Richly Field China Development Limited — Proxy Solicitation & Information Statement 2008

Mar 26, 2008

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 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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Website: www.irasia.com.hk/listco/hk/upi

DISCLOSEABLE TRANSACTION involving the issue of Consideration Shares

ACQUISITION OF JADE PRECISION ENGINEERING PTE LTD

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 3 to 15 of this circular.

20 March 2008

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
**LETTER **	FROM THE BOARD
1.	INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	PRINCIPAL TERMS OF THE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
4.	FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
5.	APPLICATION TO LIST CONSIDERATION SHARES . . . . . . . . . . . . . . . . . . . . . .	8
6.	EFFECT OF THE ISSUE OF CONSIDERATION SHARES ON SHARE CAPITAL
	AND SHAREHOLDING STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
7.	FINANCIAL EFFECTS OF THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . . .	10
8.	REASONS FOR AND BENEFITS OF THE ACQUISITION . . . . . . . . . . . . . . . . . .	12
9.	INFORMATION REGARDING THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . .	13
10.	INFORMATION ON JADE TECHNOLOGIES HOLDINGS LTD . . . . . . . . . . . . . . .	13
11.	INFORMATION ON JADE PRECISION ENGINEERING PTE LTD . . . . . . . . . . . .	14
12.	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX I — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		16

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DEFINITIONS

In this circular, including the appendix, unless the context otherwise requires, the following expressions have the following meanings:

“Acquisition” the proposed acquisition by the Company from JTH of the entire issued share capital of JPE; “Agreement” the sale and purchase agreement dated 6 February 2008 between the Company and JTH in respect of the Acquisition; “Board” the Board of Directors of the Company for the time being; “Buyer” the Company or its wholly-owned nominee; “Closing” the closing of the Acquisition; “Closing Date” Initial closing date on 24 February 2008, with final settlement on such date to be mutually agreed by the parties; “Company” or “UPI” United Pacific Industries Limited, a company incorporated in Bermuda and listed on the Stock Exchange (Stock Code: 00176); “Consideration Shares” the new UPI Shares to be issued by the Company as stock consideration for the Acquisition, in accordance with the provisions of the Agreement; “Directors” the Directors of the Company for the time being; “Hong Kong” Hong Kong, Special Administrative Region of the PRC; “Hong Kong Takeovers Code” the Hong Kong Code on Takeovers and Mergers and Share Repurchases; “JPE” Jade Precision Engineering Pte Ltd, a company incorporated in Singapore (Company Registration No: 1989004581C);

“JPE NTA” net tangible assets of JPE, adjusted to eliminate inter-company balances, as determined and agreed by the parties as at 23 February 2008;

“JPE Shares” ordinary shares without par value in the share capital of JPE; “JTH” or “Seller” Jade Technologies Holdings Ltd., a company incorporated in Singapore (Company Registration No. 198003839Z), and listed on the SGX-ST — Catalist (formerly SESDAQ);

“JTH EGM”

the extraordinary general meeting of JTH to be convened to seek the approval of shareholders for the Acquisition, the Agreement and the transactions contemplated therein;

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	DEFINITIONS
“Latest Practicable Date”	20 March 2008, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein;
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited;
“Mr Beazer”	Mr Brian C Beazer, the Chairman of the Company and of JTH;
“PRC” or “China”	the People’s Republic of China;
“Settlement Date”	the settlement date for the Acquisition to be agreed by the
	parties and expected to be scheduled within 15 business days
	after the conclusion of the JTH EGM but not later than 30
	June 2008;
“SGX-ST”	the Singapore Securities Exchange Trading Limited;
“Shareholders”	the shareholders of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“UPI Group”	UPI, its subsidiaries and associates;
“UPI Shares”	ordinary shares of HK$0.10 each in the share capital of the
	Company;
“HK$”	Hong Kong dollar;
“S$”	Singapore dollar.

For the purpose of illustration only, currency translations in this circular have been made using the following rate of exchange quoted by the Monetary Authority of Singapore as at Friday 22 February 2008, for consistency with the rate used to express the consideration in Hong Kong dollars based on the JPE NTA as at Saturday 23 February 2008:

S$1 = HK$5.54

No representation is made that any amounts in S$ could have been or can be converted at that rate or at any other rate or at all.

