Uni-Bio Science Group Limited — Proxy Solicitation & Information Statement 2006

Mar 1, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Uni-Bio Science Group Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

This circular is addressed to the shareholders of the Company in connection with an extraordinary general meeting of the Company to be held on 17 March 2006. This circular does not constitute an offer of, nor is it intended to invite offers for, shares in, or other securities of the Company.

The Stock Exchange of Hong Kong Limited and the Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim 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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(incorporated in the Cayman Islands with limited liability)

(Stock Code: 690)

(A) PROPOSED OPEN OFFER OF 360,000,000 OFFER SHARES AT HK$0.50 PER OFFER SHARE PAYABLE IN FULL ON ACCEPTANCE ON THE BASIS OF TWO OFFER SHARES FOR EVERY EXISTING SHARE HELD AND

(B) GRANT OF SPECIAL MANDATE

Financial Adviser to the Company

REXCAPITAL (Hong Kong) Limited

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

ASIAVEST PARTNERS

AsiaVest Investment Advisory Limited

Underwriter

Automatic Result Limited

A letter from the Board is set out on pages 7 to 19 of this circular and a letter from the Independent Board Committee is set out on page 20 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 21 to 35 of this circular.

It should be noted that the Underwriting Agreement contains provisions granting Automatic Result Limited, the Underwriter, the right to terminate the Underwriting Agreement by notice in writing, which may be exercised by the Underwriter at any time prior to 4:00 p.m. on the third Business Day immediately after the last day for acceptance of the Open Offer, if in the reasonable opinion of the Underwriter, the success of the Open Offer would be materially and adversely affected by any event(s) as set out in the section headed “Termination of the Underwriting Agreement” on page 14 of this circular. If the Underwriter exercises such right, the obligations of the Underwriter under the Underwriting Agreement shall cease and the Open Offer will not proceed.

A notice convening an extraordinary general meeting of Uni-Bio Science Group Limited to be held at Room 2302, 23rd Floor, Lippo Centre Tower II, 89 Queensway, Admiralty, Hong Kong at 10:00 a.m. on 17 March 2006 is set out on pages 91 to 93 of this circular. A form of proxy for use at the extraordinary general meeting is enclosed. Whether or not you are able to attend and vote at the extraordinary general meeting, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and deposit the same with the Company’s Hong Kong branch share registrar and transfer office, Abacus Share Registrars Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the extraordinary general meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the extraordinary general meeting or any adjournment thereof should you so wish.

1 March 2006

• For identification purposes only

TERMINATION OF THE UNDERWRITING AGREEMENT

It should be noted that the Underwriting Agreement contains provisions granting the Underwriter the right to terminate the Underwriting Agreement, which may be exercised by the Underwriter at any time prior to 4:00 p.m. on the third Business Day immediately after the last day for acceptance of the Open Offer, if in the reasonable opinion of the Underwriter:

• (1) the success of the Open Offer would be materially and adversely affected by:

• (a) the introduction of any new regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may, in the reasonable opinion of the Underwriter, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Open Offer; or

• (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date of the Underwriting Agreement) of a political, military, financial, economic or other nature (whether or not ejusdem generic with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriter, materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (c) any material adverse change in the business or in the financial or trading position of the Group as a whole; or

• (2) any material adverse change in market conditions (including, without limitation, a change in fiscal or monetary policy or foreign exchange or currency markets, suspension or restriction of trading in securities, and a change in currency conditions includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which, in the reasonable opinion of the Underwriter, makes it inexpedient or inadvisable to proceed with the Open Offer; or

• (3) this circular or the prospectus of the Open Offer when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or any applicable regulations) which has not prior to the date of the Underwriting Agreement been publicly announced or published by the Company and which may, in the reasonable opinion of the Underwriter, is material to the Group as a whole and is likely to affect materially and adversely the success of the Open Offer or might cause a prudent investor not to accept the Offer Shares provisionally allotted to it.

If the Underwriting Agreement is terminated by the Underwriter on or before the aforesaid deadline or does not become unconditional, the Open Offer will not proceed. The parties to the Underwriting Agreement shall be entitled to claim against the others if there is any antecedent breach prior to termination.

