank overdrafts of approximately HK$175,333,000 and obligations under finance leases of approximately HK$10,804,000.

The secured bank loans and bank overdrafts, in aggregate, amounting to approximately HK$206,871,000 were secured by corporate guarantees from the Enlarged Group, of which, (a) the bank loans of approximately HK$5,506,000 were additionally secured by pledged bank deposits of approximately HK$5,000,000 and (b) the bank overdrafts of approximately HK$175,333,000 were additionally secured by (i) a freehold property of S&J located at Plot 24, Atlas North Industrial Estate, Sheffield, United Kingdom with carrying value of approximately HK$74,254,000 as at 31 May 2006, (ii) the entire issued ordinary shares of Umcos Australia Pty. Limited, a subsidiary of S&J; and (iii) all assets of certain subsidiaries of S&J including Markbalance plc., Magnacut Limited, Coventry Gauge Limited, C. V. Instruments Limited, Bowers Group plc., Bowers Metrology (UK) Limited, Bowers Metrology Limited, Offertower plc., Spear & Jackson Holdings Limited, Spear & Jackson Garden Products Limited, Eclipse Magnetics Limited, Neill Tools Limited, James Neill Holdings Limited and Spear & Jackson plc., which are engaged in the manufacture and sale of a broad line of hand tools, lawn and garden tools, industrial magnets and metrology tools.

As at 31 May 2006, the carrying amount of property, plant and machinery of the Enlarged Group held under finance leases amounted to approximately HK$10,894,000.

The net cash (debt) position of the Enlarged Group as at 31 May 2006, based on unaudited accounts was HK$86,410,895.

Amounts in foreign currency have, for the purpose of this indebtedness statement of the Enlarged Group, been translated into Hong Kong dollars at the applicable rate of exchange ruling at the close of business on 31 May 2006.

1.2 Contingent liabilities

As at 31 May 2006, being the latest practicable date for the purpose of ascertaining indebtedness of the Enlarged Group prior to the printing of the Circular, the Enlarged Group had outstanding litigation as described in paragraph (3) below. The Class Action (defined in paragraph (3)(a) below) and the Derivative Action (defined in paragraph (3)(b) below) are both in the process of settlement which will require court approval in each case. In the event the settlement of either action is not effectuated for any reason whatsoever, the parties will revert to their litigation positions, and in these circumstances, the Directors are of the opinion that the estimated contingent liabilities arising from the litigation cannot be reasonably ascertained.

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SUPPLEMENTAL INFORMATION

APPENDIX I

1.3 Disclaimer

Save as aforesaid, and apart from intra-group liabilities, and normal trade payables, the Enlarged Group did not have any loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities issued and outstanding, an authorised or otherwise created but unissued term loans or other borrowings, indebtedness in nature of borrowings, liabilities under acceptances (other than trade bills) or acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, which are either guaranteed, unguaranteed, secured, or unsecured, guarantees or other material contingent liabilities outstanding at the close of business on 31 May 2006.

2. SUFFICIENCY OF WORKING CAPITAL AVAILABLE TO THE ENLARGED GROUP PURSUANT TO APPENDIX 1B(30) OF THE LISTING RULES

The Directors, after due and careful consideration, are of the opinion that based on available banking facilities and internal resources of the Enlarged Group, the Enlarged Group has sufficient working capital for its requirements currently and for the period ending twelve months from the date of the Circular.

3. PARTICULARS OF LITIGATION OF THE ENLARGED GROUP PURSUANT TO APPENDIX 1B(33) OF THE LISTING RULES

Save as otherwise disclosed herein, as at the Latest Practicable Date, so far as the Directors are aware, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance, and no litigation or arbitration of material importance was pending or threatened against the Company or any of its subsidiaries.

As disclosed in the Circular, S&J is involved in shareholders’ litigation in the United States. A brief background of the litigation and an update as at the Latest Practicable Date are set out below.

(a) On 15 April 2004, the U.S. Securities and Exchange Commission (“SEC”) filed suit in the U.S. District Court for the Southern District of Florida against S&J, its then former chief executive officer (“Former CEO”) and others, alleging violations of federal securities laws (“SEC Action”). Specifically with regards to S&J, the SEC alleged that S&J violated the SEC’s registration, anti-fraud and reporting provisions. These allegations arose from the alleged failure of the Former CEO to accurately report his ownership and disposition of S&J’s shares, and his alleged manipulation of the price of S&J’s shares.

On 15 February 2005, the court approved a negotiated settlement with the SEC, without any admission of liability by the parties. In addition, S&J was not subjected to pay any monetary sanction.

Following the SEC Action, S&J was named as one of the defendants in a variety of civil actions by certain shareholders of S&J who had suffered financial loss due to the alleged improper conduct of S&J’s Former CEO and others, largely based upon the allegations of the SEC Action. These civil actions were consolidated in a shareholders’ class action in federal court in Florida (“Class Action”).

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SUPPLEMENTAL INFORMATION

APPENDIX I

S&J has entered into a Memorandum of Understanding to settle the Class action for US$650,000 (HK$5,063,500) (“Settlement Amount”) subject to court approval of the settlement. S&J has paid the Settlement Amount into an escrow account and is awaiting court approval. In addition to the Settlement Amount, the Class plaintiffs are likely to receive distribution from the approximately US$6.5 million (HK$50.6 million) in funds raised from the other defendants, including the Former CEO, in the SEC Action.

(b) A derivative action (“Derivative Action”) was also commenced by certain shareholders in state court in Florida against certain former and current directors and officers of S&J, and naming S&J as a nominal defendant. The complaint alleges state law claims, among others, and breaches of fiduciary duty. Although any judgement in favor of the plaintiffs will enure to the benefit of S&J, the certain individual former board member defendants (excluding the former CEO) may be entitled to recover from S&J under directors’ and officers’ indemnity cover.

S&J is currently in settlement discussion in an effort to resolve the matter.

(c) The Enlarged Group, from time to time, is subject to legal proceedings and claims arising from the conduct of its business operations, including litigation related to personal injury claims, customer contract matters, employment claims and environmental matters. While it is impossible to ascertain the ultimate legal and financial liability with respect to contingent liabilities including lawsuits, the Directors believe that the aggregate amount of such liabilities, if any, in excess of amounts accrued or covered by insurance, will not have a material adverse effect on the financial position or results of operations of the Enlarged Group.

4. DISCUSSION AND ANALYSIS OF S&J GROUP PURSUANT TO APPENDIX 16(32) OF THE LISTING RULES

United Pacific Industries Limited takes sole responsibility for the presentation of the following management discussion and analysis in relation to the Spear & Jackson Group in compliance with the requirements of Appendix 16(32) of the Listing Rules. The information herein is derived from information presented in Forms 10-K and Forms 10-Q filed by S&J with the U S Securities and Exchange Commission for the relevant periods which has been converted in accordance with accounting principles generally accepted in Hong Kong and translated into HK dollars.

1. For the year ended and as at 30 September 2005

Shareholders’ Equity

The S&J Group’s consolidated shareholders’ funds decreased from HK$207 million to HK$165 million. The decrease of HK$42 million was largely due to an increase in pension and post-retirement benefit obligations from HK$294 million to HK$335 million during the year.

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SUPPLEMENTAL INFORMATION

APPENDIX I

Liquidity and Capital Resources

As at 30 September 2005, cash and bank balances amounted to HK$215 million with certain trade debt and bank borrowings amounting to HK$169 million (net cash of HK$46 million), while the S&J Group’s net asset value as at 30 September, 2005 was HK$165 million. The working capital position of the S&J Group remains healthy. As at 30 September, 2005, the liquidity ratio (ratio of current assets to current liabilities) was 173% with a gearing ratio of nil balance (ratio of net bank debt to net assets value).

The S&J Group obtained a bridging loan facility of HK$41.3 million to finance pension plan contribution and also to finance restructuring initiatives, if required. This facility had not been utilized at September 30, 2005.

The business operations of the S&J Group have been funded from net operating income supplemented, where necessary, by utilization of banking facilities. S&J Group believes that they have sufficient capital resources, liquidity and available credit under their current principal banking facilities supplemented, where necessary, by temporary increases, to sustain their current business operations and normal operating requirements for the foreseeable future.

Charge of Assets

The bank credit facilities of the S&J Group are secured by fixed and floating charges on the assets and undertakings of the businesses, while the bridging loan facility of HK$41.3 million to finance pension plan contribution is secured by a first legal charge over S&J’s Wednesbury land and property.

Contingent Liabilities

As at 30 September 2005, the S&J Group had contingent liabilities in connection with shareholders’ litigation against the Company and certain former and current officers and directors which, in the view of the Directors, cannot be reasonably ascertained. Additionally, from time to time, the S&J Group, is subject to legal proceedings and claims arising from the conduct of its business operations. The Directors believe that the aggregate amount of such liabilities, if any, in excess of amounts accrued or covered by insurance, will not have a material adverse effect on the financial position or results of operations of the S&J Group.

Recent Developments

On April 15, 2004, the US Securities and Exchange Commission (SEC) filed suit in the U.S. District Court for the Southern District of Florida against S&J and Mr. Dennis Crowley, its then current Chief Executive Officer/Chairman, among others, alleging violations of the federal securities laws. Specifically with regard to the Company, the SEC alleged that the Company violated the SEC’s registration, anti-fraud and reporting provisions.

Following Court approval of the settlements in connection with the SEC suit, on 8 April 2005, S&J acquired from Mr Crowley, for a nominal consideration, all 6,005,561 common shares of S&J

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SUPPLEMENTAL INFORMATION

APPENDIX I

held by Mr Crowley, which represents approximately 51.1% of the outstanding common shares. With the return of the S&J shares, the stockholders of the Company had their percentage stock interest increased correspondingly. Jacuzzi Brands, Inc. which is a beneficial owner of 3,543,281 shares of common stock, had its interest in S&J increased to approximately 61.8% of the outstanding common stock.

Review of Performance and Segmental Information

Overview

Sales of HK$784.4 million in 2005 show an increase of HK$9.4 million from those for the equivalent period last year. Income before tax has increased from HK$14.9 million in 2004 to HK$51.8 million in 2005 due to the increase in sales and gain on sales of land and buildings.

The increase in sales was primarily due to favorable currency exchange fluctuations in the year of HK$31.1 million offset by sales volume decreases of HK$17.9 million and increased sales rebates of HK$3.9 million.

Gross profit was 33.0% for the year ended 30 September 2005, compared to 32.08% in the previous year.

The gain of HK$25.5 million arising on the sale of the surplus element of S&J’s UK manufacturing facility at Wednesbury and the disposal of its US warehouse facility in Boca Raton was negatively impacted by the provision of HK$8.6 million manufacturing reorganization costs.

Segmental Review of Sales

Neill Tools

Sales of HK$341.9 million for the year ended 30 September 2005 showed a reduction of HK$3.9 million (1%) over last year’s sales of HK$345.9 million. The decrease was attributable to adverse volumes of HK$13.2 million and increased rebates of HK$2.3 million offset by favorable exchange movements of HK$11.7 million.

Eclipse Magnetics

Revenues for the year increased by HK$10.9 million (14.8%) from HK$72.4 million in 2004 to HK$83.3 million in 2005. This increase was due, in the main, to improved trading volumes of HK$7.8 million and favorable exchange differences of HK$3.1 million.

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SUPPLEMENTAL INFORMATION

APPENDIX I

Robert Sorby

Robert Sorby sales for the year showed no overall movement from last year (HK$38.9 million in both years), although favorable exchange movements of HK$1.6 million were offset by a volume decrease of HK$1.6 million.

Bowers Metrology

Sales for the year showed an increase of HK$14.8 milion (14.3%) from HK$106.7 million in 2004 to HK$121.5 million in 2005. HK$10.9 million of this increase is attributable to increased sales volume with the remaining HK$3.9 million due to favorable exchange rate variances.

S&J France

Sales in the year increased by HK$6.2 million from HK$74.7 million in 2004 to HK$81.0 million in 2005, the increase being attributable to favorable exchange rate variances of HK$3.9 million and volume increases of HK$2.3 million.

Australasia

Sales decreased from HK$135.5 million in 2004 to HK$116.8 million in 2005, the HK$18.7 million (13.8%) decrease being attributable to sales volume decreases of HK$23.4 million and increased sales rebate levels of HK$2.3 million offset by favorable exchange variances of HK$7.0 million.

Future Prospects

Going forward, the success factors critical to the business of the S&J Group include sales growth through penetration in new and existing markets; strategies to compete against low-cost suppliers; new product development to exploit S&J’s brand equity and technical expertise, reorganization of manufacturing and overhead bases so that they are as cost efficient as possible; and the maximization of cash resources and the negotiation of additional bank facilities, where required, to enable S&J to fund new initiatives and take advantage of market opportunities.

S&J intends to continue to launch new products and to explore initiatives to reduce its operational base costs, both in respect of raw materials and processes, in order to minimize margin erosion and to retain its competitive edge over cheap foreign imports. S&J’s management has already implemented a number of initiatives to improve profitability and to restructure its UK manufacturing base.

Significant Disposals

In 2005, the S&J Group completed the sale of part of its industrial site in Wednesbury, England and also concluded the disposal of its warehouse and office facility in Boca Raton, Florida, USA. The HK$25.5 million gain arising therefrom has been negatively impacted by the provision of HK$8.6 million manufacturing reorganization costs.