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LETTER FROM THE BOARD

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United Pacific Industries Limited (Incorporated in Bermuda with limited liability) (Stock Code: 00176)

Webpage: www.irasia.com.hk/listco/hk/upi

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

Non-executive Director: Teo Ek Tor

Independent non-executive Directors: Dr. Wong Ho Ching, Chris Henry W Lim Ramon Sy Pascual

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

Head Office and Principal Place of Business in Hong Kong: Suite 2705-6, Vicwood Plaza 199 Des Voeux Road Central Hong Kong

20 March 2008

To the Shareholders of the Company

Dear Shareholders,

DISCLOSEABLE TRANSACTION involving the issue of Consideration Shares

ACQUISITION OF JADE PRECISION ENGINEERING PTE LTD

1. INTRODUCTION

The Company issued an announcement dated 14 February 2008 stating that it had entered into an agreement to purchase the entire issued share capital of Jade Precision Engineering Pte Ltd from Jade Technologies Holdings Ltd. The total consideration is now determined to be approximately S$5.9 million (approximately HK$32.7 million), of which approximately S$3.8 million (approximately HK$21.1 million) is consideration due to JTH and approximately S$2.1 million (approximately HK$11.6 million) represents cash liabilities to be assumed by the Company on new assets to be acquired by JPE. The consideration will be paid in stock and cash, without any restrictions on subsequent sale of the Consideration Shares.

The applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules based on the audited results of the Company and JPE for the last financial year ended September 2007, and recalculated based on the JPE NTA as at 23 February 2008, are more than 5% but less than 25%. Consequently, the Acquisition constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

The purpose of this circular is to provide Shareholders further information on the Acquisition and other information as set out in the Appendix to this circular.

2. PRINCIPAL TERMS OF THE AGREEMENT

Date:

The Agreement was signed after the close of trading on 6 February 2008.

Parties:

Seller:

Jade Technologies Holdings Ltd., a company incorporated in Singapore and listed on the Singapore Stock Exchange — Catalist.

Buyer: United Pacific Industries Limited, a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange under Stock Code: 176, or its nominee.

Mr Brian C Beazer, the Chairman of the Company, is also the Chairman of JTH. Mr Beazer has a shareholding of approximately 24.56% in the Company, and less than 2% in JTH. The Acquisition does not constitute a transaction with a connected person within the meaning of the Listing Rules. However, under the Hong Kong Takeovers Code, there is a presumption that JTH and its directors, including Mr Beazer, are parties “acting in concert”, and their interests in UPI Shares will be aggregated.

The Agreement imposes a maximum limit on the number of Consideration Shares that can be issued to JTH as consideration, estimated to be approximately 43 million UPI Shares, in order to avoid triggering a mandatory general offer under the Hong Kong Takeovers Code. Immediately after the Closing, Mr Beazer and JTH are expected to hold approximately 180 million UPI Shares in aggregate, representing less than 30% of the issued shares on an enlarged basis, of which 136,827,775 are held by Mr Beazer and approximately 43 million will be held by JTH.

The Company does not have any prior transactions (other than the Acquisition) with JTH and its ultimate beneficial owners that are required to be aggregated with the Acquisition under Rule 14.22 of the Listing Rules.

Save as otherwise disclosed, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, JTH and the ultimate beneficial owners of JTH are third parties independent of the Company and connected persons of the Company.

The Acquisition

The Company, or its wholly-owned nominee, will purchase the entire issued share capital of JPE from JTH, subject to the terms and conditions of the Agreement.

Consideration

The total purchase consideration is computed based on a 75% discount to the JPE NTA, plus an assumption of cash liabilities by the Company relating to new machinery and new leased plant premises to be acquired by JPE. The consideration will be paid in stock and cash, without any restrictions on subsequent sale of the Consideration Shares.

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LETTER FROM THE BOARD

Conditions Precedent

The Agreement is subject to certain conditions precedent including the following being satisfied or waived by the party entitled to their benefit:

• (i) The adjusted net tangible assets of JPE as at 23 February 2008 shall not fall below S$14 million (approximately HK$77.6 million).

• (ii) The average closing price of UPI Shares from 18-22 February 2008 (both days inclusive) shall not fall below HK$0.45.

• (iii) The consideration shares shall have been approved for listing, and permission to deal in the shares granted, by the Stock Exchange.

• (iv) JTH shall have obtained shareholders’ approval, if necessary.

• (v) The parties shall have obtained regulatory approvals, if necessary.

• (vi) JTH shall have waived all inter-company balances owing by JPE.

• (vii) Bank loans owing by JPE shall be repaid, and the security for such bank loans shall be released.