– i –

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Expected timetable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Proposed Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Underwriting arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Warning of the risks in trading of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Business and future prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Funds raised by way of issuance of new Shares during the past 12 months . . . . . . . . . . . . . .	16
Reasons for the Open Offer and use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Maintenance of the listing of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Special Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Procedures for demanding a poll by shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Letter from Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Letter from AsiaVest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Appendix I – Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
Appendix II – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	91

– ii –

DEFINITIONS

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

• “Announcement”

the announcement of the Company dated 15 February 2006 relating to, among other things, the Open Offer

• “Application Form(s)”

the application form(s) for use by the Qualifying Shareholders to apply for the Offer Shares

• “Associates”

has the meaning ascribed to it under the Listing Rules

• “Automatic Result” or Automatic Result Limited, a company incorporated in the British “Underwriter” Virgin Islands with limited liability, which is solely and beneficially owned by Mr Tong and of which Mr Liu is the sole director.

• “Board”

the board of Directors

• “Business Day” a day, other than Saturday, on which banks in Hong Kong are open for business

• “BVI”

the British Virgin Islands

• “CCASS”

• the Central Clearing and Settlement System established and operated by HKSCC

• “CCIF”

CCIF CPA Limited, Certified Public Accountants

• “Company”

• Uni-Bio Science Group Limited (聯康生物科技集團有限公 司 )*, an exempt company incorporated in the Cayman Islands and whose shares are listed on the main board of the Stock Exchange

• “Companies Law”

the Companies Law, Cap.22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands

• “Companies Ordinance”

• Companies Ordinance, Chapter 32 of the Laws of Hong Kong

• “concert parties”

in respect of a person, means parties acting in concert (as defined in the Hong Kong Code on Takeovers and Mergers) with such person in relation to the voting rights of the Shares or the Offer Shares

• “connected person(s)”

has the meaning ascribed to it in the Listing Rules

• “Director(s)”

the director(s) of the Company

* For identification purposes only

– 1 –

DEFINITIONS

• “Existing General Mandate”

the general mandate granted to the Directors at the 2005 AGM to allot, issue or otherwise deal in up to 36,000,000 Shares

• “EGM”

• the extraordinary general meeting of the Company to be convened and held on 17 March 2006 for the purpose of considering and, if thought fit, approving (among other matters) (i) the Open Offer and (ii) the grant of the Special Mandate, the notice of which is set out on pages 91 to 93 of this circular, or any adjournment thereof

• “Excess Application Form(s)”

• the excess application form(s) for use by the Qualifying Shareholders to apply for excess Offer Share(s) not initially taken up under the Open Offer

• “Excluded Shareholders”

• Shareholders whose names appear on the register of members of the Company on the Record Date and whose addresses on such register are in a place outside Hong Kong

• “Group” the Company and its subsidiaries

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

• “Independent Board Committee”

• an independent committee of the Board comprising Messrs Zhou Yao Ming, Lin Jian and So Yin Wai, being all the independent non-executive Directors, appointed to consider and make recommendations to the Independent Shareholders on the Open Offer

• “Independent Financial Adviser” or “AsiaVest”

• AsiaVest Investment Advisory Limited, a licensed corporation to carry on business in types 4, 6 and 9 (advising on securities, advising on corporate finance and asset management) regulated activities under the SFO and the independent financial adviser to the Independent Board Committee

• “Independent Shareholders”

• the Shareholders (other than Automatic Result, its concert parties and its Associates, who are interested or involved in the Open Offer)

• “Independent Third Party”

• a party who is independent of and not connected with any of the directors, chief executives or substantial shareholders of the Company or any of its subsidiaries, or their respective Associates

• “Latest Practicable Date”

• 24 February 2006, being the latest practicable date for ascertaining certain information for inclusion in this circular

– 2 –

DEFINITIONS

“Listing Committee”

the listing sub-committee of the directors of the Stock Exchange elected or appointed in accordance with the articles of association of the Stock Exchange