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SUPPLEMENTAL INFORMATION

APPENDIX I

Foreign Exchange Fluctuation Exposures and Hedges

S&J Group has operations in the United Kingdom, France, Holland, Australia and New Zealand which transact business in the relevant local currency and their financial statements are prepared in those currencies. Translation of the balance sheets, income statements and cash flows of these subsidiaries into US dollars is therefore impacted by changes in foreign exchange rates.

The S&J Group manages and attempts to reduce foreign exchange exposure on transactions by periodically entering into short term forward exchange contracts. However, the management of S&J has decided not to hedge against translation adjustments as they do not affect cash flow in the medium term.

Employee/Stock Options Plan

The number of persons employed by the S&J Group at September 30, 2005, 2004 and 2003 were 710, 755 and 764 respectively. 277 of the employees are subject to union agreements. Union contracts with Neill Tools at the Atlas and Wednesbury UK sites fall due for negotiation in June 2006 and January 2006 respectively and the agreements with the Bowers workforce at Bradford in the UK become due in July 2006. S&J believes its relationship with employees is good.

No stock options held by S&J directors and executive officers were exercised during the most recent fiscal year ended September 30, 2005. At September 30, 2005, no director or executive officer held any stock options.

Pension Plan

S&J has a defined benefit pension plan (“Plan”) covering certain of its UK employees, former employees and retirees. From May 2005, the annual pension contributions to the Plan increased from approximately HK$21.0 million to approximately HK$26.5 million. This rate of annual contribution will remain in place, subject to certain conditions, until April 2007 when it will be reviewed by the Plan actuary.

2. For the year ended and as at 30 September 2004

Shareholders’ Equity

S&J Group’s consolidated shareholders’ funds decreased from HK$228.8 million in 2003 to HK$207.0 million in 2004. The decrease of HK$21.8 million was largely due to an increase in retirement benefit obligations from HK$226.2 million to HK$294.9 million during the year.

Capital Structure/Liquidity and Financial Resources

As at 30 September 2004, cash and bank balances of the S&J Group amounted to HK$199 million with certain trade debt and bank borrowings amounting to HK$166 million (net cash of HK$33

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SUPPLEMENTAL INFORMATION

APPENDIX I

million), while the net asset value as at 30 September 2004 was HK$207 million. The working capital position of the S&J Group remains healthy. As at 30 September 2004, the liquidity ratio (ratio of current assets to current liabilities) was 164% with a gearing ratio of nil balance (ratio of net bank debt to net assets value).

The business operations of the S&J Group have been funded from net operating income supplemented, where necessary, by utilization of banking facilities. S&J Group believes its current cash resources, projected operating cash flow and bank lines of credit are sufficient to cover all of its expected working capital needs, planned capital expenditures and other cash requirements.

Charge of Assets

The credit facilities of the S&J Group are secured by fixed and floating charges on the assets and undertakings of the UK and certain other businesses.

Contingent Liabilities

S&J is currently involved in redundancy litigation with the former managing director of Spear & Jackson plc concerning a management reorganization program in November 2002. S&J believes that the amounts provided in respect of the dispute will be adequate to cover any amounts payable should its defense be unsuccessful.

Recent Developments

On April 15, 2004, the U.S. Securities and Exchange Commission (SEC) filed suit in the U.S. District Court for the Southern District of Florida, against S&J and Mr. Dennis Crowley, its then Chief Executive Officer/Chairman, among others, alleging violations of the federal security laws. On May 10, 2004, the Company, without admitting or denying the allegations of the SEC complaint, consented to the entry of a preliminary injunction and the Court appointment of a Corporate Monitor to oversee S&J’s operations.

S&J has been pursuing settlement negotiations with the SEC and Mr. Crowley. S&J has agreed to buy back for a nominal payment 6,005,561 common shares of the Company held by Mr Crowley, which represents approximately 51.1% of the outstanding common shares of the Company. S&J has consented, without admitting or denying the allegations, to a permanent injunction from violations of various sections and rules under the Securities Act of 1933 and the Securities Exchange Act of 1934. Mr. Crowley has consented to a final judgment, without admitting or denying the allegations, which requires a disgorgement payment of HK$29.3 million plus prejudgment interest in the amount of HK$2.4 million, as well as payment of a civil penalty in the amount of HK$15.6 million. The settlement arrangements are subject to court approval.

Subsequent to the SEC action, a number of class action lawsuits have been initiated in the U.S. District Court for the Southern District of Florida by shareholders against S&J and others. It is impossible at this time for the board of S&J to ascertain the ultimate legal and financial liability or whether these actions, as well as the SEC action, will have a material adverse effect on the Company’s financial condition and results of operations.

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SUPPLEMENTAL INFORMATION

APPENDIX I

Review of Performance and Segmental Information

Sales of HK$775.0 million for the year ended September 30, 2004 show an increase of HK$73.0 million over those recorded for the equivalent period last year, but there has been a significant decrease in income before tax from HK$34.8 million in 2003 to HK$14.9 million in 2004.

The increase in sales is primarily attributable to favorable currency exchange fluctuations in the year offset by sales volume decreases. While improvements in sales volumes were recorded in the UK trading divisions, these were offset by the continued impact of the loss, in late 2003, of a major Australian customer, the negative impact in certain export markets of the weak US dollar, soft domestic demand, lack of optimism in the capital goods manufacturing sector and fragile customer confidence following the removal from office of the Company’s former Chief Executive Officer.

Gross profit was 32.08% for the year ended 30 September, 2004 compared to 31.38% in the previous year. Margins have been adversely affected by increases in prices for the principal raw materials of steel, plastic, cobalt and nickel, increases in basic utility charges which form a key part of the manufacturing costs and the movement towards factored product, which has a lower contribution, in preference to own manufactured items.

S&J intends to continue to launch new products, to improve existing items, to market its portfolio of brands, and to explore initiatives to reduce its operational base costs, both in respect of raw materials and processes, in order to minimize margin erosion and to retain its competitive edge over cheap foreign imports.

Neill Tools

Revenues for the year to September 30, 2004 of HK$345.9 million showed an improvement of HK$54 million (18.3%) over last year’s revenues of HK$292.1 million. This increase was attributable to favorable exchange movements of HK$35.8 million, and increased volumes by of HK$26.5 million offset by an increase in sales rebates of HK$8.6 million.

Eclipse Magnetics

Sales for the year increased by HK$7.8 million (12.3%) from HK$64.6 million in 2003 to HK$72.4 million in 2004. The increase is due primarily to favorable exchange differences with sales volumes remaining static.

Robert Sorby

Sales for the year have increased by HK$9.3 million (29.8%), rising from HK$30.4 million in 2003 to HK$39.7 million in 2004. The increase is due to increased volume growth of HK$5.4 million and favorable exchange rates of HK$3.9 million.

Bowers Metrology

Sales for the year have increased by HK$14.0 million (13.3%), rising from $105.9 million in 2003 to HK$120.0 million in 2004. The increase is due primarily to favorable exchange fluctuations with only modest sales volume growth.

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SUPPLEMENTAL INFORMATION

APPENDIX I

S&J France

Sales have increased by HK$7.0 million (10.5%) from HK$67.7 million in 2003 to HK$74.8 million in 2004, the increase being attributable to favorable exchange rate variances of HK$8.6 million offset by increased rebates (HK$0.78 million) and volume decreases (HK$0.78 million)

Australasia

Sales decreased from HK$154.2 million in 2003 to HK$135.5 million in 2004, the HK$18.7 million (12.1%) decrease being attributable to sales volume decreases of HK$57.6 million compensated by favorable exchange variances of HK$31.9 million and reduced sales rebates of HK$6.2 million.

Material Acquisition/Disposals

In October 2003, S&J acquired the land and buildings occupied by its garden tools division in Wednesbury, England for HK$24.9 million. In December 2004, S&J agreed to sell the excess element of this site for approximately HK$41.3 million.

In March 2004, S&J purchased warehouse premises in Boca Raton, Florida for HK$25.7 million. Following the removal of S&J’s former CEO, the current board, in consultation with the Corporate Monitor, has performed a detailed review of its US sales and distribution strategy. As a result, the original initiative of setting up a central distribution unit in Florida for the company’s North American sales operations has been deferred. The warehouse has been placed for sale.

Future Prospects

The S&J Group is addressing the decrease in operating profitability by the launch of new products to re-establish its competitive edge over cheap imports. An extended woodsaw range has already been introduced to the market and the launch of a range of powered garden tools is planned for later in the year. Additionally, it is anticipated that S&J will continue to buy in finished and semi finished components as a cost efficient alternative to own manufacture.

S&J intends to continue exploring initiatives to reduce its manufacturing base costs, both in respect of raw materials and processes, in order to minimize margin erosion. Emphasis will continue to be placed on achieving a sales mix with a bias towards higher margin products, restructuring the UK manufacturing cost base, reducing warehouse and distribution costs in the UK and the augmentation of the sales and marketing functions.

Foreign Exchange Fluctuation Exposures and Hedges

— 14 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Employee/Stock Options Plan

The number of persons employed by the S&J Group at September 30, 2004, 2003 and 2002 were 755, 764 and 843 respectively. 339 of the Company’s employees are subject to union agreements. Union contracts with Neill Tools at the Atlas and Wednesbury UK sites fall due for negotiation in January 2005 and the agreements with the Bowers workforce at Bradford in the UK become due in July 2005. S&J believes its relationship with employees is good.

No stock options held by S&J directors and executive officers were exercised during our most recent fiscal year ended September 30, 2004. At September 30, 2004, no director or executive officer held any stock options.

3. For the year ended and as at 30 September 2003

Shareholders’ Equity

The S&J Group’s consolidated shareholders’ funds stood at HK$228.8 million at 30 September 2003.

Liquidity and Capital Resources

As at 30 September 2003, cash and bank balances amounted to HK$263.2 million with certain trade debt and bank borrowings amounting to HK$200.3 million (net cash of HK$62.9 million), while the S&J Group’s net asset value as at 30 September 2003 was HK$228.8 million. The working capital position of the S&J Group remains healthy. As at 30 September 2003, the liquidity ratio (ratio of current assets to current liabilities) was 165% and gearing ratio of nil balance (ratio of net bank debt to net assets value).

S&J’s business operations have been funded primarily from net operating income. S&J has also utilized bank loans and shareholder loans. Funding to finance new products launches will be from existing banking facilities. S&J believes that it has sufficient capital resources and liquidity over the short term to sustain its business operations.

Charge of Assets

The credit facilities of the S&J Group are secured by fixed and floating charges on the assets and undertakings of the UK and certain other businesses.

— 15 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Contingent Liabilities

The S&J Group is subject to legal proceedings and claims arising from the conduct of its business operations. The Directors believe that the aggregate amount of such liabilities, if any, in excess of amounts accrued or covered by insurance, will not have a material adverse effect on the financial position or results of operations of the S&J Group.

Review of Performance and Segmental Information

Net revenues from continuing activities increased by HK$17.5 million (2.5%) from $684.6 million in the year ended September 30, 2002 to HK$702.1 million in the twelve months to September 30, 2003.

The increase in revenues of HK$17.5 million in the year to September 30, 2003 compared to the comparable period in 2003 is attributable to net sales volume increases and favorable exchange movements. The sales volume increases have been diluted by reduced turnover in the UK following management’s decision to cease trading with a major hand tool wholesaler, Toolbank. This turnover reduction has had no adverse effect on margin.

As part of a key marketing strategy, sales mix has shifted significantly towards higher margin products. In addition, the margin benefit accruing from selling direct to major customers rather than through an intermediary wholesaler (Toolbank) has also favourably impacted on the trading results for the year ended September 30, 2003. Such margin improvements, allied to continuing strict cost control and manufacturing efficiencies have resulted in substantial improvements in the gross profit percentage and operating income.

Neill Tools

Revenues for the twelve months ended September 30, 2003 were HK$13 million less than those in the year ended September 30, 2002, with volume decreases (including sales reductions arising from a cessation of trade with a major wholesaler) offset by favorable exchange rate variances.

Eclipse Magnetics

Sales for the year ended 30 September 2003 were little changed from those in the previous year with advantageous exchange rate variances compensating for any reduction in sales volumes.

Robert Sorby

Revenues in the year ended September 30, 2003 showed a marginal decrease compared to revenues in the twelve months to September 30, 2002. The UK market performed strongly but by contrast, the US market was generally weak reflecting a softness in the economic climate.

— 16 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Bowers Metrology

Turnover in the twelve months ended 30 September 2003 showed little movement from the prior year with any adverse sales volume reductions mitigated by favourable exchange rate variances.

S&J France

Sales in the year ended September 30, 2003 increased by HK$13.2 million in the year, attributable to increased sales volume and advantageous exchange rate movements.

Australasia

S&J Australia and S&J New Zealand 2003 revenues were over HK$29.6 million more than those in the year ended September 30, 2002 comprising sales volume increases and favorable exchange rate movements.

Future Prospects

S&J aims to maintain and develop the revenues of its businesses through the launch of new products, the improvement of existing items and the continued marketing of its portfolio of brands in order to retain and gain market share.

S&J will continue to monitor and evaluate means of maintaining and improving current sales mixes and of further reducing costs of goods sold across all principal trading operations to avoid any margin erosion.

Foreign Exchange Fluctuation Exposures and Hedges

S&J uses forward contracts to hedge the effect of transaction gains and losses, which arise when payments of collections in a foreign currency are made or received one to three months after the asset or liability is generated. However, the management of S&J has decided not to hedge against translation adjustments as they do not affect cash flow in the medium term.

