Sinopec Engineering Group Co Ltd. — Proxy Solicitation & Information Statement 2006

Oct 11, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Universe International Holdings Limited you should at once hand this circular to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the same 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.

UNIVERSE INTERNATIONAL HOLDINGS LIMITED ���������� [*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1046)

MAJOR TRANSACTION

SALE OF PROPERTY

11 October 2006

* for identification purposes only

CONTENTS

		Page
Definitions	......................................................................................................................................	1
Letter from the Board
1.	Introduction ................................................................................................................	3
2.	S&P Agreement .........................................................................................................	4
3.	Financial Effect of the Sale .......................................................................................	6
4.	Reasons for and Benefits of the Sale ........................................................................	6
5.	Use of Sale Proceeds .................................................................................................	7
6.	General .......................................................................................................................	7
7.	Additional Information ..............................................................................................	7
Appendix I	Financial Information on the Group...........................................................	8
Appendix II Property Valuation ........................................................................................		10
Appendix III General Information......................................................................................		15

– i –

DEFINITIONS

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

• “associate(s)” has the meaning ascribed thereto under the Listing Rules “BMI Appraisals” BMI Appraisals Limited, an independent firm of qualified professional valuers

• “Board” the board of Directors

• “Companies Ordinance” Companies Ordinance, Chapter 32 of the Laws of Hong Kong “Company” Universe International Holdings Limited, a company incorporated in Bermuda with limited liability and the Shares are listed on the Stock Exchange

• “Connected Person(s)” has the meaning ascribed to it under the Listing Rules “Consideration” HK$31,125,870, the consideration for the Sale “Director(s)” director(s) of the Company “Globalcrest” Globalcrest Enterprises Limited, a company incorporated in the British Virgin Islands with limited liability and a substantial shareholder of the Company within the meaning of the Listing Rules

• “Group” the Company and its subsidiaries

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

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Joy Talent” Joy Talent Investment Limited, a company incorporated under the Companies Ordinance with limited liability and an indirect wholly-owned subsidiary of the Company

• “Latest Practicable Date” 6 October 2006, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

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

– 1 –

DEFINITIONS

• “Model Code” Model Code for Securities Transactions by Directors of Listed Companies

• “Property” 9th Floor and Parking Spaces nos. P53 and P58 on 2nd Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong

• “Purchaser” Sunny Success Investment Limited, a company incorporated under the Companies Ordinance with limited liability and the purchaser of the Property

• “S&P Agreement” the sale and purchase agreement entered into between Universe Property and the Purchaser in relation to the sale and purchase of the Property

• “Sale” the sale of the Property by Universe Property to the Purchaser “SFO” the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong

• “Share(s)” share(s) of HK$0.02 (each) in the capital of the Company “Shareholder(s)” registered holder(s) of Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Universe Laser & Video” Universe Laser & Video Co. Limited, a company incorporated under the Companies Ordinance with limited liability and an indirect wholly-owned subsidiary of the Company

• “Universe Property” Universe Property Investment Limited, a company incorporated under the Companies Ordinance with limited liability, an indirect wholly-owned subsidiary of the Company and the vendor of the Property

• “US$” or “US dollars” United States dollars, the lawful currency of the United States of America

• “Valuation” the valuation of the Property given by BMI Appraisals as at 18 September 2006 in the sum of HK$27,500,000

• “%” per cent.

In this circular, unless otherwise stated, the exchange rate of HK dollars to US dollars for illustrative purposes only is HK$7.8 for every US dollar. This does not constitute a representation that any amounts have been, could have been, or may be exchanged at this rate or any other rate.

– 2 –

LETTER FROM THE BOARD

UNIVERSE INTERNATIONAL HOLDINGS LIMITED ���������� [*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1046)

Executive Directors:

Mr. Lam Shiu Ming, Daneil (Chairman) Ms. Chiu Suet Ying Mr. Yeung Kim Piu

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Independent Non-executive Directors:

Mr. Ng Kwok Tung Mr. Chiu Shin Koi Mr. Ma Ting Hung

Head office and principal place of business in Hong Kong: 18th Floor Wyler Centre Phase II 192-200 Tai Lin Pai Road Kwai Chung New Territories Hong Kong

11 October 2006

To the Shareholders

Dear Sir/Madam,

MAJOR TRANSACTION

SALE OF PROPERTY

1. INTRODUCTION

The Company announced on 19 September 2006 that Universe Property and the Purchaser had entered into the S&P Agreement, pursuant to which Universe Property would sell and the Purchaser would purchase the Property for a consideration of HK$31,125,870. The Consideration was agreed between Universe Property and the Purchaser after arm’s length negotiations.