• (viii) No material adverse change should have affected JPE or UPI.

• (ix) The Closing shall be concluded by 30 June 2008.

• (x) The results of due diligence on JPE shall be satisfactory to the Company at its sole discretion.

As at the Latest Practicable Date, the following conditions precedent have been satisfied or waived:

• The parties have determined that the JPE NTA is S$15,211,449 (approximately HK$84,271,426).

• The Company has agreed a subscription price of HK$0.427 for Consideration Shares and waived the floor price of HK$0.45.

As disclosed in the Company’s announcement dated 29 February 2008, JTH is now required to seek its shareholders’ approval for the disposal of JPE. JTH is in the process of convening an extraordinary general meeting for this purpose. JTH covenanted in the Agreement that if the approval of its shareholders is required, it will procure that its majority shareholders will vote in favour of the

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LETTER FROM THE BOARD

sale of JPE to the Company pursuant to the Agreement. As at the Latest Practicable Date, JTH has obtained the irrevocable undertaking in writing of its shareholders with a majority of voting rights to vote in favour of the disposal of JPE pursuant to the Agreement. The Company will issue an announcement in due course to update Shareholders on the results of the JTH EGM.

Save as otherwise disclosed, none of the other conditions precedent have been satisfied or waived by the parties entitled to the benefit thereof.

Covenants

JTH has agreed to observe certain covenants summarized below:

• (i) The business of JPE shall be conducted in the ordinary course.

• (ii) JPE shall not create encumbrances over its assets except in the ordinary course of business.

• (iii) If the approval of shareholders of JTH is required, it will procure that its majority shareholders will vote in favour.

• (iv) JTH shall procure the repayment of JPE’s bank loans, and the release of security over JPE Shares and JPE’s assets.

• (v) There will be no change in the share capital of JPE.

• (vi) No dividends of distributions will be made by JPE.

• (vii) Insurance over JPE’s properties will be maintained at the usual level.

• (viii) Any tax liabilities attributable to, or arising from, the sale of JPE Shares and transactions contemplated in the Agreement, will be the liability of JTH up to the limit of the purchase consideration received by JTH except for stamp duty on the transfer of JPE Shares which will be borne by the Company.

• (ix) JTH will notify the Company of any material change affecting JPE.

• (x) JTH will maintain a guarantee to secure power supplies for JPE post-Closing until the Company has had reasonable opportunity to replace the guarantee.

Tax Indemnity: JTH has agreed to indemnify the Company against certain tax liabilities, if any, associated with the transactions contemplated in the Agreement.

Closing: Pursuant to the Agreement, the Company has taken over financial and management control of JPE with effect from the Closing Date on 24 February 2008. Subject to formal approval by shareholders at the JTH EGM, the Acquisition is expected to be consummated within 15 business days after the conclusion of the JTH EGM but not later than 30 June 2008.

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LETTER FROM THE BOARD

Termination: The Agreement may be terminated by mutual agreement, or by either party if the Closing is not concluded by 30 June 2008. The Agreement may also be terminated by either party if certain conditions precedent to their obligation to effect the Closing are not fulfilled and are not waived by them, or if the other party is in breach. In the event of termination by breach, the non-breaching party is entitled to recover damages and certain transaction expenses from the breaching party.

Costs and expenses: Each party bears its own costs and expenses.

3. CONSIDERATION

The total purchase consideration has been determined to be approximately S$5.9 million (approximately HK$32.7 million), of which approximately S$3.8 million (approximately HK$21.1 million) is computed as the JPE NTA less a 75% discount, and approximately S$2.1 million (approximately HK$11.6 million) represents cash liabilities to be assumed by the Company for a new plant and a new lease of plant premises to be acquired by JPE.

As provided in the Agreement, the parties are required to determine and agree the JPE NTA as at 23 February 2008, the end of JPE’s February 2008 accounting period, adjusted by eliminating the agreed outstanding inter-company balances owing by JPE which will be waived by JTH and its subsidiaries.

The Agreement further provides that the number of Consideration Shares (up to the maximum limit) will be calculated by expressing the consideration in Hong Kong dollars at the exchange rate prevailing on 23 February 2008, and dividing the amount obtained by the average closing share price of UPI Shares over 5 consecutive trading days from 18-22 February 2008, both days inclusive provided that if the average share price falls below HK$0.45, the Company has the option not to proceed with the Closing. Any shortfall, if any, resulting from the cap on the issue of Consideration Shares will be paid in cash.

