Uni-Bio Science Group Limited — Capital/Financing Update 2007

Sep 19, 2007

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

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(incorporated in the Cayman Islands with limited liability)

(Stock code: 690)

DISCLOSEABLE TRANSACTION RELATING TO THE PROPOSED DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF, AND LOANS DUE FROM, NEW MASTER GROUP LIMITED

Financial Adviser to the Company

REXCAPITAL (Hong Kong) Limited

SUMMARY

Proposed Disposal

The Company entered into the Disposal Agreement after the close of trading hours on 19 September 2007 pursuant to which the Purchaser, an Independent Third Party, agreed to purchase and the Company agreed to sell the Sale Shares and the Sale Loan.

The Disposal Consideration of HK$36 million will be satisfied wholly in cash.

New Master is a direct, wholly-owned subsidiary of the Company. Its asset is the holding of the Group’s equity interests in those of its members which are currently principally engaged in the Printing and Packaging Business. The Disposal, if materialised, would result in the Group becoming principally engaged in the Bio-Science Related Business only.

Implication of the Listing Rules

As the applicable percentage ratios under the Listing Rules of the Disposal is more than 5% but less than 25%, the transactions contemplated under the Disposal Agreement constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

Completion of the Disposal Agreement and the transactions contemplated thereunder may or may not take place. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

Circular

A circular containing, among other things, further details of the Disposal will be despatched to the Shareholders in accordance with the Listing Rules.

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In early September this year, Mr Tong Kit Shing (the chairman of the Company) was first approached by an Independent Third Party (being the ultimate beneficial owner of the Purchaser of the Disposal Agreement named in this announcement), who was acquainted with Mr Tong during certain social activities in Dongguan, and expressed interest in acquiring the Printing and Packaging Business of the Group through the acquisition of the entire issued share capital of New Master. A definitive agreement for the proposed Disposal was finally reached on 19 September 2007 as summarised below.

THE DISPOSAL AGREEMENT

Date

19 September 2007

Parties

• Vendor : the Company

• Purchaser : Datasino Group Limited, a company incorporated in the BVI with limited liability which is solely and beneficially owned by Ms Yin Yinglan (“Ms Yin”) for investment holding purposes.

To the best of the Directors’ knowledge having made all reasonable enquiries, information and belief:

• (i) the Purchaser and Ms Yin are Independent Third Parties;

• (ii) the Purchaser and Ms Yin have no relationship with the Group or its connected persons other than the contractual relationship arising from the entering into of the Disposal Agreement;

• (iii) there is no relationship between the Purchaser and Ms Yin with Fortune Gold Developments Limited, the previous controlling shareholder of the Company prior to Automatic Result (the current single largest substantial shareholder of the Company) becoming the controlling shareholder of the Company on 13 September 2005, and its beneficial owner, Mr Ng Man Chan; and

• (iv) the Company did not have any previous transactions (other than the dealings arising from the transaction currently contemplated under the Disposal Agreement) with the Purchaser and its ultimate beneficial owner (namely, Ms Yin) which required aggregation under Rule 14.22 of the Listing Rules.

Assets to be acquired

• (a) The Sale Shares (representing the entire issued share capital of New Master); and

• (b) The Sale Loan (representing all the loans owing from the New Master Group to the Company) on the Disposal Completion, which is interest-free and unsecured. As at the date of this announcement, the amount of the Sale Loan was approximately HK$26.5 million.

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Disposal Consideration

The Disposal Consideration is HK$36 million, of which:

• (i) the portion of the Disposal Consideration attributable to the Sale Loan shall be equal to the face value of the Sale Loan (being approximately HK$26.5 million as at the date of this announcement); and

• (ii) the balance of the Disposal Consideration (being approximately HK$9.5 million as at the date of this announcement) shall be attributable to the Sale Shares.