• for identification purposes only

– 3 –

LETTER FROM THE BOARD

The Directors (including the independent non-executive Directors) believe that the terms of the S&P Agreement are fair and reasonable, on normal commercial terms and are in the interests of the Shareholders as a whole.

It is expected that the Group will recognize an estimated gross profit of approximately HK$13,911,000 on the Sale, which is calculated on the basis of the difference between the net book value of the Property in the Company’s latest audited accounts for the financial year ended 30 June 2005 and the Consideration after deduction of expenses. The gross profit figure of approximately HK$13,911,000 is subject to adjustment as a result of any possible revaluation of the Property as at the financial year ended 30 June 2006, the audited accounts for which have yet to be finalised.

The Sale constitutes a major transaction for the Company under the Listing Rules and is subject to the approval of the Shareholders at a special general meeting. No Shareholder has any material interest in the Sale as at the Latest Practicable Date. Accordingly, no Shareholder would be required to abstain from voting if the Company were to convene a special general meeting for the approval of the Sale. As the Company has received from Globalcrest, which is interested in approximately 53.70% of the entire issued share capital of the Company as at the Latest Practicable Date, a written certificate approving the Sale pursuant to Rule 14.44(2) of the Listing Rules, the Company will not convene any general meeting of the Shareholders to approve the Sale.

The purpose of this circular is to provide the Shareholders with further information in relation to the Sale and other information in compliance with the requirements of the Listing Rules.

2. S&P AGREEMENT

Date: 18 September 2006

• Parties: (a) Sunny Success Investment Limited as the purchaser of the Property. To the best of the knowledge, information and belief of the Directors and having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are third parties independent of the Company and its Connected Persons and there is no prior relationship or transaction between the Company and the Purchaser.

• (b) Universe Property as the vendor of the Property. Universe Property is an indirect wholly-owned subsidiary of the Company and is principally engaged in the leasing of investment properties.

Sale and Purchase

Pursuant to the S&P Agreement, Universe Property will sell, and the Purchaser will purchase, the Property upon the terms contained therein. The Property will be sold on an “as is” basis and subject to and with the benefit of the tenancy agreements in respect of the Property.

– 4 –

LETTER FROM THE BOARD

Property

The Property is a non-residential building known as 9th Floor and Parking Spaces nos. P53 and P58 on 2nd Floor of Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong. The Property is presently leased out for rental income.

Consideration

The consideration for the Sale is HK$31,125,870 which has been or will be paid by the Purchaser in cash in the following manner:

• (a) HK$3,112,587, representing 10% of the Consideration, has been paid to Universe Property as deposit upon the signing of the S&P Agreement; and

• (b) the balance of the Consideration in the sum of HK$28,013,283 will be paid upon completion of the S&P Agreement.

If the Purchaser fails to complete the sale and purchase of the Property in accordance with the terms and conditions of the S&P Agreement or if the Purchaser fails to make payment of the Consideration or any part thereof in accordance with the S&P Agreement, all deposit(s) already paid by the Purchaser to Universe Property shall be absolutely forfeited to Universe Property. Further, if Universe Property fails to complete the sale and purchase in accordance with the terms and conditions of the S&P Agreement, all deposit(s) already paid by the Purchaser to Universe Property shall be returned to the Purchaser without interest and Universe Property shall further pay a sum equivalent to the said deposit(s) to the Purchaser as liquidated damages.

Completion

It is expected that completion of the S&P Agreement will take place on a date which is three calendar months from the date of the S&P Agreement, namely 18 December 2006 or such earlier day as may be agreed between Universe Property and the Purchaser whereupon Universe Property will execute an assignment of the Property in favour of the Purchaser; and Universe Property, the Purchaser and the tenants under the tenancy agreements in relation to the Property will execute memoranda transferring all the relevant rental deposits from Universe Property to the Purchaser. Completion is subject to the proof of good title to the Property.