Employee/Stock Options Plan

At December 31, 2003, the S&J Group employed 757 full-time employees. 333 of the employees are subject to union agreements. Union contracts with Neill Tools at the Atlas and Wednesbury UK sites fall due for negotiation in January 2004 and the agreements with the Bowers workforce at Bradford in the UK become due in July 2004. S&J believes its relationship with employees is good.

— 17 —

SUPPLEMENTAL INFORMATION

APPENDIX I

On January 20, 2000, the Company’s board of directors approved a Stock Option Plan. The stock option plan was cancelled on September 6, 2002 following the acquisition of Megapro Tools, Inc., via a reverse takeover, on that date. No options were granted in the year to September 30, 2002 and 50,000 options were granted in the year ended 30 September 2003. The fair value of options granted in this period was HK$5.1.

4. For the period ended and as at 31 March 2006

Shareholders’ Equity

S&J Group’s consolidated shareholders’ funds decreased from HK$243.3 million to HK$151.5 million. The decrease of HK$91.8 million was due to an increase in pension and post-retirement benefit obligations (HK$16 million), decrease in inventories (HK$31 million) and decrease in bank balances and cash (HK$41 million).

Liquitity and Capital Resources

As at 31 March 2006, cash and bank balances amounted to HK$211 million with certain trade debt and bank borrowings amounting to HK$180 million (net cash of HK$31 million), while the S&J Group’s net asset value as at 31 March, 2006 was HK$151 million. The working capital position of the S&J Group remains healthy. As at 31 March, 2006, the liquidity ratio (ratio of current assets to current liabilities) was 160% and gearing ratio of nil balance (ratio of net bank debt to net assets value).

Additional funding may be required to finance the restructuring of the non-profitable areas of divisions and to meet items of significant one-off expenditure which may include costs associated with the closure and relocation of the manufacturing facility in Wednesbury, England; investment in new capital equipment; further special contribution payments to reduce the pension plan deficit; further set up costs, and investment in our business ventures in China; and any other expansion of the Spear & Jackson or Bowers operations. Funding of these initiatives may be obtained through the negotiation of increased bank lending facilities or the sale of surplus assets.

Charge of Assets

The credit facilities of the S&J Group are secured by fixed and floating charges on the assets and undertakings of the UK and certain other businesses.

— 18 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Contingent Liabilities

As at 31 March 2006, the S&J Group had contingent liabilities in connection with shareholders’ litigation against the Company and certain former and current officers and directors which, in the view of the Directors, cannot be reasonably ascertained. Additionally, from time to time, the S&J Group, is subject to legal proceedings and claims arising from the conduct of its business operations. The Directors believe that the aggregate amount of such liabilities, if any, in excess of amounts accrued or covered by insurance, will not have a material adverse effect on the financial position or results of operations of the S&J Group.

Review of Performance and Segmental Information

The loss before income tax for the period was HK$5.9 million compared to HK$36 million profit in the six months period last year, principally as a result of lower margins, higher overhead costs and manufacturing reorganization provisions.

Sales decreased by HK$15.3 million (3.74%) from HK$408.6 million in the comparable six months ended March 31, 2005 to HK$393.3 million for the six months ended March 31, 2006. In general, business conditions in many of its markets remained challenging as a result of sluggish consumer demand and continuing intense competition from rival suppliers across a number of product ranges.

Gross profit was 30.7% for the year ended 31 March, 2006 compared to 33.1% in previous period.

It is the aim of the S&J Group to maintain and develop the revenues of its businesses through the launch of new products, the improvement of existing items and the continued marketing of the S&J portfolio of brands in order to retain and gain market share.

Neill Tools

In the six months ended March 31, 2006 sales of HK$171.4 million were HK$10.2 (5.62%) million less than last year’s sales of HK$181.6 million. This decrease is attributable to adverse exchange movements of HK$12.5 million and increased sales rebates of HK$0.7 million offset by increased volumes of HK$3.0 million.

Eclipse Magnetics

Sales for the six months ended 31 March 2006 showed a 3.26% decrease of HK$1.4 million (2006, HK$42.1 million, 2005, HK$43.5 million) attributable to adverse exchange movements of HK$3.0 million mitigated by increased volumes of HK$1.6 million.

Robert Sorby

In the six month period ended March 31, 2006, sales have decreased by HK$1.8 million (8.32%) from HK$21.4 million in 2005 to HK$19.6 million in 2006 primarily due to adverse exchange variances of HK$1.4 million and reduced volumes of HK $0.4 million.

— 19 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Bowers Metrology

Sales have increased by HK$3.7 million (6.3%) from HK$58.8 million in 2005 to HK$62.5 million in 2006. This is attributable to increased volumes of HK$7.9 million and adverse exchange movements of HK$4.1 million.

S&J France

Overall, sales for the six month period ended March 31, 2006 sales have decreased by HK$2.9 million (6.5%) from HK$45.9 million in 2005 to HK$42.9 million in 2006, partially due to a depressed retail environment in France, increased competition from cheap imports and intense competition in the French market with a large proportion of garden product turnover being concentrated in a small number of retail outlets.

Australasia

Sales for the six months to March 31, 2006 sales have decreased by HK$2.6 million (4.7%) from HK$57.2 million in 2005 to HK$54.5 million in 2006. Adverse exchange movements of HK$2.0 million and increased rebates of HK$1.4 million were only partially compensated by increased volumes of HK$0.8 million.

Future Prospects

Going forward, the success factors critical to the business of the S&J Group include sales growth through penetration in new and existing markets; strategies to compete against low-cost suppliers; new product development to exploit S&J’s brand equity and technical expertise, reorganization of manufacturing and overhead bases so that they are as cost efficient as possible; and the maximization of cash resources and the negotiation of additional bank facilities, where required, so that we are able to fund new initiatives and take advantage of market opportunities, successful start up of new operations in China and elsewhere.

The S&J Group intends to continue to launch new products and to explore initiatives to reduce its operational base costs, both in respect of raw materials and processes, in order to minimize margin erosion and to retain its competitive edge over cheap foreign imports. The management of the S&J Group has already implemented a number of initiatives to improve profitability and to restructure its UK manufacturing base.

Foreign Exchange Fluctuation Exposures and Hedges

— 20 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5. For the period ended and as at 31 March 2005

Shareholders’ Equity

The S&J Group’s consolidated shareholders’ funds increased from HK$206.9 million in September 2004 to HK$243.3 million in March 2005. The increase was due to the increase of translation reserve during the period.

Liquidity and Capital Resources

As at 31 March 2005, cash and bank balances amounted to HK$252.6 million with certain trade debt and bank borrowings amounting to HK$182.7 million (net cash of HK$69.9 million), while the S&J Group’s net asset value as at 31 March, 2005 was HK$243 million. The working capital position of the S&J Group remains healthy. As at 31 March, 2005, the liquidity ratio (ratio of current assets to current liabilities) was 182% and gearing ratio of nil balance (ratio of net bank debt to net assets value).

Charge of Assets

The credit facilities of the S&J Group are secured by fixed and floating charges on the assets and undertakings of the businesses, while a bridging loan of HK$41.2 million to finance pension contribution is secured by a first legal charge over S&J’s Wednesbury land and property.

Contingent Liabilities

As at 31 March 2005, the S&J Group had contingent liabilities in connection with shareholders’ litigation against the Company and certain former and current officers and directors which, in the view of the Directors, cannot be reasonably ascertained. Additionally, from time to time, the S&J Group, is subject to legal proceedings and claims arising from the conduct of its business operations. The Directors believe that the aggregate amount of such liabilities, if any, in excess of amounts accrued or covered by insurance, will not have a material adverse effect on the financial position or results of operations of the S&J Group.

Review of Performance and Segmental Information

The results for the 6-month period ended 31 March 2005 show an increase of HK$6.6 million (278.69%) in operating income. S&J also recognised the HK$19.5 million profit arising on the sale of the surplus element of the Wednesbury, England facility and the disposal of its warehouse and office facility in Boca Raton, Florida, USA.

— 21 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Sales revenues for the period ended March 31, 2005 increased by approximately HK$6.0 million (2.82%) over the comparable period in the previous year. This gain is primarily attributable to favorable currency exchange fluctuations with slight improvements in sales volume.

Sales revenues for the six months ended 31 March 2005, increased by HK$22.6 million (5.75%), with the principal element again relating to favourable exchange differences.

Gross profit was 33% for the period ended 31 March, 2005 compared to 31.5% in previous year.

Selling, general and administrative expenses increased by HK$14.6 million (12.46%) in the six month period ended, attributable to continuing high levels of UK distribution costs following the move to a “direct to market” sales approach; US$/sterling cross rates in the period; general inflationary increases and increased FAS 87 pension costs.

Neill Tools

Sales for the six months ended March 31, 2005 sales of HK$181.5 million showed an increase of HK$15.6 (9.4%) million from last year’s sales of HK$165.9 million. This increase comprised favourable exchange movements of HK$10.1 million, increased volumes of HK$7.0 million offset by increased sales rebates of HK$1.6 million.

Eclipse Magnetics

Sales for the six months ended March 31, 2005 sales showed a 6.9% increase of HK$1.5 million (2005, HK$20.3 million, 2004, HK$21.8 million) attributable to favourable exchange movements of HK$2.3 million and increased volumes of HK$5.4million.

Robert Sorby

Sales for the six months ended March 31, 2005 sales showed a 21.8% increase of HK$7.8 million (2005, HK$43.6 million, 2004, HK$35.8 million) attributable to favourable exchange movements of HK$2.3 million and increased volumes of HK$5.4million.

Bowers Metrology

Sales have increased by HK$5.4 million (9%) from HK$60 million in 2004 to HK$65.4 million in 2005. This is attributable to increased volumes of HK$2.3 million and favourable exchange movements of HK$3.1 million.

S&J France

Sales have increased by HK$2.3 million (5.5%) from HK$43.6 million in 2004 to HK$46.0 million in 2005. This is attributable to increased volumes of HK$1.5 million and favourable exchange movements of HK$2.3 million.

— 22 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Australasia

Sales for the six months to March 31, 2005 have decreased by HK$10.9 million (16.1%) from HK$67.8 million in 2004 to HK$56.9 million in 2005. Volume reductions of HK$14.8 million were only partly compensated by favourable exchange movements of HK$2.3 million and decreased sales rebates of HK$1.5 million.

Future Prospect

In the forthcoming quarter S&J will continue to focus on maximising cash generation. The sale of the excess element of the Wednesbury manufacturing site in the UK was concluded on January 28, 2005 for approximately HK$41.3 million (excluding transaction costs). Further funds were generated via the disposal of the warehouse and office premises at Boca Raton, Florida. A sale of that property was concluded on February 15, 2005 for circa HK$26.5 million (net of sales commissions and other costs of disposal).

The proceeds of such sales will enable S&J to fund future working capital requirements, operational restructuring initiatives and other capital projects, both domestically and abroad, which will contribute to increased profitability and to the continued growth of the business. Additionally, the sales proceeds from the disposal of these two properties will help finance both the HK$59.2 million payment into the UK defined benefit pension plan and the increased annual pension contributions.

The Spear & Jackson S&J Group intends to launch new products and to explore initiatives to reduce its operating base costs, both in respect of raw materials and processes, in order to minimize margin erosion and to retain its competitive edge over cheap foreign imports.

The S&J Group’s management has already implemented a number of initiatives to improve profitability with emphasis placed on biasing sales mix towards higher margin products, restructuring of the UK operational cost bases and the augmentation of sales and marketing functions to maximize advantage from the new UK direct trading route. These restructuring costs and other initiatives, together with planned investment in new capital equipment in the UK, are anticipated to achieve improved efficiencies and reduce labor costs with corresponding improvements in the ongoing profitability of the S&J Group in the forthcoming year.

Foreign Exchange Fluctuation Exposures and Hedges

The S&J Group has operations in the United Kingdom, France, Holland, Australia and New Zealand which transact business in the relevant local currency and their financial statements are prepared in those currencies. Translation of the balance sheets, income statements and cash flows of these subsidiaries into US dollars is therefore impacted by changes in foreign exchange rates. The S&J Group manages and attempts to reduce foreign exchange exposure on transactions by periodically entering into short term forward exchange contracts. However, the management of S&J has decided not to hedge against translation adjustments as they do not affect cash flow in the medium term.