The maximum limit on Consideration Shares to be issued to JTH is to ensure that the combined shareholdings in the Company of Mr Beazer and JTH after the Closing will be less than 30% of the issued Shares of the Company on an enlarged basis, in order to avoid triggering a mandatory general offer under the Hong Kong Takeovers Code.

On 6 March 2008, the parties agreed the following:

1. For all purposes related to consideration issues, the applicable exchange rate of the Singapore dollar and Hong Kong dollar is the rate established by the Monetary Authority of Singapore as at Friday 22 February 2008 of HK$5.54 for each Singapore dollar.

2. The JPE NTA is S$15,211,449 (approximately HK$84,271,426). The total assets of JPE as at 23 February 2008 are approximately S$26.2 million (approximately HK$145.2 million), and total liabilities are approximately S$26.9 million (approximately HK$149.3 million,

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LETTER FROM THE BOARD

which includes net intercompany balances owing by JPE of approximately S$15.9 million (approximately HK$88.4 million). The elimination of these intercompany balances results in JPE’s net tangible assets increasing to S$15,211,449 (approximately HK$84,271,426), which is the basis on which consideration at a 75% discount to NTA is derived.

1. The consideration, at a 75% discount to the JPE NTA, is S$3,802,862 (approximately HK$21,067,856).

2. The average closing price of UPI Shares over the price-fixing period is HK$0.427. The Company has waived the floor price of HK$0.45 and has agreed to apply the price of HK$0.427 to determine the number of Consideration Shares to be issued (up to the maximum limit).

3. Based on the foregoing determinations, the number of Consideration Shares to be issued to JTH is 42,941,600 UPI Shares (valued at HK$18,336,063 at HK$0.427 per share), which is approximately 7.7% of the existing issued share capital of 557,058,400 shares, or approximately 7.2% of the enlarged issued share capital of 600,000,000 shares.

4. The cash shortfall payable to JTH is therefore S$493,103 (approximately HK$2,731,793).

5. The cash liabilities to be assumed by the Company for a new plant and a new lease of plant premises to be acquired by JPE are approximately S$2.1 million (approximately HK$11.6 million).

4. FINANCING

The cash shortfall of S$493,103 (approximately HK$2,731,793) for the Acquisition will be financed from internal resources and the Company intends to obtain bank borrowings to finance approximately S$2.1 million (approximately HK$11.6 million) required for the new plant and new lease of plant premises, to be secured on the assets to be acquired.

5. APPLICATION TO LIST CONSIDERATION SHARES

Subject to satisfaction or waiver of conditions precedent, the Company will apply to the Stock Exchange to list, and for permission to deal in, the 42,941,600 new UPI Shares to be issued as Consideration Shares.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the Consideration Shares.

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LETTER FROM THE BOARD

6. EFFECT OF THE ISSUE OF CONSIDERATION SHARES ON SHARE CAPITAL AND SHAREHOLDING STRUCTURE

The Company has only one class of ordinary shares of par value HK$0.10 per share. There are no founder or management or deferred shares in the share capital of the Company. There has not been any alterations in the share capital of any member of the UPI Group since the date to which the latest published audited accounts of the Company were made up.

The Consideration Shares will be deemed fully paid up on issue. They will be issued pursuant to the Board’s general mandate to issue shares up to 20% of the existing issued share capital, and will rank pari passu with all other issued ordinary shares of the Company, without any restrictions on subsequent sales. The issue of Consideration Shares will not affect the rights of existing Shareholders, nor will it affect a change of control of the Company.

The table below provides details of the Company’s authorized and issued share capital as at 30 September 2007, the end of the latest financial year, and as at the Latest Practicable Date, as well as the change in the issued capital on the issue to JTH of 42,941,600 Consideration Shares.

Share Capital of the Company

	Number of Shares	Amount
		HK$
Authorised
As at 30 Sept 2007 and as at the Latest Practicable Date	1,000,000,000	100,000,000
Issued and fully paid up
As at 30 Sept 2007 and as at the Latest Practicable Date	557,058,400	55,705,840
Consideration Shares to be issued	42,941,600	4,294,160
After issue of Consideration Shares	600,000,000	60,000,000

The table below illustrates the changes in shareholding that will result after the issue of the Consideration Shares, and the shareholdings on a fully diluted basis if outstanding options granted to directors and employees of the Company are exercised to subscribe for UPI Shares. As at the Latest Practicable Date, there are no other convertible securities of the Company.