The terms of the S&P Agreement (including the Consideration) were determined as a result of negotiations between the parties by reference to the Valuation, after arm’s length negotiations and were on normal commercial terms. The Valuation has been based on the market value of the Property. The Consideration represents a premium of approximately 83.10% over the net book value of the Property in the Company’s latest audited financial statements for the financial year ended 30 June 2005 or a premium of 13.18% above the market value of the Property. The Directors (including the independent non-executive Directors) consider that the terms of the S&P Agreement (including the Consideration) are fair and reasonable, on normal commercial terms and in the interests of the Shareholders as a whole.

– 5 –

LETTER FROM THE BOARD

3. FINANCIAL EFFECT OF THE SALE

The annual rental incomes of the Property were approximately HK$75,000 and HK$649,000, representing approximately 0.03% and 0.37% of the turnover of the Company for the two financial years ended 30 June 2004 and 2005 respectively. The profits before taxation attributable to the Property were approximately HK$49,000 and HK$944,000 (including a sum of HK$400,000 representing an increase in fair value of the Property) for the two financial years ended 30 June 2004 and 2005 respectively. The profits after taxation attributable to the Property were approximately HK$41,000 and HK$520,000 (including a sum of HK$400,000 representing an increase in fair value of the Property) for the two financial years ended 30 June 2004 and 2005 respectively. The Group experienced a loss for the financial year ended 30 June 2004; and the profit after taxation figure of HK$520,000 represents approximately 5.28% of the profit after taxation of the Group for the financial year ended 30 June 2005.

The net book value of the Property as determined by an independent professional valuer, in the Company’s latest audited financial statements for the financial year ended 30 June 2005 was HK$17,000,000, representing 5.29% of the total assets of the Company as at 30 June 2005. The market value of the Property as at 18 September 2006 was approximately HK$27,500,000 as valued by BMI Appraisals.

The Sales will not have any material adverse impact on the operation of the Group.

4. REASONS FOR AND BENEFITS OF THE SALE

The Group is principally engaged in the business of distribution of films in various videogram formats, licensing and sub-licensing of film rights and film exhibition and leasing of investment properties.

The Directors believe that the Sale will benefit the Group in that it enables the Group to realise a satisfactory capital gain on the Property and will enhance the working capital and cash flow position of the Group. It is expected that the Group will recognise an estimated gross profit of approximately HK$13,911,000 on the Sale, which is calculated on the basis of the difference between the net book value of the Property in the Company’s latest audited financial statements for the financial year ended 30 June 2005 and the Consideration after deduction of expenses. The gross profit figure of approximately HK$13,911,000 is subject to adjustment as a result of any possible revaluation of the Property as at the financial year ended 30 June 2006, the audited financial statements for which have yet to be finalised.

– 6 –

LETTER FROM THE BOARD

5. USE OF SALE PROCEEDS

The net sale proceeds of the Property is expected to be approximately HK$30,911,000. The Board is constantly reviewing potential investment opportunities that would offer high returns, including but not limited to property investment, and will consider applying part or all of the net sale proceeds on any new investment opportunities that may arise in the future. As at the Latest Practicable Date, the Company has not identified any concrete investment or entered into any binding agreement to this effect. Should the Company enter into any arrangement of such investment in the future, the Company will make announcement in accordance with the requirements of the Listing Rules. The Board will also consider applying part or all of the net sale proceeds as the Group’s working capital or on the production of films and television series.

6. GENERAL

The Purchaser is principally engaged in the business of investment.

The Sale constitutes a major transaction for the Company under the Listing Rules and is subject to the approval of the Shareholders at a special general meeting. However, the Company has received from Globalcrest, which is interested in approximately 53.70% of the entire issued share capital of the Company as at the date of Latest Practicable Date, a written certificate approving the Sale pursuant to Rule 14.44(2) of the Listing Rules. The entire issued share capital of Globalcrest is held by Central Core Resources Limited, the trustee of a discretionary trust under which certain immediate family members of Mr. Lam Shiu Ming, Daneil and Ms. Chiu Suet Ying are discretionary objects. No Shareholder has any material interest in the Sale. Accordingly, no Shareholder would be required to abstain from voting, if the Company were to convene a special general meeting for the approval of the Sale. It is expected that no general meeting of the Shareholders will be held for the approval of the Sale.