— 23 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5. LINE-BY-LINE RECONCILIATION BETWEEN U.S. GAAP AND HK GAAP FOR THE CONSOLIDATED INCOME STATEMENTS AND CONSOLIDATED BALANCE SHEETS OF S&J FOR THE RELEVANT PERIODS

5.1 Consolidated income statement for the year ended 30 September 2005

30 September 2005 Audited US GAAP US$’000 Net sales 100,698 Cost of goods sold 67,463 Gross profit 33,235 Operating costs and expenses: Selling, general and administrative expenses 31,405 Operating income 1,830 Other income Rental income 157 Interest (net) 47 Income from continuing operations before unusual or infrequent items and income taxes 2,034 Unusual or infrequent items Gain on sale of land and buildings 3,279 Manufacturing reorganization costs (1,111) Income from continuing operations before income taxes 4,202 Provision for income taxes (468) Net income from continuing operations 3,734 Discontinued operations: Loss from discontinued operations (net of income taxes of US$nil in 2005 and 2004 and US$44,000 in 2003) (163) Provision for losses on disposal of discontinued operations (476) Net loss from discontinued operations (639) Net income 3,095 Basic and diluted net income (loss) per share: From continuing operations $ 0.42 From discontinued operations (0.07) $ 0.35 Weighted average shares outstanding 8,845,290	FAS 87 Pensions Reversal US$’000	FRS 17 Pension Insertion US$’000	30 September 2005 Under HK GAAP US$’000 HK$’000 100,698 784,437 67,463 525,536	30 September 2005 Under HK GAAP US$’000 HK$’000 100,698 784,437 67,463 525,536
33,235 31,405 1,830 157 47 2,034 3,279 (1,111) 4,202 (468) 3,734 (163) (476) (639)	— (3,991) 3,991 3,991 3,991 (1,197) 2,794 —	— 1,686 (1,686) 146 (1,540) (1,540) 462 (1,078) —	33,235 29,100 4,135 157 193 4,485 3,279 (1,111) 6,653 (1,203) 5,450 (163) (476) (639)	258,901 226,688
				32,213 1,223 1,503
				34,939 25,543 (8,655
				51,827 (9,371
				42,456 (1,270 (3,708
				(4,978
3,095	2,794	(1,078)	4,811	37,478
$ 0.42 (0.07)	$ 0.32 0.00	$ (0.12) 0.00	$ 0.62 (0.07)	$ 4.80 (0.56
$ 0.35 8,845,290	$ 0.32 8,845,290	$ (0.12) 8,845,290	$ 0.55 8,845,290	$ 4.24
				8,845,290

— 24 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.2 Consolidated income statement for the year ended 30 September 2004

30 September 2004 Audited US GAAP US$’000 Net sales 99,485 Cost of goods sold 67,574 Gross profit 31,911 Operating costs and expenses: Selling, general and administrative expenses 29,753 Operating income 2,158 Other income (expense) Rental income 184 Interest (net) (300) Income from continuing operations before unusual or infrequent items and income taxes 2,042 Unusual or infrequent items Gain on sale of land and buildings — Manufacturing reorganization costs — Income from continuing operations before income taxes 2,042 Provision for income taxes (1,205) Net income from continuing operations 837 Discontinued operations: Loss from discontinued operations (net of income taxes of US$nil in 2005 and 2004 and US$44,000 in 2003) (214) Provision for losses on disposal of discontinued operations (187) Net loss from discontinued operations (401) Net income 436 Basic and diluted net income (loss) per share: From continuing operations $ 0.07 From discontinued operations (0.03) $ 0.04 Weighted average shares outstanding 11,741,122	FAS 87 Pensions Reversal US$’000	FRS 17 Pension Insertion US$’000	30 September 2004 Under HK GAAP US$’000 HK$’000 99,485 774,988 67,574 526,401	30 September 2004 Under HK GAAP US$’000 HK$’000 99,485 774,988 67,574 526,401
31,911 29,753 2,158 184 (300) 2,042 — — 2,042 (1,205) 837 (214) (187) (401)	— (1,295) 1,295 1,295 1,295 (389) 906 —	— 1,536 (1,536) 118 (1,418) (1,418) 426 (992) —	31,911 29,994 1,917 184 (182) 1,919 — — 1,919 (1,168) 751 (214) (187) (401)	248,587 233,653
				14,934 1,433 (1,418
				14,949
				14,949 (9,099
				5,850 (1,667 (1,457
				(3,124
436	906	(992)	350	2,726
$ 0.07 (0.03)	$ 0.10 0.00	$ (0.11) 0.00	$ 0.08 (0.05)	$ 0.66 (0.35
$ 0.04 11,741,122	$ 0.10 11,741,122	$ (0.11) 11,741,122	$ 0.03 11,741,122	$ 0.31
				11,741,122

— 25 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.3 Consolidated income statement for the year ended 30 September 2003

30 September 2003 Audited US GAAP US$’000 Net sales 90,124 Cost of goods sold 61,838 Gross profit 28,286 Operating costs and expenses: Selling, general and administrative expenses 21,909 Operating income 6,377 Other income (expense) Rental income 136 Interest (net) (237) Income from continuing operations before unusual or infrequent items and income taxes 6,276 Unusual or infrequent items Gain on sale of land and buildings — Manufacturing reorganization costs — Income from continuing operations before income taxes 6,276 Provision for income taxes (1,497) Net income from continuing operations 4,779 Discontinued operations: Loss from discontinued operations (net of income taxes of US$nil in 2005 and 2004 and US$44,000 in 2003) (66) Provision for losses on disposal of discontinued operations (97) Net loss from discontinued operations (163) Net income 4,616 Basic and diluted net income (loss) per share: From continuing operations $ 0.40 From discontinued operations (0.01) $ 0.39 Weighted average shares outstanding 11,988,930	FAS 87 Pensions deletion US$’000	FRS 17 Pensions Insertion US$’000	30 September 2003 Under HK GAAP US$’000 HK$’000 90,124 702,066 61,838 481,718	30 September 2003 Under HK GAAP US$’000 HK$’000 90,124 702,066 61,838 481,718
28,286 21,909 6,377 136 (237) 6,276 — — 6,276 (1,497) 4,779 (66) (97) (163)	— (274) 274 274 274 (82) 192 —	— 1,598 (1,598) (479) (2,077) (2,077) 622 (1,455) —	28,286 23,233 5,053 136 (716) 4,473 — — 4,473 (957) 3,516 (66) (97) (163)	220,348 180,985
				39,363 1,059 (5,577
				34,845
				34,845 (7,455
				27,390
				(514 (756
				(1,270
4,616	192	(1,455)	3,353	26,120
$ 0.40 (0.01)	$ 0.02 0.00	$ (0.16) 0.00	$ 0.40 (0.02)	$ 3.10 (0.14
$ 0.39 11,988,930	$ 0.02 11,988,930	$ (0.16) 11,988,930	$ 0.38 11,988,930	$ 2.96
				11,988,930

— 26 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.4 Consolidated income statement for the 6 months ended 31 March 2006

	31 March	31 March		FAS 87		FRS 17
		2006 US		Pensions		Pension		31 March 2006
		GAAP		Reversal		Insertion		Under	HK	GAAP
		US$’000		US$’000		US$’000		US$’000		HK$’000
Net sales		50,498						50,498		393,379
Cost of goods sold		34,975						34,975		272,455
Gross profit		15,523		—		—		15,523		120,924
Operating costs and expenses:
Selling, general and administrative expenses		18,423		(4,060)		1,040		15,403		119,988
Operating (loss) income		(2,900)		4,060		(1,040)		120		936
Other income
Rental income		74						74		576
Interest (net)		13				254		267		2,080
Income from continuing operations before unusual
or infrequent items and income taxes		(2,813)		4,060		(786)		461		3,592
Unusual or infrequent items
Gain on sale of land and buildings		—						—		—
Manufacturing reorganization costs		(1,228)						(1,228)		(9,566)
(Loss) from continuing operations before income
taxes		(4,041)		4,060		(786)		(767)		(5,974)
Provision for income taxes		313		(624)		134		(177)		(1,379)
Net (loss) from continuing operations		(3,728)		3,436		(652)		(944)		(7,353)
Discontinued operations:
Loss from discontinued operations (net of
income taxes of $nil in 2005 and 2004 and
$44,000 in 2003)		(87)						(87)		(678)
Provision for losses on disposal of
discontinued operations		9						9		70
Net loss from discontinued operations		(78)		—		—		(78)		(608)
Net (Loss)		(3,806)		3,436		(652)		(1,022)		(7,961)
Basic and diluted net income (loss) per share:
From continuing operations	$	(0.65)	$	0.60	$	(0.11)	$	(0.16)	$	(1.28)
From discontinued operations		(0.01)		0.00		0.00		(0.01)		(0.11)
	$	(0.66)	$	0.60	$	(0.11)	$	(0.17)	$	(1.39)
Weighted average shares outstanding
		5,735,561		5,735,561		5,735,561		5,735,561		5,735,561

— 27 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.5 Consolidated income statement for the 6 months ended 31 March 2005

March 2005 Audited US GAAP US$’000 52,458 35,091	FAS 87 Pensions Reversal US$’000	FRS 17 Pension Insertion US$’000	31 March 2005 Under HK GAAP US$’000 HK$’000 52,458 408,648 35,091 273,359	31 March 2005 Under HK GAAP US$’000 HK$’000 52,458 408,648 35,091 273,359
17,367 16,542 825 79 (41) 863 2,503 — 3,366 (448) 2,918 (372) — (372)	— (2,027) 2,027 2,027 2,027 (608) 1,419 —	— 869 (869) 75 (794) (794) 238 (556) —	17,367 15,384 1,983 79 34 2,096 2,503 — 4,599 (818) 3,781 (372) — (372)	135,289 119,841
				15,448 615 265
				16,328 19,498 —
				35,826 (6,372
				29,454 (2,898 —
				(2,898
2,546	1,419	(556)	3,409	26,556
$ 0.25 (0.03)	$ 0.12 0.00	$ (0.05) 0.00	$ 0.32 (0.03)	$ 2.51 (0.25
$ 0.22 11,741,122	$ 0.12 11,741,122	$ (0.05) 11,741,122	$ 0.29 11,741,122	$ 2.26
				11,741,122

— 28 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.6 Consolidated balance sheet as at 30 September 2005

As at 30 September 2005 Audited US GAAP US$’000 Current assets: Cash and cash equivalents 7,289 Trade receivables, net 16,448 Inventories 24,999 Assets held for sale Deferred income tax, current portion 2,623 Other current assets 1,316 Total current assets 52,675 Property, plant and equipment, net 17,568 Deferred income tax asset 12,690 Investments 157 Total assets 83,090 Current liabilities: Notes payable and bank overdraft 752 Trade accounts payable 8,103 Accrued expenses and other liabilities 11,241 Taxes payable 88 Total current liabilities 20,184 Other liabilities 749 Pension liability 35,954 Total liabilities 56,887	Elminate FAS 87 Pension US$’000	Insert FRS 17 Pension US$’000	Reclassifi- cations US$’000 20,400 (2,623)	As at 30 September 2005 Under HK GAAP US$’000 HK$’000 27,689 215,697 16,448 128,130 24,999 194,742 — — — — 1,316 10,252	As at 30 September 2005 Under HK GAAP US$’000 HK$’000 27,689 215,697 16,448 128,130 24,999 194,742 — — — — 1,316 10,252
52,675 17,568 12,690 157	— (10,811)	— 12,898	17,777 2,623	70,452 17,568 17,400 157	548,821 136,855 135,546 1,223
83,090	(10,811)	12,898	20,400	105,577	822,445
752 8,103 11,241 88 20,184 749 35,954 56,887	(84) (84) — (35,954) (36,038)	111 111 42,994 43,105	20,400 20,400 20,400	21,152 8,103 11,268 88 40,611 749 42,994 84,354	164,774 63,122 87,778 686
					316,360 5,835 334,923
					657,118

— 29 —

APPENDIX I

SUPPLEMENTAL INFORMATION

As at 30 September 2005 Audited US GAAP US$’000 Stockholders’ equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Other Reserves Hedging and translation reserves Minimum pension liability (43,751) Foreign currency translation adjustment 11,765 Unrealized loss on derivative instruments (7) Retained earnings 4,039 Income for the year 3,095 Less common stock shares held in treasury (540) Total stockholders’ equity 26,203 Total liabilities and stockholders’ equity 83,090	Elminate FAS 87 Pension US$’000 — 43,751 (1,730) (19,588) 2,794 — 25,227 (10,811)	Insert FRS 17 Pension US$’000 — (3,200) (25,929) (1,078) (30,207) 12,898	Reclassifi- cations US$’000 — — — 6,828 — (6,835) 7 — 20,400	As at 30 September 2005 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — 6,828 53,190 — — — — — — (41,478) (323,113) 4,811 37,478 (540) (4,207) 21,223 165,327 105,577 822,445	As at 30 September 2005 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — 6,828 53,190 — — — — — — (41,478) (323,113) 4,811 37,478 (540) (4,207) 21,223 165,327 105,577 822,445
					165,327
					822,445

— 30 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.7 Consolidated balance sheet as at 30 September 2004

As at 30 September 2004 Audited US GAAP US$’000 Current assets: Cash and cash equivalents 5,090 Trade receivables, net 18,843 Inventories 21,988 Assets held for sale 3,190 Deferred income tax, current portion 2,128 Other current assets 1,310 Total current assets 52,549 Property, plant and equipment, net 22,114 Deferred income tax asset 10,933 Investments 160 Total assets 85,756 Current liabilities: Notes payable and bank overdraft 68 Trade accounts payable 8,562 Accrued expenses and other liabilities 12,948 Taxes payable 22 Total current liabilities 21,600 Other liabilities 1,172 Pension liability 33,545 Total liabilities 56,317	Elminate FAS 87 Pension US$’000	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 20,500 (2,128)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 20,500 (2,128)	As at 30 September 2004 Under HK GAAP US$’000 HK$’000 25,590 199,346 18,843 146,787 21,988 171,287 3,190 24,850 — — 1,310 10,205	As at 30 September 2004 Under HK GAAP US$’000 HK$’000 25,590 199,346 18,843 146,787 21,988 171,287 3,190 24,850 — — 1,310 10,205
52,549 22,114 10,933 160	— (10,064)	— 11,357	18,372 (629) 2,128	70,921 21,485 14,354 160	552,475 167,368 111,818 1,246
85,756	(10,064)	11,357	19,871	106,920	832,907
68 8,562 12,948 22 21,600 1,172 33,545 56,317	(139) (139) (33,545) (33,684)	(13) (13) 37,859 37,846	20,500 (629) 19,871 19,871	20,568 8,562 12,167 22 41,319 1,172 37,859 80,350	160,225 66,698 94,781 171
					321,875 9,130 294,922
					625,927