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Mr Liu” Mr Liu Guoyao, an executive Director and the sole director of Automatic Result

the Rules Governing the Listing of Securities on the Stock Exchange

• “Mr Tong” Mr Tong Kit Shing, the chairman and an executive Director of the Company, and the sole beneficial owner of Automatic Result

• “Offer Shares” 360,000,000 new Shares to be issued pursuant to the Open Offer

• “Open Offer” the proposed issue by the Company of the Offer Shares by way of an open offer at the Subscription Price on the basis of two Offer Shares for every existing Share held on the Record Date pursuant to the Prospectus Documents and summarised in this circular

• “Prospectus” the Open Offer prospectus

• “Prospectus Documents” the Prospectus, the Application Form and the Excess Application Form

• “PRC” the People’s Republic of China, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Qualifying Shareholders” Shareholders whose names appear on the register of members of the Company on the Record Date, other than the Excluded Shareholders

• “Record Date” 17 March 2006, being the date by reference to which entitlements under the Open Offer will be determined

• “REXCAPITAL” REXCAPITAL (Hong Kong) Limited, a licensed corporation to carry on Type 6 regulated activity as defined in schedule 5 to the SFO, being appointed as the financial adviser to the Company in relation to the Open Offer

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

• “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

– 3 –

DEFINITIONS

• “Shareholders(s)”

holder(s) of the Share(s)

• “Special Mandate” a special mandate to allot and issue Shares to be sought from the Shareholders at the EGM to satisfy the allotment and issue of the Offer Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription Price” subscription price of HK$0.50 per Offer Share

• “Subscription Monies” the subscription monies payable by Automatic Result to the Company in respect of the Underwritten Shares

• “Underwriting Agreement” the underwriting agreement dated 14 February 2006 made between the Company and Automatic Result in relation to the Open Offer (as varied, modified and supplemented by a supplemental agreement dated 28 February 2006 entered into between the same parties)

• “Underwritten Shares” up to 170,000,000 Offer Shares underwritten by the Underwriter pursuant to the Underwriting Agreement

• “2005 AGM” the annual general meeting of the Company held on 30 August 2005

• “2005 Interim Report” the interim report of the Company for the six months ended 30 September 2005 and published by the Company on 28 October 2005

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

• “%” per cent.

– 4 –

2006

EXPECTED TIMETABLE

The expected timetable for the Open Offer is set out below:

Last day of dealings in Shares on a cum-entitlement basis . . . . . . . . . . . . . . . . . . . . . . . . Friday, 10 March Commencement of dealings in Shares on an ex-entitlement basis . . . . . . . . . . . . . . . . . . Monday, 13 March Latest time for lodging transfers of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday, 14 March accompanied by the relevant title documents in order to qualify for the Open Offer

Latest time for lodging forms of proxy for the EGM . . . . . . . . . . . . . 10:00 a.m. on Wednesday, 15 March Register of members closed to determine the eligibility of . . . . . . . . . . . . . . . . . . Wednesday, 15 March to Shareholders under the Open Offer Friday, 17 March (both dates inclusive) Record Date for the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 17 March EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Friday, 17 March Despatch of the Prospectus Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 17 March Announcement of results of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 20 March Register of members re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 20 March Latest time for payment for and acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 3 April of the Offer Shares Latest time for the Open Offer to become unconditional . . . . . . . . . . . . . 10:00 a.m. on Thursday, 6 April Announcement of results of the Open Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 7 April Despatch of refund cheques in respect of wholly or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 7 April partly unsuccessful applications for excess Offer Shares Share certificates for Offer Shares to be posted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 7 April Dealing in Offer Shares commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 11 April

Notes:

1. All times in this circular refer to Hong Kong time.

2. Dates or deadlines specified in this circular for events in the timetable for (or otherwise in relation to) the Open Offer are indicative only and may be extended or varied by agreement between the Company and the Underwriter. Any consequential changes to the anticipated timetable will be published by way of press announcements or notified to Shareholders as appropriate.