7. ADDITIONAL INFORMATION

Your attention is also drawn to the appendices to this circular.

Yours faithfully, For and on behalf of the Board Lam Shiu Ming, Daneil Chairman

– 7 –

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

1. STATEMENT OF INDEBTEDNESS

As at 30 September 2006, being the latest practicable date for the purpose of ascertaining certain information relating to this indebtedness statement, the Group only had outstanding unsecured borrowings of HK$171,496, which wholly represented obligation under finance lease, and certain assets of the Group pledged to secure banking facilities granted to the subsidiaries of the Company. As at the Latest Practicable Date, the Group had not utilised any such banking facilities.

Save as aforesaid and apart from the contingent liabilities in respect of the pending litigation as set out on page 16 of this circular, the Group did not have, at the close of business on 30 September 2006, any mortgages, charges, debentures, loan capital issued and outstanding or agreed to be issued, debt securities, bank overdrafts, loans or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptance or acceptance credits or guarantees or other material contingent liabilities.

Save as disclosed above, the Directors confirm that there has been no material change in the indebtedness and contingent liabilities of the Group since 30 September 2006.

2. WORKING CAPITAL

Reference is made to the announcement of the Company dated 20 March 2006, the net current asset of the Group as at 31 December 2005 was approximately HK$144,958,000 based on the unaudited interim financial statements of the Group for the six months ended 31 December 2005.

As at the Latest Practicable Date, after due enquiry and taking into account the internal resources of the Group and the estimated net proceeds of HK$30,911,000 from the Sale, the Directors are of the opinion that the group has sufficient working capital for its present requirement, that is for at least the next 12 months from the date of publication of this circular.

3. MATERIAL ADVERSE CHANGE

Except for the material adverse changes from reduction in turnover and gross profit for the six months ended 31 December 2005 as disclosed in the announcement of the Company dated 20 March 2006 made pursuant to Rule 13.10 of the Listing Rules, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 30 June 2005, being the date to which the latest published audited financial statements of the Group were made up.

4. FOREIGN EXCHANGE EXPOSURE

As the Group’s sales are mostly denominated in HK dollars and US dollars, the Directors considered the exposure to fluctuation in exchange rates is limited and no financial instruments for hedging purposes are used by the Group.

– 8 –

FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECTS

In view of the difficulties of the local video market, the Group will adopt a more pragmatic approach when acquiring new titles for video distribution, while the Group will continue with the multi-faced content production strategy of targeting demands of various market, the Directors believes that it is beneficial to Group’s long term development by exploring various overseas market.

With the satisfactory results of the Group’s television series, the Group will continue to allocate more resource to the production of television series, the Group is confident that it will help boost future growth potential and profitability of the Group.

Apart from the production of multi-faced content, the Directors are constantly reviewing potential investment opportunities that would offer high returns, including but not limited to property investment.

The Directors consider that upon completion of the Sale, the Group’s financial and cash position can be further strengthen and together with the funding from, among other things, internal resources, the Group will be able to make suitable investment promptly when opportunities arise although no concrete investment has been identified at present.

The Group remains optimistic with the Group’s business performance in the coming years. Leveraging on the Group’s experience and competitive advantages, the Directors are confident that the Group can continue to consolidate its position in the industry.

– 9 –

PROPERTY VALUATION

APPENDIX II

The following is the text of a letter, summary of value and valuation certificate, prepared for the purpose of incorporation in this circular received from BMI Appraisals Limited, an independent valuer, in connection with its valuation as at 18 September 2006 of the property held by the Group.

==> picture [227 x 77] intentionally omitted <==

18 September 2006

The Directors Universe International Holdings Limited

18th Floor Wyler Centre Phase II 192-200 Tai Lin Pai Road Kwai Chung New Territories Hong Kong

Dear Sirs,

INSTRUCTIONS

We refer to the instructions from Universe International Holdings Limited (the “Company”) for us to value the property held by the Company and its subsidiaries (together referred to as the “Group”) located in Hong Kong. We confirm that we have conducted an inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property as at 18 September 2006 (“date of valuation”) for your disposal reference purpose.