The Disposal Consideration, which is to be satisfied by the Purchaser wholly in cash, is to be settled in the following manner:

• (i) a deposit of HK$3 million shall be paid by the Purchaser to the Company within five Business Days after the signing of the Disposal Agreement; and

• (ii) the balance of the Disposal Consideration of HK$33 million shall be paid by the Purchaser to the Company upon the Disposal Completion.

If the Disposal Agreement is terminated (other than due to the default of the Purchaser), the deposit of HK$3 million shall be refunded by the Company to the Purchaser without interest within seven Business Days after the date of termination.

Basis of the Disposal Consideration

The Disposal Consideration has been agreed between the Company and the Purchaser based on arm’s length negotiations with reference to the unaudited consolidated net assets of the New Master Group as at 31 March 2007 (which were prepared according to the Hong Kong Financial Reporting Standard) of approximately HK$6.9 million, the balance of the Sale Loan as at 31 March 2007 (and as at the date of this announcement) of approximately HK$26.5 million and the unsatisfactory operating conditions of the New Master Group.

Conditions Precedent to the Disposal Completion

The Disposal Completion shall be conditional upon, among other things, the fulfilment or, as the case may be, waiver of the following Conditions Precedent:

• (i) the delivery of a legal opinion addressed to the Purchaser in form and substance satisfactory to the Purchaser by a firm of lawyers qualified to advise on BVI law confirming the due establishment of New Master;

• (ii) the carrying out of due diligence review by the Purchaser of all material respects in relation to the assets, liabilities, operations and affairs of the New Master Group which the Purchaser deems necessary, desirable or appropriate and confirmation by the Purchaser that the results of such due diligence review are satisfactory in all respects;

• (iii) the obtaining by the Purchaser of all necessary consents, authorisations or other approvals of any kind in connection with the entering into and performance of the terms of the Disposal Agreement; and

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• (iv) none of the warranties given by the Company as contained in the Disposal Agreement having been breached in any material respect (or, if capable of being remedied, has not been remedied), or is misleading or untrue in any material respect.

The Purchaser may waive the conditions stated in (i), (ii) and (iv) above. None of the Conditions Precedent can be waived by the Company.

If any of the Conditions Precedent have not been fulfilled or waived by the Purchaser by the Longstop Date or such other date as the Purchaser and the Company may agree in writing, the provisions of the Disposal Agreement (other than certain clauses as specified in the Disposal Agreement) shall from such date have no effect and no party to the Disposal Agreement shall have any claim against the others save for claim (if any) in respect of such continuing provisions or any antecedent breach of the Disposal Agreement.

Neither the Company nor the Purchaser shall be obliged to complete the sale and purchase of any of the Sale Shares or the Sale Loan unless completion of the sale and purchase of all the Sale Shares and the Sale Loan takes place simultaneously.

Completion of the Disposal Agreement and the transactions contemplated thereunder may or may not take place. Shareholders and potential investors of the Company are reminded to exercise caution when dealing in the securities of the Company.

Disposal Completion

The Disposal Agreement provides that the Disposal Completion will take place on the third Business Days next following the day on which the last unfulfilled Condition Precedent is satisfied or, as the case may be, waived.

INFORMATION ON THE NEW MASTER GROUP

New Master is a company incorporated in the BVI on 8 July 1999 with limited liability. It is a direct, wholly owned subsidiary of the Company. It is one of the investment holding companies of the Group and its asset is the holding of the Group’s equity interests in those of its members which are currently principally engaged in the Printing and Packaging Business.

The Disposal, if materialised, would result in the Group becoming principally engaged in, and being left with, the Bio-Science Related Business only.