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LETTER FROM THE BOARD

Shareholding Structure of the Company

Shareholders Brian C Beazer(1) JTH(2) Subtotal David H Clarke(3) Investor AB(4) Public Shareholders TOTAL	Before issue of Consideration Shares Shares Approximate % 136,827,775 24.56% 0 136,827,775 24.56% 127,439,723 22.88% 74,836,000 13.43% 217,954,902 39.13% 557,058,400 100.00%	After issue of Consideration Shares Shares Approximate % 136,827,775 22.80% 42,941,600 7.17% 179,769,375 29.97% 127,439,723 21.24% 74,836,000 12.47% 217,954,902 36.32% 600,000,000 100.00%	After issue of Consideration Shares and options Options Total Approximate % 5,031,053 141,858,828 22.93% — 42,941,600 6.94% 5,031,053 184,800,428 29.88% 1,515,527 128,955,250 20.84% — 74,836,000 12.10% 12,093,156 230,048,058 37.18% 18,639,736 618,639,736 100.00%	After issue of Consideration Shares and options Options Total Approximate % 5,031,053 141,858,828 22.93% — 42,941,600 6.94% 5,031,053 184,800,428 29.88% 1,515,527 128,955,250 20.84% — 74,836,000 12.10% 12,093,156 230,048,058 37.18% 18,639,736 618,639,736 100.00%
				29.88% 20.84% 12.10% 37.18%
				100.00%

Notes:

1. Mr Brian C Beazer is the beneficial owner of 400,000 shares held through a nominee bank, and 136,427,775 shares are held by B C Beazer Asia Pte. Ltd., a company in which Mr. Beazer has a 50% equity interest.

2. The shareholdings of JTH and Mr Beazer are aggregated to show that immediately post-Closing, they will hold less than 30% of the issued shares of the Company on an enlarged basis. However, post-Closing, JTH will be considered a public shareholder. Therefore the total shareholding in public hands after the issue of Consideration Shares is estimated at approximately 261 million shares, representing approximately 43% of the issued shares as enlarged by the issue of Consideration Shares to JTH, and after the issue of Consideration Shares and new UPI Shares issued on exercise of options, the total shareholding in public hands is estimated at approximately 273 million, representing approximately 44% of the issued Shares on an enlarged basis.

3. These shares are held by GSB Holdings, Inc (“GSBH”). Mr. David H Clarke has a controlling 61.4% equity interest in Great South Beach Improvement Co., which has a beneficial interest in the entire issued share capital of GSBH.

4. These shares are held indirectly by Investor AB through its beneficial interest of the entire issued capital of Investor (Guernsey) II Ltd.

7. FINANCIAL EFFECTS OF THE ACQUISITION

After the Closing, JPE will become a wholly-owned subsidiary of the UPI Group, the results of which will be consolidated into the UPI Group’s financial statements. The issue of Consideration Shares will not affect the rights of existing Shareholders.

(a) Assets

The Acquisition of JPE NTA of approximately HK$84.27 million, at a discount of 75%, is to be settled by the issue of Consideration Shares (approximately HK$18.34 million) with the remaining HK$2.73 million being settled in cash. Before the inclusion of any fair value adjustments post-Closing which may be significant, and any legal and other costs relating to the Acquisition, the Acquisition is therefore expected to increase the total assets of the UPI Group by approximately HK$154 million

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LETTER FROM THE BOARD

comprising the total assets of JPE of approximately HK$145 million plus approximately HK$11.6 million for the new machinery and plant premises to be acquired by JPE less the cash consideration of approximately HK$2.7 million payable by the Company to JTH. Consequently, the total assets of the UPI Group are expected to increase from approximately HK$1,063 million as at 30 September 2007 (based on the Company’s audited balance sheet as at the latest financial year end) to approximately HK$1,217 million) while net assets are expected to increase by approximately HK$81 million from approximately HK$337 million as at 30 September 2007 (based on the Company’s audited balance sheet as at the latest financial year end) to approximately HK$418 million.

On the foregoing assumptions, the net asset value per each UPI Share could increase by approximately 15% from HK$0.61 per share based on 557,058,400 existing shares to an estimated HK$0.70 per share on an enlarged share basis of 600,000,000 shares. These figures are based on the value of the JPE NTA acquired and include neither fair value adjustments post-Closing, which may be significant, nor any legal and other costs relating to the Acquisition.

(b) Earnings

The Directors consider that, in the long term, the Acquisition will enlarge the earnings base of the UPI Group but this is dependent, however, upon JPE returning to profitability under new management.