– 5 –

EXPECTED TIMETABLE

Effect of bad weather on the latest time for acceptance of and payment for the Open Offer

The latest time for acceptance of and payment for the Open Offer will not take place if there is:

• a tropical cyclone warning signal number 8 or above; or

• a “black” rainstorm warning

• (i) in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on Monday, 3 April 2006. Instead the latest time of acceptance of and payment for the Open Offer will be extended to 5:00 p.m. on the same Business Day;

• (ii) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on Monday, 3 April 2006. Instead the latest time of acceptance of and payment for the Open Offer will be re-scheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force at any time before 9:00 a.m. and 4:00 p.m.

If the latest time for acceptance of and payment for the Open Offer does not take place on Monday, 3 April 2006, the dates mentioned in the section headed “Expected timetable” in this circular may be affected. A press announcement will be made by the Company in such event.

– 6 –

LETTER FROM THE BOARD

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(incorporated in the Cayman Islands with limited liability)

(Stock Code: 690)

Executive Directors: Mr Tong Kit Shing (Chairman) Mr Liu Guoyao (Chief Executive Officer) Mr Cheng Wai Man

Independent Non-executive Director: Mr Zhou Yao Ming Mr Lin Jian Mr So Yin Wai

Registered office: Century Yard Cricket Square Hutchins Drive P. O. Box 2681 G.T. George Town Grand Cayman British West Indies

Principal place of business in Hong Kong: Room 2302, 23rd Floor Lippo Centre Tower II 89 Queensway, Admiralty Hong Kong

1 March 2006

To the Shareholders

Dear Sir/Madam

(A) PROPOSED OPEN OFFER OF 360,000,000 OFFER SHARES AT HK$0.50 PER OFFER SHARE PAYABLE IN FULL ON ACCEPTANCE ON THE BASIS OF TWO OFFER SHARES FOR EVERY EXISTING SHARE HELD AND (B) GRANT OF SPECIAL MANDATE

INTRODUCTION

On 15 February 2006, the Company announced that it proposed to raise approximately HK$180,000,000 before expenses by issuing 360,000,000 Offer Shares at a subscription price of HK$0.50 per Offer Share by way of the Open Offer, payable in full on application, on the basis of two Offer Shares for every existing Share held by the Qualifying Shareholders on the Record Date. The Open Offer will not be available to the Excluded Shareholders.

• for identification purposes only

– 7 –

LETTER FROM THE BOARD

The Open Offer is fully underwritten by Automatic Result, the substantial Shareholder, on the terms and subject to the conditions set out in the Underwriting Agreement.

The Company also proposes that a special mandate to issue Shares be granted to the Directors following the approval of the Open Offer at the EGM to satisfy the allotment and issue of the Offer Shares under the Open Offer.

The Independent Board Committee comprising the three independent non-executive Directors, namely Messrs ZhouYao Ming, Lin Jian and So Yin Wai, has been established for the purpose of advising the Independent Shareholders on the terms of the Open Offer.

The Independent Shareholders will be advised by the Independent Board Committee regarding the terms of the Open Offer. AsiaVest has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders on whether the terms of the Open Offer are fair and reasonable so far as the Independent Shareholders are concerned.

The purpose of this circular is to provide you with, among other things, further information on the Open Offer, the grant of the Special Mandate, information on dealings in and acceptance of the Offer Shares and certain financial information in respect of the Group. This circular also contains the recommendation of the Independent Board Committee and the advice of AsiaVest in respect of the Open Offer and the notice of the EGM.

PROPOSED OPEN OFFER

Issue Statistics

Basis of the Open Offer : Two Offer Shares for every existing Share held by each Qualifying Shareholder on the Record Date Number of Shares in issue : 180,000,000 Shares as at the Latest Practicable Date Number of Offer Shares : 360,000,000 Offer Shares Subscription Price : HK$0.50 per Offer Share

As at the Latest Practicable Date, the Company had no outstanding options, warrants or other convertible securities which confer any right to subscribe for, convert or exchange into new Shares and the Company has no intention to issue any Shares, options, warrants or other convertible securities prior to the completion of the Open Offer.