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Corporate structure of the Group prior to and immediately after the Disposal Completion Before the Disposal Completion

Company 100% 100% 100% New Master Group Limited Lelion Holdings Limited A group of subsidiaries of the A group of subsidiaries of the Company which is principally Company which is principally engaged in the Printing engaged in the and Packaging Business Bio-Science Related Business (Note 1) (Note 2)

Immediately after the Disposal Completion

Company Datasino Group Limited 100% 100% Lelion Holdings Limited New Master Group Limited A group of subsidiaries of the A group of subsidiaries of the Company which is principally Purchaser which is principally engaged in the engaged in the Printing and Bio Science Business Packaging Business (Note 2) (Note 1)

Notes:

• (1) The group of subsidiaries of the Company held by New Master comprising New Spring Group Company Limited, Today Graphic Company Limited, Today Advertising Products Company Limited, Sun Hip Fung (JF) Printing Products Co., Ltd, New Richest Holdings Limited, Pronto Print Limited, Anson Printing Group Limited, Visual Products Limited, Great Tech Trading Limited and New Pearl Hot Stamping and Packaging Limited.

• (2) The group of subsidiaries of the Company held by Lelion Holdings Limited comprising Joint Peace Limited, Uni-Bio Management Limited, Nan Hoo Properties Limited, 北京博康健基因 科技有限公司 (transliteration into English as Beijing Genetech Pharmaceutical Co., Ltd.), Figures Up Trading Limited, 東莞太力綠色環保科技有限公司 (transliteration into English as Dongguan Tai Li Green Environmental Technology Company Limited), 東莞市博康健醫藥科 技有限公司 (transliteration into English as Dongguan Shi Bo Kang Jian Pharmaceutical Technology Co., Ltd.), Zethanel Properties Limited and 深圳市華生元基因工程發展有限公 司 (transliteration into English as Shenzhen Watsin Genetech Co., Ltd.).

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REASONS FOR THE DISPOSAL

The Company is an investment holding company and its subsidiaries are principally engaged in (i) the Printing and Packaging Business and (ii) the Bio-Science Related Business.

The Group has been actively re-evaluating its existing business operations. The re-evaluation process includes (i) optimizing its existing business operations, (ii) studying the feasibility of downsizing or (if suitable opportunities arise) divesting its less promising business operations and (iii) exploring investment opportunities with high growth potentials to diversify the Group’s business operations with an aim to improving the financial performance of the Group.

Despite the Group’s efforts to improve the Printing and Packaging Business over the years, the Group has been facing testing conditions in the Printing and Packaging Business as reflected in the results of the Group for each of the two years ended 31 March 2006 and 31 March 2007.

For each of the two years ended 31 March 2006 and 31 March 2007, the Group recorded:

• (i) as regards the Printing and Packaging Business:

• unaudited consolidated loss before taxation of approximately HK$40,416,000 and unaudited consolidated profit before taxation of approximately HK$3,011,000 respectively; and

• unaudited consolidated loss after taxation of approximately HK$36,863,000 and HK$1,829,000 respectively.

• (ii) as regards the Bio-Science Related Business and investment holding business:

• unaudited consolidated loss before taxation of approximately HK$5,298,000 and unaudited consolidated profit before taxation of approximately HK$117,810,000 respectively; and

• unaudited consolidated loss after taxation of approximately HK$5,297,000 and unaudited consolidated profit after taxation of approximately HK$62,145,000 respectively.

During the year ended 31 March 2007, the turnover attributable to the Printing and Packaging Business accounted for approximately 23.9% of the Group’s total turnover and recorded an insignificant profit of approximately HK$3 million before taxation and a loss of approximately HK$1.8 million after taxation.

The Group achieved a net income of approximately HK$60 million for the year ended 31 March 2007 compared to a loss of approximately HK$42 million for the corresponding year ended 31 March 2006, which was attributable to the Group’s gradual and prudent shift of its focus to the bio-pharmaceutical sector in light of the relatively more promising prospect of the industry.

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Given the sustainable economic growth of the PRC and the increase in demand for pharmaceutical and healthcare products over the past years, the Directors (including the independent non-executive Directors) is optimistic about the future prospects of the pharmaceutical and healthcare industry. The Directors believe and consider it more realistic that, by way of (i) re-deploying more resources to expand the relatively more promising BioScience Related Business and (ii) disposal of the continuous loss-making Printing and Packaging Business, the Group would result in a rationalisation of its business direction and an increase in its profitability and market competitiveness.