BASIS OF VALUATION

Our valuation of the concerned property has been based on the Market Value, which is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

– 10 –

PROPERTY VALUATION

APPENDIX II

VALUATION METHODOLOGY

In valuing the property held by the Group, we have valued it on an open market basis by the Comparison Approach assuming sale in its existing state with the benefit of vacant possession and by making reference to comparable sales evidence as available in the relevant market. Appropriate adjustments have then been made to account for the differences between the subject property and the comparables in terms of age, time, location, floor level and other relevant factors.

We have also adopted the Investment Approach where appropriate by taking into account the current rents passing of the constituent units of the property being held under existing tenancies and the reversionary potential of the tenancies if the property has been or would be let to tenants.

TITLE INVESTIGATION

We have caused land searches to be made at the relevant Land Registry and have been provided with copies of title documents and tenancy agreements. We have been advised by the Group that no further relevant documents have been produced. However, we have neither examined the original documents to verify ownership nor to ascertain the existence of any amendments, which do not appear on the copies handed to us. All documents have been used for reference only.

VALUATION ASSUMPTIONS

Our valuation has also been made on the assumption that the property is sold in the open market without the benefit of deferred terms contract, leaseback, joint venture, management agreement or any similar arrangement which would serve to affect the value of the property.

In addition, no account has been taken of any option or right of pre-emption concerning or effecting the sale of the property and no forced sale situation in any manner is assumed in our valuation.

VALUATION CONSIDERATIONS

We have inspected the property externally and where possible, the interior of the property. In the course of our inspection, we did not note any serious defects. However, no structural survey has been made. We are, therefore, unable to report whether the property is free from rot, infestation or any other structural defects. No tests were carried out on any of its services.

In the course of our valuation, we have relied to a considerable extent on the information given by the Group and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenures, particulars of occupancy and other relevant information.

Dimensions, measurements and areas included in the valuation certificate are based on information contained in the leases and other documents provided to us and are therefore only approximations.

We have no reason to doubt the truth and accuracy of the information provided to us by the Group and we have relied on your confirmation that no material facts have been omitted from the information so supplied.

– 11 –

PROPERTY VALUATION

APPENDIX II

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the property or for any expenses or taxation, which may be incurred in effecting a sale.

Unless otherwise stated, it is assumed that the property is free from encumbrances, restrictions and outgoings of an onerous nature, which could affect its value.

Our valuation has been prepared in accordance with the HKIS Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institute of Surveyors.

Our valuation has been prepared under the generally accepted valuation procedures and are in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

REMARKS

Unless otherwise stated, all money amounts stated are in Hong Kong Dollars (HK$).

Our Summary of Value and the Valuation Certificate are attached herewith.

Yours faithfully For and on behalf of

BMI APPRAISALS LIMITED

Joannau W.F. Chan

BSc. MRICS MHKIS RPS (GP) Director

Notes: Ms. Joannau W.F. Chan is a Chartered Surveyor who has over 13 years’ experience in valuations of properties in Hong Kong and over 7 years’ experience in valuations of properties in the People’s Republic of China.

– 12 –

PROPERTY VALUATION

APPENDIX II

SUMMARY OF VALUE

		Market Value
		in existing state
		as at
Property		18 September 2006
		HK$
9th Floor and Parking Space Nos. P53 and P58 on 2nd Floor,		27,500,000
Wyler Centre Phase II (also known as Wyler Centre 2),
Nos. 192-200 Tai Lin Pai Road,
Kwai Chung, New Territories
Hong Kong
	Total:	27,500,000

– 13 –

PROPERTY VALUATION

APPENDIX II

VALUATION CERTIFICATE

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 18 September 2006 HK$

9th Floor and Parking Space Nos. P53 and P58 on 2nd Floor, Wyler Centre Phase II (also known as Wyler Centre 2), Nos. 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong

182/11,152th equal and undivided shares of and in the Remaining Portion of Kwai Chung Town Lot No. 130 and The Extention Thereto

The property comprises the whole of 9th Floor of a 30storey industrial building erected on a 2-storey lorry/car parking podium. The building was completed in 1989.

The gross floor area of the property (exclusive of parking spaces) is approximately 25,618 sq.ft. (2,379.97 sq.m.).