— 31 —

SUPPLEMENTAL INFORMATION

APPENDIX I

As at 30 September 2004 Audited US GAAP US$’000 Stockholder’s equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Other Reserves Hedging and translation reserves Minimum pension liability (38,030) Foreign currency translation adjustment 12,429 Unrealized loss on derivative instruments (61) Retained earnings 3,603 Income for the year 436 Less common stock shares held in treasury (540) Total stockholders’ equity 29,439 Total liabilities and stockholders’ equity 85,756	Elminate FAS 87 Pension US$’000 38,030 (2,005) (13,311) 906 — 23,620 (10,064)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 6,992 (3,371) (7,053) 61 (22,126) (992) — (26,489) — 11,357 19,871	As at 30 September 2004 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — 6,992 54,469 — — — — — — (31,834) (247,987) 350 2,726 (540) (4,207) 26,570 206,980 106,920 832,907	As at 30 September 2004 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — 6,992 54,469 — — — — — — (31,834) (247,987) 350 2,726 (540) (4,207) 26,570 206,980 106,920 832,907
				206,980
				832,907

— 32 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.8 Consolidated balance sheet as at 30 September 2003

As at 30 September 2003 Audited US GAAP US$’000 Current assets: Cash and cash equivalents 9,191 Trade receivables, net 15,432 Inventories 23,350 Assets held for sale Deferred income tax, current portion 2,594 Other current assets 999 Total current assets 51,566 Property, plant and equipment, net 19,561 Deferred income tax asset 8,325 Investments 148 Total assets 79,600 Current liabilities: Notes payable and bank overdraft 304 Trade accounts payable 7,552 Accrued expenses and other liabilities 12,793 Taxes payable 50 Total current liabilities 20,699 Other liabilities 1,787 Pension liability 25,262 Total liabilities 47,748 Stockholders’ equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Other reseves Hedging and translation reserves Minimum pension liability (30,204) Foreign currency translation adjustment 7,406 Unrealized loss on derivative instruments (15) Retained earnings (1,013) Income for the year 4,616 Less common stock shares held in treasury (540) Total stockholders’ equity 31,852 Total liabilities and stockholders’ equity 79,600	Elminate FAS 87 Pension US$’000	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 24,600 (2,594)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 24,600 (2,594)	As at 30 September 2003 Under HK GAAP US$’000 HK$’000 33,791 263,232 15,432 120,215 23,350 181,897 — — — — 999 7,782	As at 30 September 2003 Under HK GAAP US$’000 HK$’000 33,791 263,232 15,432 120,215 23,350 181,897 — — — — 999 7,782
51,566 19,561 8,325 148	— (7,579)	— 8,713	22,006 (581) 2,594	73,572 18,980 12,053 148	573,126 147,855 93,893 1,153
79,600	(7,579)	8,713	24,019	104,753	816,027
304 7,552 12,793 50 20,699 1,787 25,262 47,748 12 51,590 (30,204) 7,406 (15) (1,013) 4,616 (540) 31,852	(123) (123) (25,262) (25,385) 30,204 (981) (11,609) 192 17,806	(45) (45) 29,045 29,000 (1,667) (17,165) (1,455) (20,287)	24,600 (581) 24,019 24,019 4,743 (4,758) 15 —	24,904 7,552 12,044 50 44,550 1,787 29,045 75,382 12 51,590 — — 4,743 — — — (29,787) 3,353 (540) 29,371	194,002 58,830 93,823 390
					347,045 13,921 226,261
					587,227
					93 401,886 — — 36,949 — — — (232,041 26,120 (4,207
					228,800
79,600	(7,579)	8,713	24,019	104,753	816,027

— 33 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.9 Consolidated balance sheet as at 31 March 2006

As at 31 March 2006 US GAAP US$’000 Current assets: Cash and cash equivalents 5,980 Trade receivables, net 19,982 Inventories 22,694 Foreign taxes recoveable 185 Deferred income tax, current portion 2,663 Other current assets 1,355 Total current assets 52,859 Property, plant and equipment, net 17,182 Deferred income tax asset 12,884 Investments 380 Total assets 83,305 Current liabilities: Notes payable and bank overdraft 1,408 Trade accounts payable 9,606 Accrued expenses and other liabilities 12,150 Taxes payable 145 Total current liabilities 23,309 Other liabilities 789 Pension liability 37,469 Total liabilities 61,567	Elminate FAS 87 Pension US$’000	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 21,130 (2,663)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 21,130 (2,663)	As at 31 March 2006 Under HK GAAP US$’000 HK$’000 27,110 211,187 19,982 155,660 22,694 176,786 185 1,441 — — 1,355 10,555	As at 31 March 2006 Under HK GAAP US$’000 HK$’000 27,110 211,187 19,982 155,660 22,694 176,786 185 1,441 — — 1,355 10,555
52,859 17,182 12,884 380	— (10,940)	— 12,337	18,467 2,663	71,326 17,182 16,944 380	555,629 133,848 131,994 2,960
83,305	(10,940)	12,337	21,130	105,832	824,431
1,408 9,606 12,150 145 23,309 789 37,469 61,567	(84) (84) (37,469) (37,553)	111 111 41,127 41,238	21,130 21,130 21,130	22,538 9,606 12,177 145 44,466 789 41,127 86,382	175,571 74,831 94,858 1,130
					346,390 6,147 320,379
					672,916

— 34 —

APPENDIX I

SUPPLEMENTAL INFORMATION

As at 31 March 2006 US GAAP US$’000 Stockholders’ equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Deferred tax thereon Other Reserves Hedging and translation reserves Minimum pension liability (42,902) Foreign currency translation adjustment 10,219 Unrealized loss on derivative instruments 31 Retained earnings 7,134 (Loss) Income for the year (3,806) Less common stock shares held in treasury (540) Total stockholders’ equity 21,738 Total liabilities and stockholders’ equity 83,305	As at 31 March 2006 US GAAP US$’000 Stockholders’ equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Deferred tax thereon Other Reserves Hedging and translation reserves Minimum pension liability (42,902) Foreign currency translation adjustment 10,219 Unrealized loss on derivative instruments 31 Retained earnings 7,134 (Loss) Income for the year (3,806) Less common stock shares held in treasury (540) Total stockholders’ equity 21,738 Total liabilities and stockholders’ equity 83,305	Elminate FAS 87 Pension US$’000 42,902 (1,383) (18,342) 3,436	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 6,240 (2,627) (6,209) (31) (25,622) (652)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 6,240 (2,627) (6,209) (31) (25,622) (652)	As at 31 March 2006 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — — — 6,240 48,609 — — — — — — (36,830) (286,906) (1,022) (7,960) (540) (4,207)	As at 31 March 2006 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — — — 6,240 48,609 — — — — — — (36,830) (286,906) (1,022) (7,960) (540) (4,207)
	21,738	26,613	(28,901)	—	19,450	151,515
	83,305	(10,940)	12,337	21,130	105,832	824,431

— 35 —

SUPPLEMENTAL INFORMATION

APPENDIX I

5.10 Consolidated balance sheet as at 31 March 2005

As at 31 March 2005 Unaudited US GAAP US$’000 Current assets: Cash and cash equivalents 9,924 Trade receivables, net 22,005 Inventories 26,636 Assets held for sale — Deferred income tax, current portion 2,179 Other current assets 1,852 Total current assets 62,596 Property, plant and equipment, net 20,094 Deferred income tax asset 11,196 Investments 168 Total assets 94,054 Current liabilities: Notes payable and bank overdraft 81 Trade accounts payable 9,574 Accrued expenses and other liabilities 14,063 Taxes payable 76 Total current liabilities 23,794 Other liabilities 1,049 Pension liability 35,821 Total liabilities 60,664	Elminate FAS 87 Pension US$’000	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 22,500 (2,179)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 22,500 (2,179)	As at 31 March 2005 Under HK GAAP US$’000 HK$’000 32,424 252,583 22,005 171,419 26,636 207,494 — — — — 1,852 14,427	As at 31 March 2005 Under HK GAAP US$’000 HK$’000 32,424 252,583 22,005 171,419 26,636 207,494 — — — — 1,852 14,427
62,596 20,094 11,196 168	— (10,746)	— 11,735	20,321 (661) 2,179	82,917 19,433 14,364 168	645,923 151,383 111,896 1,309
94,054	(10,746)	11,735	21,839	116,882	910,511
81 9,574 14,063 76 23,794 1,049 35,821 60,664	(139) (139) (35,821) (35,960)	(13) (13) 39,115 39,102	22,500 (661) 21,839 21,839	22,581 8,913 13,911 76 45,481 1,049 39,115 85,645	175,906 69,432 108,367 592
					354,297 8,172 304,706
					667,175

— 36 —

APPENDIX I

SUPPLEMENTAL INFORMATION

As at 31 March 2005 Unaudited US GAAP US$’000 Stockholders’ equity: Common stock 12 Share Premium 51,590 Accumulated other comprehensive income(loss): FRS 17 Pension creditor Other Reserves Hedging and translation reserves Minimum pension liability (39,959) Foreign currency translation adjustment 15,706 Unrealized loss on derivative instruments (4) Retained earnings 4,039 Income for the year 2,546 Less common stock shares held in treasury (540) Total stockholders’ equity 33,390 Total liabilities and stockholders’ equity 94,054	Elminate FAS 87 Pension US$’000 39,959 1,119 (17,283) 1,419 25,214 (10,746)	Insert FRS 17 Pension Reclassifi- cations US$’000 US$’000 12,108 (4,713) (12,112) 4 (22,098) (556) (27,367) — 11,735 21,839	As at 31 March 2005 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — 12,108 94,322 — — — — — — (35,342) (275,314) 3,409 26,556 (540) (4,207) 31,237 243,336 116,882 910,511	As at 31 March 2005 Under HK GAAP US$’000 HK$’000 12 93 51,590 401,886 — — — — 12,108 94,322 — — — — — — (35,342) (275,314) 3,409 26,556 (540) (4,207) 31,237 243,336 116,882 910,511
				243,336
				910,511

— 37 —

SUPPLEMENTAL INFORMATION

APPENDIX I

6. CONSOLIDATED INCOME STATEMENTS AND CONSOLIDATED BALANCE SHEETS OF S&J ON CONVERSION FROM US GAAP TO HK GAAP FOR THE YEARS ENDED 30 SEPTEMBER 2003, 2004 AND 2005, AND FOR EACH OF THE SIX MONTHS ENDED 31 MARCH 2005 AND 2006 AND RECONCILIATION STATEMENT BETWEEN US GAAP AND HK GAAP

CONSOLIDATED INCOME STATEMENTS (prepared under HK GAAP)

FOR EACH OF THE THREE YEARS ENDED 30 SEPTEMBER 2005, 2004 AND 2003 AND EACH OF THE SIX MONTHS ENDED 31 MARCH 2006 AND 2005

Years ended 30 September 2005 2004 2003 HK$’000 HK$’000 HK$’000 784,437 774,988 702,066 (525,536) (526,401) (481,718)	Years ended 30 September 2005 2004 2003 HK$’000 HK$’000 HK$’000 784,437 774,988 702,066 (525,536) (526,401) (481,718)	Years ended 30 September 2005 2004 2003 HK$’000 HK$’000 HK$’000 784,437 774,988 702,066 (525,536) (526,401) (481,718)	Six months ended 31 March 2006 2005 HK$’000 HK$’000 393,379 408,648 (272,455) (273,359) 120,924 135,289 3,373 2,119 — 25,006 (87,815) (94,523) (32,173) (25,318) (9,566) (5,508) (717) (1,239) (5,974) 35,826 (1,379) (6,372) (7,353) 29,454 (678) (2,898) 70 — (608) (2,898) (7,961) 26,556	Six months ended 31 March 2006 2005 HK$’000 HK$’000 393,379 408,648 (272,455) (273,359) 120,924 135,289 3,373 2,119 — 25,006 (87,815) (94,523) (32,173) (25,318) (9,566) (5,508) (717) (1,239) (5,974) 35,826 (1,379) (6,372) (7,353) 29,454 (678) (2,898) 70 — (608) (2,898) (7,961) 26,556
258,901 5,188 25,543 (179,933) (46,755) (8,655) (2,462) 51,827 (9,371) 42,456 (1,270) (3,708) (4,978)	248,587 2,960 — (181,951) (51,702) — (2,945) 14,949 (9,099) 5,850 (1,667) (1,457) (3,124)	220,348 1,854 — (134,214) (46,771) — (6,372) 34,845 (7,455) 27,390 (514) (756) (1,270)	120,924 3,373 — (87,815) (32,173) (9,566) (717) (5,974) (1,379) (7,353) (678) 70 (608)	135,289 2,119 25,006 (94,523 (25,318 (5,508 (1,239
				35,826 (6,372
				29,454
				(2,898 —
				(2,898
37,478	2,726	26,120	(7,961)