Expected Gain from Disposal

The Company will realize an unaudited gain of approximately HK$2.6 million from the Disposal. Such gain is expected to accrue to the Company. The gain is calculated based on the sale proceeds from the Disposal less the carrying amount of approximately HK$6.9 million of the unaudited net asset value of the New Master Group and the Sale Loan of approximately HK$26.5 million.

Use of Proceeds from the Disposal

The proceeds of the Disposal Consideration, after deducting related expenses (primarily comprising legal and professional charges of approximately HK$0.5 million), is estimated to be approximately HK$35.5 million. The Company intends to apply such net proceeds for general working capital for the development of the Group’s Bio-Science Related Business.

BENEFITS FROM THE DISPOSAL

The Directors (including the independent non-executive Directors) are of the view that the Group will, following the Disposal, be able to:

• (i) focus and re-direct its resources on its Bio-Science Related Business, which is comparatively more promising that the Packaging and Printing Business and the Group would enjoy the benefit from the upwards trend of the pharmaceutical and healthcare markets, in particular the PRC;

• (ii) mitigate the loss-making situation in the Printing and Packaging Business which, in turn, would enhance the ability of the Group to increase its profitability and market competitiveness.

The Directors (including the independent non-executive Directors) are of the view that the Disposal Agreement is on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE DISPOSAL

Before the Disposal Completion, the results of the New Master Group have been consolidated into the results of the Group.

Immediately after the Disposal, New Master will cease to be a subsidiary of the Company and the Company will cease to have any interest in the New Master Group.

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The Group will concentrate on the Bio-Science Related Business and keep actively exploring business opportunities which are currently expected to be those which are complementary or, in the views of the Directors, able to provide synergies to the Bio-Science Related Business.

IMPLICATION UNDER THE LISTING RULES

As the applicable percentage ratios under the Listing Rules of the Disposal is more than 5% but less than 25 %, the transactions contemplated under the Disposal Agreement constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

To the best of the Directors’ knowledge having made all reasonable enquiries, information and belief, none of the controlling Shareholder, the Directors and the chief executives of the Company and their respective associates has any material interest in the Disposal as at the date of this announcement.

FUND RAISING ACTIVITY OF THE COMPANY IN THE 12 MONTHS IMMEDIATELY PRECEDING THE DATE OF THIS ANNOUNCEMENT

The Company has not undertaken any fund raising activities within the 12 months immediately prior to the date of this announcement.

GENERAL INFORMATION

Automatic Result became a controlling shareholder of the Company on 13 September 2005. As at the date of this announcement, the shareholding structure of the Company is set out below:

No. of Listco Shares Automatic Result Limited (“ARL”)(Notes) 2,436,407,736 Public Shareholders 5,422,284,224 TOTAL: 7,858,691,960 Notes:	% 31.00 69.00
	100.00

The entire issued share capital of ARL is solely and beneficially owned by Mr Tong Kit Shing whereas Mr Liu Guoyao is the sole director of ARL. Both Mr Tong and Mr Liu are the executive directors of the Company. They are deemed to be interested in all the interest in the Shares held by ARL by virtue of the SFO.

For the avoidance of doubt, the number of Shares held by ARL does not take into account any Shares that may fall to be allotted and issued upon exercise of the subscription right attaching to the warrants (the “Warrants”) issued by the Company by way of bonus issue (the “Bonus warrants Issue”) (as disclosed in the announcement of the Company dated 25 August 2006) entitling the holders to subscribe in cash for new Listco Shares at the adjusted subscription price of HK$0.7143 per Listco Share (subject to adjustment) on the basis of two warrants for every 10 existing Listco Shares held on 22 September 2006 as constituted by an instrument by way of deed poll dated 29 September 2006 executed by the Company.