(c) Liabilities

The total liabilities of JPE as at 23 February 2008 were approximately HK$149 million. The Acquisition will result in the UPI Group assuming the total liabilities of JPE less the elimination of intercompany balances of approximately HK$88 million owing by JPE to JTH and its subsidiaries plus approximately HK$11.6 million on assumption of cash liabilities for the new machinery and plant premises to be acquired by JPE, resulting in approximately HK$73 million in new liabilities.

Before the inclusion of any fair value adjustments post-Closing which may be significant, and any legal and other costs relating to the Acquisition, the Acquisition is expected to increase the total liabilities of the UPI Group by approximately HK$73 million, from approximately HK$726 million as at 30 September 2007 (based on the Company’s audited balance sheet as at the latest financial year end) to approximately HK$799 million. The increase in total assets of approximately HK$154 million, offset against the increase in total liabilities of approximately HK$73 million, results in a net increase in assets from the Acquisition of approximately HK$81 million.

The net liabilities of the UPI Group are not expected to increase significantly as a result of the Acquisition. The additional consideration of approximately S$2.1 million (approximately HK$11.6 million) to be paid by the UPI Group is in relation to the purchase of plant and machinery and a new lease of land and buildings to be acquired by JPE at fair value. Additionally, the consideration for the purchase of the JPE NTA at a discount of 75% is payable principally in Consideration Shares plus a small settlement in cash of S$493,103 (approximately HK$2,731,793).

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LETTER FROM THE BOARD

(d) Discount on acquisition

Prior to the consideration of fair value adjustments post-Closing, which may be significant, and any legal and other costs, based on the agreed JPE NTA of S$15,211,449 (approximately HK$84,271,426) the Company may realize a discount on acquisition of up to approximately S$11,408,587 (approximately HK$63,203,570). Any discount on acquisition will be an accretion to earnings of the UPI Group in the financial year in which the discount is recognized, and will increase earnings in that period accordingly.

Shareholders and potential investors are advised to exercise caution in dealing in the shares of the Company as there is no certainty that the Acquisition will be completed, or that it will result in an increase in shareholders’ funds in the long term, or that JPE will become profitable.

8. REASONS FOR AND BENEFITS OF THE ACQUISITION

JPE is a long-established Singapore-based manufacturer of high-precision stamped, etched and plated integrated circuit leadframes for the semiconductor industry. Its customers include global leaders in the electronics field.

Since 2007, Pantene Industrial Co. Ltd, a wholly-owned subsidiary of the Company, has been JPE’s strategic partner in China for the manufacturing of high-precision stamped leadframes. JPE has already re-located six stamping machines to Pantene’s premises in China while retaining environmentally-sensitive etched and plating operations in Singapore.

The Agreement and the consideration were negotiated on an arm’s length basis and on normal commercial terms, having regard to a number of factors, principally, the fact that JPE has been operating at a loss since 2001, and JPE’s leadframe operations have ceased to be the core business focus of JTH which has changed its business strategy from manufacturing to investments and operations relating to real estate, commodities and energy resources, among others.

Additionally, the Board is of the view that the Acquisition is beneficial to the UPI Group strategically, operationally and financially as the Board holds positive views of the business prospects of JPE under new ownership and new management. Although JPE has been loss making since 2001, the Company believes JPE is capable of improved results as the Company believes JPE will benefit from the UPI Group’s lower-cost structure, the attendant advantages of operating within a larger manufacturing environment which offers economies of scale leading to a reduction in overheads, and other operational synergies in areas such as inventory management and control in relation to copper and other metals in common use, sharing of key management and other resources. However, there can be no assurance that JPE will become profitable.

The Acquisition will add diversity and depth to the UPI Group’s metal stamping operations and enhance the UPI Group’s competitiveness as a contract manufacturer of electronic/electrical components, and metal stamped parts which include leadframes. It will afford the UPI Group the opportunity to advance more rapidly into high-precision engineering work. In addition, the new range of leadframe products will provide further opportunities for the UPI Group to penetrate new markets, especially in China.

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LETTER FROM THE BOARD

The Acquisition will also broaden the income base of the UPI Group. As such, the Directors, having taken into consideration the risks and potential benefits associated with the Acquisition, are of the view that the Acquisition is on normal commercial terms which are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

9. INFORMATION REGARDING THE COMPANY

The Company is a diversified investment holding company. Its principal subsidiaries are engaged in a diverse range of business operations broadly categorized as follows:

Contract Manufacturing Division

This division is principally engaged in the design, production and sale of electronic and electrical products to serve consumer, business and industrial needs, and also provides OEM services. Its core product range includes voltage converters, cables, coils and components for electronic/electrical/mechanical products, chargers and rechargeable battery products.