— 38 —

SUPPLEMENTAL INFORMATION

APPENDIX I

CONSOLIDATED BALANCE SHEETS (prepared under HK GAAP)

AT 30 SEPTEMBER 2005, 2004, 2003 AND 31 MARCH 2006 AND 2005

At 30 September At 31 March 2005 2004 2003 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Non-current assets Property, plant and equipment 136,855 167,368 147,855 133,848 151,383 Available-for-sale investments 1,223 1,246 1,153 2,960 1,309 Deferred income tax asset 135,546 111,818 93,893 131,994 111,896 273,624 280,432 242,901 268,802 264,588 Current assets Inventories 194,742 171,287 181,897 176,786 207,494 Debtors and prepayments 138,382 156,992 127,997 166,215 185,846 Tax recoverable — — — 1,441 — Bank balances and cash 215,697 199,346 263,232 211,187 252,583 548,821 527,625 573,126 555,629 645,923 Assets held for sale — 24,850 — — — 548,821 552,475 573,126 555,629 645,923 Current liabilities Creditors and accrued charges 146,125 155,224 146,335 165,397 170,936 Obligations under finance leases — amount due with one year 4,775 6,255 6,318 4,292 6,863 Taxation payable 686 171 390 1,130 592 Bank overdrafts 164,774 160,225 194,002 175,571 175,906 316,360 321,875 347,045 346,390 354,297 Net current assets 232,461 230,600 226,081 209,239 291,626 Total assets less current liabilities 506,085 511,032 468,982 478,041 556,214	At 30 September At 31 March 2005 2004 2003 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Non-current assets Property, plant and equipment 136,855 167,368 147,855 133,848 151,383 Available-for-sale investments 1,223 1,246 1,153 2,960 1,309 Deferred income tax asset 135,546 111,818 93,893 131,994 111,896 273,624 280,432 242,901 268,802 264,588 Current assets Inventories 194,742 171,287 181,897 176,786 207,494 Debtors and prepayments 138,382 156,992 127,997 166,215 185,846 Tax recoverable — — — 1,441 — Bank balances and cash 215,697 199,346 263,232 211,187 252,583 548,821 527,625 573,126 555,629 645,923 Assets held for sale — 24,850 — — — 548,821 552,475 573,126 555,629 645,923 Current liabilities Creditors and accrued charges 146,125 155,224 146,335 165,397 170,936 Obligations under finance leases — amount due with one year 4,775 6,255 6,318 4,292 6,863 Taxation payable 686 171 390 1,130 592 Bank overdrafts 164,774 160,225 194,002 175,571 175,906 316,360 321,875 347,045 346,390 354,297 Net current assets 232,461 230,600 226,081 209,239 291,626 Total assets less current liabilities 506,085 511,032 468,982 478,041 556,214	At 30 September At 31 March 2005 2004 2003 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Non-current assets Property, plant and equipment 136,855 167,368 147,855 133,848 151,383 Available-for-sale investments 1,223 1,246 1,153 2,960 1,309 Deferred income tax asset 135,546 111,818 93,893 131,994 111,896 273,624 280,432 242,901 268,802 264,588 Current assets Inventories 194,742 171,287 181,897 176,786 207,494 Debtors and prepayments 138,382 156,992 127,997 166,215 185,846 Tax recoverable — — — 1,441 — Bank balances and cash 215,697 199,346 263,232 211,187 252,583 548,821 527,625 573,126 555,629 645,923 Assets held for sale — 24,850 — — — 548,821 552,475 573,126 555,629 645,923 Current liabilities Creditors and accrued charges 146,125 155,224 146,335 165,397 170,936 Obligations under finance leases — amount due with one year 4,775 6,255 6,318 4,292 6,863 Taxation payable 686 171 390 1,130 592 Bank overdrafts 164,774 160,225 194,002 175,571 175,906 316,360 321,875 347,045 346,390 354,297 Net current assets 232,461 230,600 226,081 209,239 291,626 Total assets less current liabilities 506,085 511,032 468,982 478,041 556,214	At 30 September At 31 March 2005 2004 2003 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Non-current assets Property, plant and equipment 136,855 167,368 147,855 133,848 151,383 Available-for-sale investments 1,223 1,246 1,153 2,960 1,309 Deferred income tax asset 135,546 111,818 93,893 131,994 111,896 273,624 280,432 242,901 268,802 264,588 Current assets Inventories 194,742 171,287 181,897 176,786 207,494 Debtors and prepayments 138,382 156,992 127,997 166,215 185,846 Tax recoverable — — — 1,441 — Bank balances and cash 215,697 199,346 263,232 211,187 252,583 548,821 527,625 573,126 555,629 645,923 Assets held for sale — 24,850 — — — 548,821 552,475 573,126 555,629 645,923 Current liabilities Creditors and accrued charges 146,125 155,224 146,335 165,397 170,936 Obligations under finance leases — amount due with one year 4,775 6,255 6,318 4,292 6,863 Taxation payable 686 171 390 1,130 592 Bank overdrafts 164,774 160,225 194,002 175,571 175,906 316,360 321,875 347,045 346,390 354,297 Net current assets 232,461 230,600 226,081 209,239 291,626 Total assets less current liabilities 506,085 511,032 468,982 478,041 556,214	At 30 September At 31 March 2005 2004 2003 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Non-current assets Property, plant and equipment 136,855 167,368 147,855 133,848 151,383 Available-for-sale investments 1,223 1,246 1,153 2,960 1,309 Deferred income tax asset 135,546 111,818 93,893 131,994 111,896 273,624 280,432 242,901 268,802 264,588 Current assets Inventories 194,742 171,287 181,897 176,786 207,494 Debtors and prepayments 138,382 156,992 127,997 166,215 185,846 Tax recoverable — — — 1,441 — Bank balances and cash 215,697 199,346 263,232 211,187 252,583 548,821 527,625 573,126 555,629 645,923 Assets held for sale — 24,850 — — — 548,821 552,475 573,126 555,629 645,923 Current liabilities Creditors and accrued charges 146,125 155,224 146,335 165,397 170,936 Obligations under finance leases — amount due with one year 4,775 6,255 6,318 4,292 6,863 Taxation payable 686 171 390 1,130 592 Bank overdrafts 164,774 160,225 194,002 175,571 175,906 316,360 321,875 347,045 346,390 354,297 Net current assets 232,461 230,600 226,081 209,239 291,626 Total assets less current liabilities 506,085 511,032 468,982 478,041 556,214
273,624 194,742 138,382 — 215,697 548,821 — 548,821 146,125 4,775 686 164,774 316,360 232,461 506,085	280,432 171,287 156,992 — 199,346 527,625 24,850 552,475 155,224 6,255 171 160,225 321,875 230,600 511,032	242,901 181,897 127,997 — 263,232 573,126 — 573,126 146,335 6,318 390 194,002 347,045 226,081 468,982	268,802 176,786 166,215 1,441 211,187 555,629 — 555,629 165,397 4,292 1,130 175,571 346,390 209,239 478,041	264,588
				207,494 185,846 — 252,583
				645,923
				—
				645,923
				170,936 6,863 592 175,906
				354,297
				291,626
				556,214

— 39 —

APPENDIX I		SUPPLEMENTAL	SUPPLEMENTAL	At 31 March 2006 2005 HK$’000 HK$’000 3,280 4,308 2,867 3,864 320,379 304,706 326,526 312,878 151,515 243,336 93 93 401,886 401,886 241 (31) 48,368 94,353 (294,866) (248,758) (4,207) (4,207) 151,515 243,336 INFORMATION	At 31 March 2006 2005 HK$’000 HK$’000 3,280 4,308 2,867 3,864 320,379 304,706 326,526 312,878 151,515 243,336 93 93 401,886 401,886 241 (31) 48,368 94,353 (294,866) (248,758) (4,207) (4,207) 151,515 243,336 INFORMATION
Non-current liabilities Obligations under finance leases — amount due after one year Other liabilities Retirement benefit obligations Net assets Capital and reserves Share capital Share premium Hedging reserve Translation reserve Accumulated losses Less: common stock shares held in treasury, at cost Total equity attributable to equity holders of Spear & Jackson, Inc.	At 2005 HK$’000 2,625 3,210 334,923 340,758 165,327	30 September 2004 2003 HK$’000 HK$’000 4,869 8,912 4,261 5,009 294,922 226,261 304,052 240,182 206,980 228,800		At 31 2006 HK$’000 3,280 2,867 320,379 326,526 151,515
	93 401,886 (55) 53,245 (285,635) (4,207)	93 401,886 (475) 54,944 (245,261) (4,207)	93 401,886 (117) 37,066 (205,921) (4,207)	93 401,886 241 48,368 (294,866) (4,207)	93 401,886 (31 94,353 (248,758 (4,207
	165,327	206,980	228,800	151,515

— 40 —

SUPPLEMENTAL INFORMATION

APPENDIX I

NOTES TO THE FINANCIAL INFORMATION

FOR EACH OF THE THREE YEARS ENDED 30 SEPTEMBER 2005, 2004 AND 2003 AND EACH OF THE SIX MONTHS ENDED 31 MARCH 2006 AND 2005

1. GENERAL

Spear & Jackson, Inc. (“S&J”) was incorporated in the State of Nevada, the United States of America (“US”) and its shares are traded electronically in the over-the-counter market of the National Association of Securities Dealers of America, in the US. The address of the registered office of S&J as at 10 July 2006 is 401 South LaSalle Street, Suite 201, Chicago, Illinois 60605 and its principal place of business is Atlas Way, Atlas North, Sheffield S4 7QQ, United Kingdom.

S&J and its subsidiaries are engaged in the manufacture and distribution of a broad line of hand tools, lawn and garden tools, industrial magnets and metrology tools.

On 23 March 2006 United Pacific Industries Limited (“UPI”) entered into a stock purchase agreement to acquire 61.8% of S&J and completed the acquisition on 28 July 2006 (the “Acquisition”). As a result of the Acquisition, Directors of UPI are responsible for the preparation of the accompanying consolidated balance sheets of S&J as of 30 September 2005, 30 September 2004, 30 September 2003, 31 March 2006 and 31 March 2005 and the consolidated income statements for each of the three years ended 30 September 2005, 2004, 2003 and each of the six months ended 31 March 2006 and 2005 and notes to the financial information (the “Accompanying Financial Information”), which necessarily include amounts that are based on best estimates and judgments, and in this context, the Directors of UPI have given due consideration to materiality and the accounting policies of S&J.

The Accompanying Financial Information have been prepared solely for the purpose of inclusion in the circular of UPI dated 13 July 2006 in connection with the Acquisition and have been prepared in accordance with the accounting policies which conform with accounting principles generally accepted in Hong Kong (“HK GAAP”).

S&J utilises the United States dollar (“USD”) as the reporting currency for its public filings in the US. The translation of such USD amounts into Hong Kong dollar (“HKD”) amounts presented in the Accompanying Financial Information has been made at the rate of HKD7.79 to USD1.00 for the purpose of illustration only. Such transactions should not be constituted as the representations that HKD amounts would be converted into USD at that rate or any other rate.

— 41 —

SUPPLEMENTAL INFORMATION

APPENDIX I

2. RECONCILIATION OF CONSOLIDATED PROFIT (LOSS) AND NET ASSETS AS PRESENTED HEREIN TO AMOUNTS DERIVED FROM S&J’S FORM 10-K FOR EACH OF THE THREE YEARS ENDED 30 SEPTEMBER 2005, 2004 AND 2003 AND FROM S&J’S FORM 10-Q FOR EACH OF THE SIX MONTHS ENDED 31 MARCH 2006 AND 2005

This footnote has been prepared for informational purposes only, in order to provide a reconciliation of the differences between the financial information presented herein, which has been prepared in accordance with HK GAAP and the amounts which have been derived from S&J’s public filings in the United States, including its Form 10-K and 10-Q (collectively “US Filings”).