The property is held under New Grant No. 4694 for a term of 99 years less the last 3 days thereof from 1 July 1898. The said term has been extended until 30 June 2047 by virtue of Section 6 of New Territories Leases (Extension) Ordinance 1988.

As advised by the Group, the property is let under the following tenancies:

9th Floor of the property is let under a tenancy agreement dated 31 January 2005 for a term of 3 years from 1 March 2005 to 29 February 2008 at a monthly rent of HK$140,899 exclusive of management fee, rates, government rent and other outgoings.

Parking Space Nos.P53 and P58 of the property are let under a tenancy agreement dated 30 December 2004 for a term of 2 years from 3 January 2005 to 2 January 2007 at a monthly rent of HK$5,600 inclusive of rates, government rent and management fee.

27,500,000

Notes:

1. The registered owner of the property is Universe Property Investment Limited vide Memorial Nos. TW1326970 (Re: 9th Floor and Parking Space No. P53) and TW1375492 (Re: Parking Space No. P58) dated 17 December 1999 and 20 September 1999 respectively.

2. The property is subject to the following encumbrances:

3. a. Mortgage in favour of The Hong Kong and Shanghai Banking Corporation Limited vide Memorial No. TW1326971 dated 17 December 1999 (Re: 9th Floor and Parking Space No. P53 on 2nd Floor);

4. b. Rent Assignment in favour of The Hong Kong and Shanghai Banking Corporation Limited vide Memorial No. 06030101270260 dated 10 February 2006 (Re: 9th Floor and Parking Space No. P53 on 2nd Floor); and

5. c. Rent Assignment in favour of The Hong Kong and Shanghai Banking Corporation Limited vide Memorial No. 06030101270255 dated 10 February 2006 (Re: Parking Space No. P58 on 2nd Floor).

6. Universe Property Investment Limited is a wholly-owned subsidiary of the Company.

– 14 –

GENERAL INFORMATION

APPENDIX III

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, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares (within the meaning of Part XV of the SFO) or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required to be: (a) 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 were taken or deemed to have under such provisions of the SFO); (b) entered in the register kept by the Company pursuant to Section 352 of the SFO; or (c) notified to the Company and the Stock Exchange pursuant to the Model Code were as follows:

Interests in Shares

				Approximate
	Nature of	Number of		percentage of
Name of Director	interests	Shares held	Position	shareholding
Mr. Lam Shiu Ming, Daneil	Founder of	872,406,705	Long	53.70%
	a discretionary
	trust_(Note)_

Note: The trustee of the discretionary trust is Central Core Resources Limited which owns the entire issued share capital of Globalcrest which in turn is interested in 872,406,705 Shares.

Save as disclosed herein, as at the Latest Practicable Date, none of the Director or chief executive of the Company had any interest or short position in the shares, underlying shares (within the meaning of Part XV of the SFO) or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be: (a) 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 were taken or deemed to have under such provisions of the SFO); (b) entered in the register kept by the Company pursuant to Section 352 of the SFO; or (c) notified to the Company and the Stock Exchange pursuant to the Model Code.

– 15 –

GENERAL INFORMATION

APPENDIX III

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons (not being Directors or chief executive of the Company) had an interest or short position in the Shares or 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 who were, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group, or in any options in respect of such capital:

Interests in Shares

		Approximate
	Number of Shares	percentage of
Name of shareholders	beneficially held	shareholding
Globalcrest_(Note)_	872,406,705	53.70%
Central Core Resources Limited_(Note)_	872,406,705	53.70%
Pan Asia Special Opportunities Fund	83,464,285	5.14%

Note: The entire issued share capital of Globalcrest is held by Central Core Resources Limited, the trustee of a discretionary trust under which certain immediate family members of Mr. Lam Shiu Ming, Daneil and Ms. Chiu Suet Ying are discretionary objects.

Save as disclosed above, the Directors or chief executive of the Company are not aware of any other persons (not being Directors or chief executive of the Company) as at the Latest Practicable Date, who had an interest or short position in the Shares or 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 who was directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group, or in any options in respect of such capital.