Tools Division

The tools division procures, manufactures, distributes and sells hand hacksaws, hacksaws blades, hacksaw frames, builders’ tools, riveter guns, wood saws and lawn, garden and agricultural tools.

Metrology/Measurement Division

This division is engaged in the design, manufacturing and distribution of precision measuring instruments for the Automotive, Aerospace and Defence markets.

Magnetics Division

This divison has a rich history of leading edge innovation in magnetic tool technology. Its key products are permanent magnets (cast alloy), magnetic tools, magnetic chucks and turnkey magnetic systems.

10. INFORMATION ON JADE TECHNOLOGIES HOLDINGS LTD

Jade Technologies Holdings Ltd., a company incorporated in Singapore (Company Registration No. 198003839Z), has been listed since 1997 on the Singapore Stock Exchange — Catalist (formerly SESDAQ). Formerly “Jade Technologies Singapore Ltd’, JTH came under new majority ownership in May 2007, and was renamed to reflect the new focus of the Jade group of companies on international businesses.

JTH is a holding company. Jade Precision Engineering Pte Ltd, its wholly-owned subsidiary, manufactures leadframes which were previously the core focus of JTH’s operations. Jade Commodities & Resources Pte. Ltd, one of JTH’s wholly-owned subsidiaries, formerly designed, fabricated and

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LETTER FROM THE BOARD

serviced integrated circuit encapsulation molds for the semiconductor industry, but ceased manufacturing operations in July 2006, and has now turned its business focus to investing and trading in commodities. Other recently incorporated subsidiaries will focus on real estate development and management, marketing and distribution, and fund raising activities.

The proposed disposal of JPE, a subsidiary which JTH no longer considers part of its primary business focus, will enable the Jade group of companies to streamline its operations to advance new business strategies.

11. INFORMATION ON JADE PRECISION ENGINEERING PTE LTD

Jade Precision Engineering Pte Ltd (“JPE”) is a company incorporated in Singapore (Company Registration No: 1989004581C). The principal activities of JPE are the manufacture and sale of stamped, etched and plated leadframes for the semiconductor industry.

JPE had annual sales of S$35 million (approximately HK$194 million) in 2007 but, had accumulated losses of S$21 million (approximately HK$116 million) as at 29 September 2007 (JPE’s latest audited financial year end). JPE has suffered from high metal prices, such as copper (representing approximately 40% of JPE’s costs), which, in the last 5 years, has risen from a low of US$1,600 a metric ton to US$9,000 a metric ton at its highest.

The following table sets out the net losses (both before and after taxation and extraordinary items) attributable to the assets of JPE, based on audited financial information of JPE, prepared according to Singapore Financial Reporting Standards, in respect of each of its two most recent fiscal years ended 30 September 2006 and 29 September 2007. The information is extracted from the most recent annual report of JPE in respect of its last financial year ended 29 September 2007.

			For year ended	For year ended
			29 September	30 September
			2007	2006
			S$’000	S$’000
Net	(Loss)	before taxation and extraordinary items	(3,063)	(797)
			(approximately	(approximately
			(HK$16.969	(HK$4.415
			million))	million))
Net	(Loss)	after taxation and extraordinary items	(3,063)	(797)
			(approximately	(approximately
			(HK$16.969	(HK$4.415
			million))	million))

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LETTER FROM THE BOARD

12. GENERAL INFORMATION

Your attention is also drawn to the general information set out in the appendix to this circular.

By order of the Board United Pacific Industries Limited Brian C Beazer

Executive Chairman

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GENERAL INFORMATION

APPENDIX I

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular, and confirm, having made all reasonable enquiries, to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

Save as disclosed below, as at the Latest Practicable Date, none of the Directors and chief executive (if any) of the Company had interests or short positions in the shares, underlying shares or debentures of the Company and its associated companies (within the meaning of Part XV of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“SFO”) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or were deemed to have under the provisions of the SFO), or (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange (together, “Discloseable Interests”):

(i) Long position in the issued shares of the Company

		Capacity in which	Capacity in which	Number of	Percentage of
**Name **	of Director	**the Shares **	are held	issued Shares	issued Shares
Brian	C Beazer	Beneficial owner		400,000
		Interest of		136,427,775
		controlled
		corporation(1)
		Total:		136,827,775	24.56%
David	H Clarke	Interest of		127,439,723	22.88%
		controlled
		corporation	(2)
Simon	N Hsu	Interest of		3,787,158	0.68%
		controlled
		corporation	(3)

Notes:

(1) B C Beazer Asia Pte Ltd, a company in which Mr Beazer has 50% shareholding interest, holds 136,427,775 shares.