Reconciliation of consolidated profit (loss) for the year/period

Consolidated profit (loss) for the year/period as per Form 10-K/10-Q prepared under USGAAP presented in USD Consolidated profit (loss) for the year/period as per Form 10-K/10-Q prepared under USGAAP presented in HKD Add: Changes in retirement benefit expenses as a result of adoption of HKAS 26 “Accounting and reporting by retirement benefit plan” Add: Changes in deferred income tax asset as a result of adjusting the tax effect of changes in retirement benefit obligations during the year/period Profit (loss) for the year/period as per reviewed consolidated income statement prepared under HK GAAP	Years ended 30 September 2005 2004 2003 US$’000 US$’000 US$’000 3,095 436 4,616	Years ended 30 September 2005 2004 2003 US$’000 US$’000 US$’000 3,095 436 4,616	Years ended 30 September 2005 2004 2003 US$’000 US$’000 US$’000 3,095 436 4,616	Six months ended 31 March 2006 2005 US$’000 US$’000 (3,806) 2,546	Six months ended 31 March 2006 2005 US$’000 US$’000 (3,806) 2,546
	HK$’000 24,110 19,093 (5,725)	HK$’000 3,396 (958) 288	HK$’000 35,959 (14,045) 4,206	HK$’000 (29,649) 25,504 (3,816)	HK$’000 19,833 9,605 (2,882)
	37,478	2,726	26,120	(7,961)	26,556

— 42 —

SUPPLEMENTAL INFORMATION

APPENDIX I

Reconciliation of net assets

Net assets as per Form 10-K/10-Q prepared under USGAAP presented in USD Net assets as per Form 10-K/10-Q prepared under USGAAP presented in HKD Add: Changes in retirement benefit obligations as a result of adoption of HKAS 26 “Accounting and reporting by retirement benefit plan” Add: Changes in deferred income tax asset as a result of adjusting the tax effect of changes in retirement benefit obligations during the year/period Net assets as per reviewed consolidated balance sheet prepared under HK GAAP	At 2005 US$’000 26,203 HK$’000 204,121 (55,052) 16,258 165,327	30 September 2004 2003 US$’000 US$’000 29,439 31,852 HK$’000 HK$’000 229,330 248,127 (32,422) (28,161) 10,072 8,834 206,980 228,800	At 31 March 2006 2005 US$’000 US$’000 21,738 33,390 HK$’000 HK$’000 169,339 260,108 (28,706) (24,476) 10,882 7,704 151,515 243,336	At 31 March 2006 2005 US$’000 US$’000 21,738 33,390 HK$’000 HK$’000 169,339 260,108 (28,706) (24,476) 10,882 7,704 151,515 243,336
				HK$’000 260,108 (24,476) 7,704
				243,336

— 43 —

SUPPLEMENTAL INFORMATION

APPENDIX I

7. REVIEW REPORT BY THE COMPANY’S AUDITORS

The following is the text of a review report, prepared for the sole purpose of inclusion in this Supplemental Circular, by the Company’s reporting accountants, Deloitte Touche Tohmatsu, in respect of the consolidated income statements and consolidated balance sheets of Spear & Jackson, Inc. for each of the three years ended 30 September 2003, 2004 and 2005 and for each of the six months ended 31 March 2005 and 2006 prepared under HK GAAP, together with a reconciliation of equity and profits attributable to shareholders from U.S. GAAP figures to HK GAAP figures.

==> picture [72 x 55] intentionally omitted <==

==> picture [78 x 33] intentionally omitted <==

The Board of Directors United Pacific Industries Limited Suite 27-05/06, 27/F. Vicwood Plaza 199 Des Voeux Road Central Hong Kong

30 September 2006

Dear Sirs,

REVIEW REPORT AND ACCOMPANYING FINANCIAL INFORMATION FOR THE THREE YEARS ENDED 30 SEPTEMBER 2003, 2004 AND 2005 AND THE SIX MONTHS ENDED 31 MARCH 2005 AND 2006

REVIEW REPORT

TO THE DIRECTORS OF UNITED PACIFIC INDUSTRIES LIMITED

We have reviewed the accompanying consolidated balance sheets of Spear & Jackson, Inc. as of 30 September 2005, 30 September 2004, 30 September 2003, 31 March 2006 and 31 March 2005 and the consolidated income statements for each of the three years ended 30 September 2005, 2004, 2003 and each of the six months ended 31 March 2006 and 2005 and notes to the financial information on pages 38 to 43 (the “Accompanying Financial Information”) which have been prepared on the basis and for the purpose set out in note 1. The Accompanying Financial Information is the responsibility of the directors of United Pacific Industries Limited. Our responsibility is to issue a report on the Accompanying Financial Information based on our review. This report is made solely to you, as a body, in accordance with our agreed terms of engagement and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

— 44 —

SUPPLEMENTAL INFORMATION

APPENDIX I

We conducted our review in accordance with the Hong Kong Standard on Review Engagements 2400 “Engagements to Review Financial Statements” issued by the Hong Kong Institute of Certified Public Accountants. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial information is free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provides less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

On the basis of our review which does not constitute an audit, we are not aware of any material modification that should be made to the Accompanying Financial Information.

Deloitte Touche Tohmatsu Certified Public Accountants

— 45 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma financial information of the Enlarged Group has been prepared based on the audited financial statements of the UPI Group for the year ended 31 March 2006 and the financial information of the S&J Group for the year ended 30 September 2005 extracted from the review report of the S&J Group as set out in Appendix I of the circular (the “Circular”) of the Company dated 30 September 2006 and adjusted for the transaction resulting from the very substantial acquisition of a controlling interest in Spear & Jackson, Inc. by the UPI Group (the “Acquisition”). The financial information of the S&J Group is translated from US dollar to HK dollar at the rate of US$1 to HK$7.79.

— 46 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

1. UNAUDITED PRO FORMA INCOME STATEMENT OF THE ENLARGED GROUP

FOR THE YEAR ENDED 31 MARCH 2006

The following unaudited pro forma income statement of the Enlarged Group has been prepared based on the audited consolidated income statement of the UPI Group for the year ended 31 March 2006 and the unaudited consolidated income statement of the S&J Group for the year ended 30 September 2005 extracted from the review report of the S&J Group as set out in Appendix I of the Circular by assuming that the Acquisition had been completed on 1 April 2005 for the purpose of illustrating how the Acquisition might have affected the results of the UPI Group.

The unaudited pro forma income statement is prepared to provide financial information on the Enlarged Group as a result of completion of the Acquisition. As it is prepared for illustrative purpose only, it may not purport to represent what the results of the Enlarged Group for the year ended 31 March 2006 or any future period shall be.

The UPI Group HK$’000 454,339 (392,599)	The S&J Group Combined total Pro forma adjustments HK$’000 HK$’000 HK$’000 Note 1 HK$’000 Note 2 784,437 1,238,776 (525,536) (918,135)	The S&J Group Combined total Pro forma adjustments HK$’000 HK$’000 HK$’000 Note 1 HK$’000 Note 2 784,437 1,238,776 (525,536) (918,135)	The Enlarged Group HK$’000 1,238,776 (918,135)
61,740 2,482 (3,139) (40,043) 1,000 — — — (2,028) 20,012 (4,358) 15,654	258,901 5,188 (179,933) (46,755) — 25,543 — (8,655) (2,462) 51,827 (9,371) 42,456	320,641 7,670 (183,072) (86,798) 1,000 25,543 — — 47,949 (8,655) (4,490) 71,839 (13,729) 58,110	320,641 7,670 (183,072) (86,798) 1,000 25,543 47,949 (8,655) (4,490)
			119,788 (13,729)
			106,059

— 47 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

						The
	The UPI	The S&J	Combined	Pro	forma	Enlarged
	Group	Group	total	adjustments		Group
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
				Note 1	Note 2
*Discontinued operations:*
Loss from discontinued operations	—	(1,270)	(1,270)			(1,270)
Provision for losses on disposal of
discontinued operations	—	(3,708)	(3,708)			(3,708)
Loss for the year from discontinued
operations	—	(4,978)	(4,978)			(4,978)
Profit for the year	15,654	37,478	53,132			101,081
Attributable to:
Equity holders of the Company	15,654	37,478	53,132	(14,317)	47,949	86,764
Minority interests	—	—	—	14,317		14,317
	15,654	37,478	53,132			101,081

Note:

(1) The adjustment reflects the allocation of the profit attributable to the 38.2% minority interest of the S&J Group for the period.
(2) The adjustment reflects the discount on the Acquisition recognized as if the Acquisition had been completed on 1 April 2005.

— 48 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

2. UNAUDITED PRO FORMA BALANCE SHEET OF THE ENLARGED GROUP AT 31 MARCH 2006

The following unaudited pro forma balance sheet of the Enlarged Group has been prepared based on the audited consolidated balance sheet of the UPI Group as at 31 March 2006 and the unaudited consolidated balance sheet of the S&J Group as at 30 September 2005 extracted from the review report of the S&J Group as set out in Appendix I of the Circular and adjusted for the transaction resulting from the Acquisition by assuming that the Acquisition had been completed on 31 March 2006 for the purpose of illustrating how the Acquisition might have affected the financial position of the UPI Group.

The unaudited pro forma balance sheet is prepared to provide financial information on the Enlarged Group as a result of completion of the Acquisition. As it is prepared for illustrative purpose only, it may not purport to represent what the financial position of the Enlarged Group shall be on actual completion of the Acquisition.

The UPI Group at 31 March 2006 The S&J Group at 30 September 2005 HK$’000 HK$’000 Non-current assets Property, plant and equipment 36,436 136,855 Prepaid lease payments 668 — Available-for-sale investments — 1,223 Deferred income tax asset — 135,546 37,104 273,624 Current assets Inventories 72,647 194,742 Debtors and prepayments 95,601 138,382 Pledged bank deposits 5,000 — Bank balances and cash 61,959 215,697 235,207 548,821 Current liabilities Creditors and accrued charges (60,216) (146,125) Obligations under finance leases — amount due with one year (1,757) (4,775) Taxation payable (967) (686) Secured bank loans — amount due within one year (29,866) — Bank overdrafts — (164,774) (92,806) (316,360)	The UPI Group at 31 March 2006 The S&J Group at 30 September 2005 HK$’000 HK$’000 Non-current assets Property, plant and equipment 36,436 136,855 Prepaid lease payments 668 — Available-for-sale investments — 1,223 Deferred income tax asset — 135,546 37,104 273,624 Current assets Inventories 72,647 194,742 Debtors and prepayments 95,601 138,382 Pledged bank deposits 5,000 — Bank balances and cash 61,959 215,697 235,207 548,821 Current liabilities Creditors and accrued charges (60,216) (146,125) Obligations under finance leases — amount due with one year (1,757) (4,775) Taxation payable (967) (686) Secured bank loans — amount due within one year (29,866) — Bank overdrafts — (164,774) (92,806) (316,360)	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 173,291 173,291 668 668 1,223 1,223 135,546 135,546	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 173,291 173,291 668 668 1,223 1,223 135,546 135,546
37,104 72,647 95,601 5,000 61,959 235,207 (60,216) (1,757) (967) (29,866) — (92,806)	273,624 194,742 138,382 — 215,697 548,821 (146,125) (4,775) (686) — (164,774) (316,360)	310,728 267,389 233,983 5,000 277,656 (54,223) 784,028 (206,341) (6,532) (1,653) (29,866) (164,774) (409,166)	310,728
			267,389 233,983 5,000 223,433
			729,805
			(206,341) (6,532) (1,653) (29,866) (164,774)
			(409,166)

— 49 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

The UPI Group at 31 March 2006 The S&J Group at 30 September 2005 HK$’000 HK$’000 Net current assets 142,401 232,461 Total assets less current liabilities 179,505 506,085 Non-current liabilities Secured bank loans — amount due after one year (3,088) — Obligations under finance leases — amount due after one year (2,297) (2,625) Deferred tax liability (1,546) — Other liabilities — (3,210) Retirement benefit obligations — (334,923) (6,931) (340,758) Net assets 172,574 165,327 Capital and reserves Share capital 55,706 93 Share premium 13,527 401,886 Share option reserve 353 — Capital redemption reserve 1,442 — Capital reserve 19,870 — Hedging reserve — (55) Translation reserve 1,003 53,245 Accumulated profits (losses) 80,673 (285,635) Less: 6,275,561 common stock shares held in treasury, at cost — (4,207) Total equity attributable to equity holders of the Company 172,574 165,327 Minority interests — — Total equity 172,574 165,327	The UPI Group at 31 March 2006 The S&J Group at 30 September 2005 HK$’000 HK$’000 Net current assets 142,401 232,461 Total assets less current liabilities 179,505 506,085 Non-current liabilities Secured bank loans — amount due after one year (3,088) — Obligations under finance leases — amount due after one year (2,297) (2,625) Deferred tax liability (1,546) — Other liabilities — (3,210) Retirement benefit obligations — (334,923) (6,931) (340,758) Net assets 172,574 165,327 Capital and reserves Share capital 55,706 93 Share premium 13,527 401,886 Share option reserve 353 — Capital redemption reserve 1,442 — Capital reserve 19,870 — Hedging reserve — (55) Translation reserve 1,003 53,245 Accumulated profits (losses) 80,673 (285,635) Less: 6,275,561 common stock shares held in treasury, at cost — (4,207) Total equity attributable to equity holders of the Company 172,574 165,327 Minority interests — — Total equity 172,574 165,327	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 374,862 320,639	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 374,862 320,639
179,505 (3,088) (2,297) (1,546) — — (6,931)	506,085 — (2,625) — (3,210) (334,923) (340,758)	685,590 (3,088) (4,922) (1,546) (3,210) (334,923) (347,689)	631,367
			(3,088 (4,922 (1,546 (3,210 (334,923
			(347,689
172,574	165,327	337,901	283,678
55,706 13,527 353 1,442 19,870 — 1,003 80,673 — 172,574 —	93 401,886 — — — (55) 53,245 (285,635) (4,207) 165,327 —	55,799 (93) 415,413 (401,886) 353 1,442 19,870 (55) 55 54,248 (53,245) (204,962) 333,584 (4,207) 4,207 337,901 — 63,155	55,706 13,527 353 1,442 19,870 — 1,003 128,622 —
			220,523 63,155
172,574	165,327	337,901	283,678

Note:

(1) The adjustment reflect the acquisition of 61.8% equity interest of Spear & Jackson, Inc., with net assets values of approximately HK$102,172,000 after excluding the 38.2% minority interest of approximately HK$63,155,000 as at 30 September 2005, at a consideration of approximately HK$38,643,000 and the estimated transaction cost of approximately HK$15,580,000. The discount on acquisition of approximately HK$47,949,000 is credited to the accumulated profits of the Enlarged Group as if the Acquisition had been completed on 31 March 2006.