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SHAREHOLDERS’ CIRCULAR

A circular containing, among other things, further details of the Disposal will be despatched to the Shareholders in accordance with the Listing Rules as soon as practicable.

TERMS USED IN THIS ANNOUNCEMENT

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

“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Automatic Result” or	Automatic Result Limited, a company incorporated in the British
“ARL”	Virgin Islands with limited liability, which is solely and
	beneficially owned by Mr Tong Kit Shing (an executive Director)
	and of which Mr Liu Guoyao (an executive Director) is the sole
	director.
“Bio-Science Related	one of the principal businesses carried on by the Group in the
Business”	research and development, production, distribution and sale of
	bio-pharmaceutical products
“Board”	the board of Directors
“BVI”	the British Virgin Islands
“Business Day”	a day, other than Saturday, on which banks in the Hong Kong
	are open for business
“Company”	Uni-Bio Science Group Limited, an exempt company
	incorporated in the Cayman Islands and whose shares are listed
	on the main board of the Stock Exchange
“Completion Date”	the date on which Disposal Completion takes place, being the
	third Business Day after the fulfilment or, as the case may be,
	waiver of all the Conditions Precedent (or such other date as
	the parties to the Disposal Agreement may agree in writing)
“Conditions Precedent”	the conditions precedent to the Disposal Completion as set out
	in the Disposal Agreement and summarised in the paragraph
	headed “The Disposal Agreement” in this announcement
“connected person”	has the same meaning ascribed to it under the Listing Rules
“Director(s)”	director(s) of the Company
“Disposal”	the disposal by the Company to the Purchaser of the Sale Shares
	and the Sale Loan, subject to and upon the terms and conditions
	of the Disposal Agreement

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“Disposal Agreement”	the conditional sale and purchase agreement dated 19 September
	2007 entered into between the Company and the Purchaser in
	relation to the Disposal
“Disposal Completion”	completion of the Disposal
“Disposal Consideration”	the consideration of HK$36 million payable by the Company to
	the Purchaser for the Disposal pursuant to the Disposal
	Agreement
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party”	a party and, if applicable, the ultimate beneficial owner of the
	party who is independent of the Company and connected persons
	of the Company
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Longstop Date”	30 October 2007
“New Master”	New Master Group Limited, a company incorporated in the BVI
	with limited liability on 8 July 1999, a direct, wholly-owned
	subsidiary of the Company as at the date of this announcement
“New Master Group”	New Master and those of its subsidiaries (which are principally
	engaged in the Printing and Packaging Business)
“Printing and Packaging	one of the principal businesses carried on by the Group in the
Business”	manufacture and trading of packaging products, paper gift items
	and promotional materials
“PRC”	The People’s Republic of China, excluding Hong Kong, the
	Macau Special Administrative Region of the PRC and Taiwan
“Purchaser”	Datasino Group Limited (being the purchaser under the Disposal
	Agreement), a company incorporated in the British Virgin Islands
	with limited liability which is solely and beneficially owned by
	Ms Yin Yinglan for investment holding purposes
“Sale Loan”	all the loans due from the New Master Group to the Company
	on the date of the Disposal Completion
“Sale Shares”	the 200 ordinary shares of US$1 par value each in the issued
	share capital of New Master, representing the entire issued share
	capital of New Master and all of which are owned by the
	Company as at the date of the Disposal Agreement

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“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

“Share(s)” Share(s) of the Company

“Shareholder(s)” holder(s) of Shares

“Stock Exchange” The Stock Exchange of Hong Kong Limited

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

“%” per cent.

By Order of the Board Uni-Bio Science Group Limited Tong Kit Shing Chairman

Hong Kong, 19 September 2007

• For identification purposes only

As at the date of this announcement, the executive Directors are Mr. Tong Kit Shing (Chairman), Mr. Liu Guoyao and Mr. Cheng Wai Man; the independent non-executive Directors are Mr. Zhou Yaoming, Mr. Lin Jian and Mr. So Yin Wai.

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