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GENERAL INFORMATION

APPENDIX I

• (2) All these shares are held by GSB Holdings, Inc, a wholly-owned subsidiary of Great South Beach Improvement Co., in which Mr. Clarke has 61.4% shareholding interest.

• (3) All these shares are held by Strategic Planning Assets Limited which is wholly-owned by Mr Hsu.

(ii) Long position in underlying shares of the Company

As at the Latest Practicable Date, the following Directors held outstanding share options granted under the share option scheme adopted by the Company in April 1994 entitling them to subscribe for such numbers of Shares as set out below:

			Number of Option
			Shares Outstanding
		Exercise Price	as at the Latest
Name of Director	Date of Grant	(HK$)	Practicable Date
Mr. Brian C Beazer	23 July 2003	0.36	2,000,000
Mr. Simon N Hsu	23 July 2003	0.36	3,000,000
		Total	5,000,000

As at the Latest Practicable Date, the following Directors held outstanding share options granted under the share option scheme adopted by the Company on 30 August 2004 entitling them to subscribe for such numbers of Shares as set out below:

			Number of Option
			Shares Outstanding
		Exercise Price	as at the Latest
Name of Director	Date of Grant	(HK$)	Practicable Date
Mr. Brian C Beazer	28 September 2004	0.242	1,638,407
	20 December 2004	0.250	1,392,646
Mr. David H Clarke	28 September 2004	0.242	819,204
	20 December 2004	0.250	696,323
Mr. Simon N Hsu	28 September 2004	0.242	3,276,814
	20 December 2004	0.250	2,785,292
		Total	10,608,686

Save as disclosed above, none of the Directors had any Discloseable Interests as at the Latest Practicable Date.

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GENERAL INFORMATION

APPENDIX I

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES

Save as disclosed below, as at the Latest Practicable Date, according to the register of interests kept by the Company pursuant to Section 336 of the SFO, and so far as was known to any Director or chief executive (if any) of the Company, no person other than a Director (as disclosed in paragraph (2) above) or chief executive (if any) of the Company or a member of the UPI Group, had any interest or short position in the shares or the underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the UPI Group, together with particulars of any options in respect of such capital:

Number of underlying ordinary shares Number of in the Company ordinary shares held under in the Company equity Total number of Percentage of held and derivatives and ordinary shares shareholding to Name of capacity in capacity in in the Company total issued Substantial which they are which they are held (long share capital of Shareholder held held position) the Company 74,836,000 Investor AB[(1)] (beneficial owner) Nil 74,836,000 13.43%

Note:

1. These shares are held indirectly by Investor AB through its beneficial interest of the entire issued capital of Investor (Guernsey) II Ltd.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the UPI Group since 30 September 2007, the date to which the latest audited consolidated financial statements of the UPI Group were made up.

5. LITIGATION

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.

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GENERAL INFORMATION

APPENDIX I

6. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any of its subsidiaries, excluding contracts that can be terminated by the Company within one year without payment of compensation other than statutory compensation.

7. COMPETING INTERESTS

• (a) As at the Latest Practicable Date, none of the Directors or their associates had any direct or indirect interest in any assets which have been, since 30 September 2007 (being the date to which the latest published audited consolidated financial statements of the UPI Group were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the UPI Group.

• (b) As at the Latest Practicable Date, none of the Directors or their associates was materially interested in any contract or arrangement entered into by any member of the UPI Group and subsisting at the date of this circular which was significant in relation to the business of the UPI Group.

• (c) As at the Latest Practicable Date, none of the Directors or their associates had any interests in a business, apart from the business of the UPI Group, which competes or is likely to compete, either directly or indirectly, with the business of the UPI Group.

8. GENERAL

• (a) The transfer office and branch share registrar of the Company in Hong Kong is Secretaries Limited, located at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (b) The company secretary and qualified accountant of the Company is Nathaniel Wong. He is a qualified member of the Hong Kong Institute of Certified Public Accountants.

9. LANGUAGE

In the event of inconsistency, the English text of this circular will prevail over the Chinese text.

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