— 50 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

3. UNAUDITED PRO FORMA CASH FLOW STATEMENT OF THE ENLARGED GROUP FOR THE YEAR ENDED 31 MARCH 2006

The following unaudited pro forma cash flow statement of the Enlarged Group has been prepared based on the audited consolidated cash flow statement of the UPI Group for the year ended 31 March 2006 and the unaudited consolidated cash flow statement of the S&J Group for the year ended 30 September 2005, assuming that the Acquisition had been completed on 1 April 2005 for the purpose of illustrating how the Acquisition might have affected the cash flows of the UPI Group.

The unaudited pro forma cash flow statement is prepared to provide financial information on the Enlarged Group as a result of completion of the Acquisition. As it is prepared for illustrative purpose only, it may not give a true picture of the cash flows of the Enlarged Group for the year ended 31 March 2006 or any future period.

The UPI Group 2006 The S&J Group 2005 HK$’000 HK$’000 Cash flows from operating activities Profit before taxation from continuing operations 20,012 51,827 Adjustments for: Interest income (1,330) (2,828) Interest on bank borrowings 1,938 1,807 Interest on obligations under finance leases 90 655 (Gain) loss on disposal of property, plant and equipment (307) 47 Depreciation and amortisation of property, plant and equipment 11,463 27,717 Amortisation of prepaid lease payments 17 — Allowance for bad and doubtful debts 641 — Impairment loss on goodwill 629 — Gain arising from changes on fair value of investment properties (1,000) — Gain on sale of land and buildings — (25,543) Share-based payment expenses 250 — Operating cash flows before movements in working capital 32,403 53,682 Increase in inventories (1,063) (27,678) (Decrease) increase in debtors and prepayments (5,065) 16,351 Decrease in creditors and accrued charges (5,587) (16,797) Decrease in retirement benefit obligations — (66,378) Net cash generated from (used in) operations 20,688 (40,820) Hong Kong Profits Tax paid (802) — Other taxation paid (1,597) (1,067) Net cash from (used in) operating activities 18,289 (41,887)	The UPI Group 2006 The S&J Group 2005 HK$’000 HK$’000 Cash flows from operating activities Profit before taxation from continuing operations 20,012 51,827 Adjustments for: Interest income (1,330) (2,828) Interest on bank borrowings 1,938 1,807 Interest on obligations under finance leases 90 655 (Gain) loss on disposal of property, plant and equipment (307) 47 Depreciation and amortisation of property, plant and equipment 11,463 27,717 Amortisation of prepaid lease payments 17 — Allowance for bad and doubtful debts 641 — Impairment loss on goodwill 629 — Gain arising from changes on fair value of investment properties (1,000) — Gain on sale of land and buildings — (25,543) Share-based payment expenses 250 — Operating cash flows before movements in working capital 32,403 53,682 Increase in inventories (1,063) (27,678) (Decrease) increase in debtors and prepayments (5,065) 16,351 Decrease in creditors and accrued charges (5,587) (16,797) Decrease in retirement benefit obligations — (66,378) Net cash generated from (used in) operations 20,688 (40,820) Hong Kong Profits Tax paid (802) — Other taxation paid (1,597) (1,067) Net cash from (used in) operating activities 18,289 (41,887)	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 71,839 71,839 (4,158) (4,158) 3,745 3,745 745 745 (260) (260) 39,180 39,180 17 17 641 641 629 629 (1,000) (1,000) (25,543) (25,543) 250 250	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 71,839 71,839 (4,158) (4,158) 3,745 3,745 745 745 (260) (260) 39,180 39,180 17 17 641 641 629 629 (1,000) (1,000) (25,543) (25,543) 250 250
32,403 (1,063) (5,065) (5,587) — 20,688 (802) (1,597) 18,289	53,682 (27,678) 16,351 (16,797) (66,378) (40,820) — (1,067) (41,887)	86,085 (28,741) 11,286 (22,384) (66,378) (20,132) (802) (2,664) (23,598)	86,085 (28,741) 11,286 (22,384) (66,378)
			(20,132) (802) (2,664)
			(23,598)

— 51 —

APPENDIX II

PRO FORMA FINANCIAL INFORMATION

The UPI Group 2006 The S&J Group 2005 HK$’000 HK$’000 Cash flows from investing activities Purchase of property, plant and equipment (5,814) (10,742) Interest received 1,330 2,828 Increase in pledged bank deposits (5,000) — Proceeds from disposal of property, plant and equipment 11,515 67,586 Purchase of subsidiaries — — Net proceeds received from disposal of investment properties 7,500 — Net cash from investing activities 9,531 59,672 Cash flows from financing activities Principal repayment for obligations under finance leases (893) (3,544) Interest paid on bank borrowings (1,938) (1,807) Interest paid on obligations under finance leases (90) (655) Net cash outflow in trust receipts and export loans (396) — Repayment of bank loans (5,123) — New bank loans raised 7,334 — Net cash used in financing activities (1,106) (6,006) Net increase in cash and cash equivalents 26,714 11,779 Effect of foreign exchange rate changes (28) 23 Cash and cash equivalents at beginning of the year 35,273 39,121 Cash and cash equivalents at end of the year 61,959 50,923 Analysis of the balances of cash and cash equivalents Bank balances and cash 61,959 215,697 Bank overdraft — (164,774) 61,959 50,923	The UPI Group 2006 The S&J Group 2005 HK$’000 HK$’000 Cash flows from investing activities Purchase of property, plant and equipment (5,814) (10,742) Interest received 1,330 2,828 Increase in pledged bank deposits (5,000) — Proceeds from disposal of property, plant and equipment 11,515 67,586 Purchase of subsidiaries — — Net proceeds received from disposal of investment properties 7,500 — Net cash from investing activities 9,531 59,672 Cash flows from financing activities Principal repayment for obligations under finance leases (893) (3,544) Interest paid on bank borrowings (1,938) (1,807) Interest paid on obligations under finance leases (90) (655) Net cash outflow in trust receipts and export loans (396) — Repayment of bank loans (5,123) — New bank loans raised 7,334 — Net cash used in financing activities (1,106) (6,006) Net increase in cash and cash equivalents 26,714 11,779 Effect of foreign exchange rate changes (28) 23 Cash and cash equivalents at beginning of the year 35,273 39,121 Cash and cash equivalents at end of the year 61,959 50,923 Analysis of the balances of cash and cash equivalents Bank balances and cash 61,959 215,697 Bank overdraft — (164,774) 61,959 50,923	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 (16,556) (16,556 4,158 4,158 (5,000) (5,000 79,101 79,101 — (15,079) (15,079 7,500 7,500	Total Pro forma adjustments The Enlarged Group HK$’000 HK$’000 Note 1 HK$’000 (16,556) (16,556 4,158 4,158 (5,000) (5,000 79,101 79,101 — (15,079) (15,079 7,500 7,500
9,531 (893) (1,938) (90) (396) (5,123) 7,334 (1,106) 26,714 (28) 35,273	59,672 (3,544) (1,807) (655) — — — (6,006) 11,779 23 39,121	69,203 (4,437) (3,745) (745) (396) (5,123) 7,334 (7,112) 38,493 (5) (23) 74,394 (39,121)	54,124
			(4,437 (3,745 (745 (396 (5,123 7,334
			(7,112
			23,414 (28 35,273
61,959	50,923	112,882	58,659
61,959 —	215,697 (164,774)	277,656 (54,223) (164,774)	223,433 (164,774
61,959	50,923	112,882	58,659

Notes:

(1) The adjustment reflects the cash flow on acquisition of 61.8% common equity interests of Spear & Jackson, Inc. at a consideration of approximately HK$38,643,000 and the estimated transaction cost of HK$15,580,000.

— 52 —

PRO FORMA FINANCIAL INFORMATION

APPENDIX II

4. ACCOUNTANTS’ REPORT ON PRO FORMA FINANCIAL STATEMENT

The following is the text of a report, prepared for the sole purpose of inclusion in this Supplemental Circular, by the Company’s reporting accountants, Deloitte Touche Tohmatsu, in respect of the unaudited pro forma financial statements of the Enlarged Group as set out in this Appendix.

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==> picture [78 x 34] intentionally omitted <==

The Board of Directors United Pacific Industries Limited Suite 27-05/06, 27/F. Vicwood Plaza 199 Des Voeux Road Central Hong Kong

30 September 2006

Dear Sirs,

ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

TO THE DIRECTORS OF UNITED PACIFIC INDUSTRIES LIMITED

We report on the unaudited pro forma financial information of United Pacific Industries Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “UPI Group”), which has been prepared by the directors of the Company for illustrative purposes only, to provide information about how the very substantial acquisition of a controlling interest in Spear & Jackson, Inc. by the UPI Group (the “Acquisition”) might have affected the financial information presented, for inclusion in Sections 1-3 of Appendix II of the circular of the Company dated 30 September 2006 (the “Circular”). The basis of preparation of the unaudited pro forma financial information of UPI Group and Spear & Jackson, Inc. and its subsidiaries (the “S&J Group”, together with the UPI Group collectively referred to as the “Enlarged Group”) is set out on page 46 to the Circular.

Respective responsibilities of directors of the Company and reporting accountants

It is the responsibility solely of the directors of the Company to prepare the unaudited pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

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PRO FORMA FINANCIAL INFORMATION

APPENDIX II

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the unaudited pro forma financial information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

The unaudited pro forma financial information is for illustrative purposes only, based on the judgements and assumptions of the directors of the Company, and because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the UPI Group as at 31 March 2006 or any future date; or
the results and cash flows of the UPI Group for the year ended 31 March 2006 or any future period.

Opinion

In our opinion:

a) the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated;
b) such basis is consistent with the accounting policies of the Group; and
c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Deloitte Touche Tohmatsu Certified Public Accountants

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PRO FORMA FINANCIAL INFORMATION

APPENDIX II

5. EXPERT AND CONSENT

The following is the qualification of the expert who has been named in this Supplemental Circular or has given opinion or advice which is contained in this Supplemental Circular:

Name

Qualification

Deloitte Touche Tohmatsu (“Deloitte”)

Certified Public Accountants

Deloitte has given and not withdrawn its written consent to the issue of the Supplemental Circular with the inclusion herein of its letters or references to its names, as the case may be, in the form and context in which they respectively appear.

Deloitte did not have any shareholding interest in any member of the Enlarged Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Enlarged Group as at the Latest Practicable Date.

Deloitte does not have any direct or indirect interests in any assets which have been, since 31 March 2006 (being the date to which the latest published audited accounts of UPI were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Enlarged Group.

A copy of the consent letter from Deloitte dated 30 September 2006 is available for inspection at the principal office of UPI in Hong Kong at Suite 2705-06, 27/F., Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong during normal business hours on any business day from the date of this Supplemental Circular up to and including 16 October 2006.

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AI assistant

Richly Field China Development Limited — Proxy Solicitation & Information Statement 2006

49117_rns_2006-10-06_4283a50c-6953-41da-b03b-1a0a2f73e0b5.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

SUPPLEMENTAL CIRCULAR

CONTENTS

DEFINITIONS

(Stock Code: 00176)

VERY SUBSTANTIAL ACQUISITION OF A CONTROLLING INTEREST IN SPEAR & JACKSON, INC.

INTRODUCTION

SUPPLEMENTAL CIRCULAR

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

1.2 Contingent liabilities

1.3 Disclaimer

2. SUFFICIENCY OF WORKING CAPITAL AVAILABLE TO THE ENLARGED GROUP PURSUANT TO APPENDIX 1B(30) OF THE LISTING RULES

3. PARTICULARS OF LITIGATION OF THE ENLARGED GROUP PURSUANT TO APPENDIX 1B(33) OF THE LISTING RULES

4. DISCUSSION AND ANALYSIS OF S&J GROUP PURSUANT TO APPENDIX 16(32) OF THE LISTING RULES

1. For the year ended and as at 30 September 2005

Shareholders’ Equity

Liquidity and Capital Resources

Charge of Assets

Contingent Liabilities

Recent Developments

Review of Performance and Segmental Information

Overview

Segmental Review of Sales

Neill Tools

Eclipse Magnetics

Robert Sorby

Bowers Metrology

S&J France

Australasia

Future Prospects

Significant Disposals

Foreign Exchange Fluctuation Exposures and Hedges

Employee/Stock Options Plan

Pension Plan

2. For the year ended and as at 30 September 2004

Shareholders’ Equity

Capital Structure/Liquidity and Financial Resources

Charge of Assets

Contingent Liabilities

Recent Developments

Review of Performance and Segmental Information

Neill Tools

Eclipse Magnetics

Robert Sorby

Bowers Metrology

S&J France

Australasia

Material Acquisition/Disposals

Future Prospects

Foreign Exchange Fluctuation Exposures and Hedges

Employee/Stock Options Plan

3. For the year ended and as at 30 September 2003

Shareholders’ Equity

Liquidity and Capital Resources

Charge of Assets

Contingent Liabilities

Review of Performance and Segmental Information

Neill Tools

Eclipse Magnetics

Robert Sorby

Bowers Metrology

S&J France

Australasia

Future Prospects

Foreign Exchange Fluctuation Exposures and Hedges

Employee/Stock Options Plan

4. For the period ended and as at 31 March 2006

Shareholders’ Equity

Liquitity and Capital Resources

Charge of Assets

Contingent Liabilities

Review of Performance and Segmental Information

Neill Tools

Eclipse Magnetics

Robert Sorby

Bowers Metrology

Richly Field China Development Limited Proxy Solicitation & Information Statement 2006