4. PENDING LITIGATION

As announced by the Company in its annual reports 2002 to 2005, interim reports 2002/2003 to 2005/2006, prospectus in relation to rights issue dated 19 August 2003, circular dated 12 April 2006 and circular dated 12 July 2006, the Group has the following pending litigation.

A Court of First Instance was commenced in Hong Kong on 17 April 2002 by The Star Overseas Limited (“Star”), an independent third party, against Universe Entertainment Limited (“UEL”), an indirect wholly-owned subsidiary of the Company.

In the above action, Star alleges that a sum of US$935,871.65 (equivalent to approximately HK$7,299,798.84) was payable by UEL to Star as its share of the revenue of the movie entitled “Shaolin Soccer” (the “Movie”).

– 16 –

GENERAL INFORMATION

APPENDIX III

Pursuant to an Order (the “Order”) made by High Court on 21 February 2003, the Company was ordered and has paid to Star a sum of HK$5,495,699.80, being part of the licence fee of the Movie received by UEL from Miramax Films (being the licencee of the Movie) and which was also part of the sum claimed by Star. Pursuant to the Order, UEL is also liable to pay Star interest in the sum of HK$350,905.30 and some of the costs of the application leading to the making of the Order, all of which have been settled. As the Order has not disposed of all the claims of US$935,871.65 (equivalent to approximately HK$7,299,798.84) by Star, UEL is entitled to continue to defend the claim by Star for recovering the remaining balance in the sum of approximately HK$1,804,099.04 (HK$7,299,798.84 less HK$5,495,699.80).

On 30 April 2002, UEL issued a Writ of Summons against the Star above for the latter’s wrongful exploitation of certain rights in the Movie co-owned by both parties. UEL claimed to recover loss and damages suffered by UEL as a result of the wrongful exploitation.

On 9 September 2002, Universe Laser & Video issued a Writ of Summons against Star for the latter’s infringement of the licensed rights in the Movie above held by Universe Laser & Video. Universe Laser & Video claimed to recover all loss and damages suffered by Universe Laser & Video as a result of the said infringement.

In the opinion of legal counsel, it is premature to predict the outcome of the claim against UEL. The Board are of the opinion that the outcome of the claim against UEL will be no material financial impact on the Group.

Save as disclosed above, no member of the Group is engaged in any litigation or claim of material importance and, so far as the Directors are aware, no litigation or claim of material importance is pending or threatened against any member of the Group.

5. SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors has any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the relevant member of the Group within one year without payment of compensation other than statutory compensation).

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business which competes or is likely to compete, whether directly or indirectly, with the business of the Company.

7. INTEREST IN ASSETS AND CONTRACTS

As announced by the Company on 23 January 2006, Universe Laser & Video entered into an unconditional multiple rights assignment with Universe Film Productions Company Limited (“UFP”) on 23 January 2006 whereby Universe Laser & Video acquired the full and complete rights, titles and interest in and to seven motion picture titles produced between 1994 and 1997 and all the physical materials pertaining thereto from UFP for a total consideration of HK$3,160,000.

– 17 –

APPENDIX III

GENERAL INFORMATION

The entire issued share capital of UFP is beneficially owned by Globalcrest, the entire issued share capital of which is in turn held by Central Core Resources Limited, the trustee of a discretionary trust under which certain immediate family members of Mr. Lam Shiu Ming, Daneil and Ms. Chiu Suet Ying (who are both Directors) are discretionary objects. Globalcrest, a substantial shareholder of the Company and a Connected Person, owns approximately 53.70% of the entire issued Shares. Mr. Lam Shiu Ming, Daneil is also a founder of the said discretionary trust.

On the other hand, Universe Laser & Video has been paying monthly rentals of HK$25,000 and HK$80,000 (increased from HK$20,000 with effect from 1 September 2005) to Mightlong Investments Limited (“Mightlong”) since 1 July 2002 for the use by the director of Universe Laser & Video of a motor vehicle owned by Mightlong, and Mass Express Development Limited (“Mass Express”) since 1 July 1999 for the use by the director of Universe Laser & Video of an apartment owned by Mass Express, respectively. The entire issued share capital of Mightlong (a company incorporated under the Companies Ordinance with limited liability) is owned by Globalcrest; and the entire issued share capital of Mass Express (a company incorporated under the Companies Ordinance with limited liability) is owned by Globalcrest until 26 July 2005 whereupon the entire issued share capital of Mass Express was transferred to Ms. Chiu Suet Ying.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or proposed Director have any interest direct or indirect, in any assets which have been, since 30 June 2005 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors was materially interested in any subsisting contract or arrangement which is significant in relation to the business of the Group.

8. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has provided its advice for inclusion in this circular:

Name Qualifications BMI Appraisals Property valuer

BMI Appraisals has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter, summary of value and valuation certificate and the reference to its name in the form and context in which they appear.

– 18 –

GENERAL INFORMATION

APPENDIX III

As at the Latest Practicable Date, BMI Appraisals was not interested beneficially or otherwise in any Shares or securities in any of subsidiaries or associated corporations (within the meaning of Part XV of the SFO) of the Company and did not have any rights, whether legally enforceable or not, or option to subscribe for or to nominate persons to subscribe for any Shares or securities in any of subsidiaries or associated corporations of the Company nor did they have any interests, either direct or indirect, in any assets which have been, since 30 June 2005 (being the date to which the latest published audited accounts of the 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 Group.

9. MATERIAL CONTRACTS

Save as disclosed below, there are no material contracts (other than contracts entered into in the ordinary course of business) which have been entered into by the Group in the two years immediately preceding the date of this circular and are or may be material.

• (a) a multiple rights assignment dated 23 January 2006 between Universe Laser & Video and UFP pursuant to which Universe Laser & Video assigned the full and complete rights, titles and interests and to seven completed motion picture titles produced between 1994 and 1997 and all the physical materials pertaining thereto from UFP for a total consideration of HK$3,160,000;

• (b) a provisional sale and purchase agreement dated 22 March 2006 entered into between Universe Property and Intercontinental Film Distributors (H.K.) Limited in relation to the sale and purchase of 20th Floor and parking space no. P59 on 2nd Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong;

• (c) a sale and purchase agreement dated 4 April 2006 entered into between Universe Property and Intercontinental Film Distributors (H.K.) Limited in relation to the sale and purchase of 20th Floor and parking space no. P59 on 2nd Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong;

• (d) an assignment dated 1 August 2006 between Universe Property and Intercontinental Development and Services Limited in relation to the sale and purchase of 20th Floor and parking space no. P59 on 2nd Floor, Wyler Centre, Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong;

• (e) a sale and purchase agreement dated 19 June 2006 between Joy Talent and ����� ���������� (Beijing Redstone Jianwai Real Estate Co., Ltd.*) in relation to the purchase and sale of No. 1501, 15th Floor, Block 24, �� (Jianwai) SOHO, 39 Dongsanhuan Zhonglu Road, Chaoyang District, Beijing, the People’s Republic of China; and

• (f) the S&P Agreement.

• for identification purposes only

– 19 –

GENERAL INFORMATION

APPENDIX III

10. MISCELLANEOUS

• (a) The secretary and financial controller of the Company is Mr. Chan Hau Chuen, who is a fellow member of the Association of Chartered Certified Accountants and an associate member of The Hong Kong Institute of Certified Public Accountants.

• (b) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and its principal place of business is at 18th Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong.

• (c) The share registrar of the Company in Hong Kong is Abacus Share Registrars Limited at Level 25, Three Pacific Place, 1 Queen’s Road East, Hong Kong.

• (d) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the Company’s principal place of business in Hong Kong at 18th Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong during normal business hours on any weekday (public holidays excepted) from the date of this circular up to and including 27 October 2006:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the annual reports of the Company for the year ended 30 June 2004 and 30 June 2005 respectively;

• (c) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;

• (d) the letter of consent as set out in the section headed “Qualification and Consent of Expert” in this appendix; and

• (e) a circular dated 12 April 2006 in respect of the sale of 20th Floor and parking space No. P59 on 2nd Floor, Wyler Centre Phase II, 192-200 Tai Lin Pai Road, Kwai Chung, New Territories, Hong Kong by Universe Property; and a circular dated 12 July 2006 in respect of an acquisition of No. 1501, 15th Floor, Block 24, �� (Jianwai) SOHO, 39 Dongsanhuan Zhonglu Road, Chaoyang District, Beijing, the People’s Republic of China by Joy Talent.

– 20 –