Subscription Price

HK$0.50 per Offer Share, payable in full when a Qualifying Shareholder accepts its/his/her provisional allotment of the Offer Shares under the Open Offer or applies for excess Offer Shares.

– 8 –

LETTER FROM THE BOARD

The Subscription Price represents:

• a discount of approximately 18.0% of the closing price of HK$0.61 per Share as quoted on the Stock Exchange on 13 February 2006 (being the last trading day immediately prior to the Announcement);

• a discount of approximately 18.2% of the average closing price of HK$0.611 per Share based on the daily closing prices as quoted on the Stock Exchange over the last 10 consecutive trading days up to and including 13 February 2006 (being the last trading day immediately prior to the Announcement);

• a discount of approximately 6.9% of the theoretical ex-entitlement price of approximately HK$0.537 per Share based on the aforesaid closing price per Share;

• a discount of approximately 18.3% to the average closing price of HK$0.612 per Share for the last 5 trading days up to and including 13 February 2006 (being the last trading day immediately prior to the Announcement);

• a discount of approximately 32.4% to the closing price of HK$0.74 per Share as quoted on the Stock Exchange as at the Latest Practicable Date; and

• a premium of approximately 19.0% of the audited consolidated net assets value per Share of HK$0.42 as at 31 March 2005.

The Subscription Price was determined after arm’s length negotiations between the Company and the Underwriter, with reference to the market price of the Shares and also other factors such as liquidity and performance of the Shares, the prevailing market conditions and the fact that there are no force majeure provisions in the Underwriting Agreement. The Directors consider that the discount of the Subscription Price to the market price of the Shares is in line with that of other recent rights issues and/ or open offers and the Subscription Price is fair and reasonable so far as the Company and the Shareholders as a whole are concerned.

Qualifying Shareholders

The Company will send the Prospectus Documents to the Qualifying Shareholders only and, for information only, the Prospectus to the Excluded Shareholders.

To qualify for the Open Offer, a Shareholder must (i) be registered as a member of the Company on the Record Date and (ii) have an address in Hong Kong which appears on the register of members of the Company on the Record Date.

In order to be registered as members of the Company on the Record Date and to qualify for the Open Offer, Shareholders must lodge any transfers of Shares (together with the relevant share certificates) with the Company’s share registrar and transfer office in Hong Kong, Abacus Share Registrars Limited, of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong by not later than 4:00 p.m. on Tuesday, 14 March 2006.

– 9 –

LETTER FROM THE BOARD

The invitation to subscribe for the Offer Shares to be made to the Qualifying Shareholders will not be transferable or capable of renunciation and there will not be any trading of nil-paid entitlements of the Offer Shares on the Stock Exchange.

Excluded Shareholders

As at the Latest Practicable Date, none of the Shareholders as recorded on the register of members of the Company had address(es) which is/are outside Hong Kong.

If as at the close of business on the Record Date, a Shareholder’s address as recorded on the register of members of the Company is in a place outside Hong Kong, that Shareholder may not be eligible to take part in the Open Offer as documents to be issued in connection with the Open Offer will not be registered and/or filed under the applicable securities or equivalent legislation of any jurisdictions other than Hong Kong. If necessary, the Board will make enquiries as to whether the issue of the Offer Shares to the Excluded Shareholders may contravene the applicable securities legislation of the relevant overseas places or the requirements of the relevant regulatory body or stock exchange pursuant to Rule 13.36(2)(a) of the Listing Rules. If, after making such enquiry, the Board is of the opinion that it would be necessary or expedient, on account either of the legal restrictions under the laws of the relevant place or any requirement of the relevant regulatory body or stock exchange in that place, not to offer to such Excluded Shareholders, no issue of the Offer Shares will be made to such Excluded Shareholders. Accordingly, the Open Offer will not be extended to the Excluded Shareholders. The Company will send the Prospectus (but not the Application Form or Excess Application Form) to the Excluded Shareholders for their information only. The basis of exclusion of the Excluded Shareholders, if any, from the Open Offer will be disclosed in the Prospectus.

Application for excess Offer Shares

Qualifying Shareholders may apply (by using Excess Application Forms) for entitlements of the Excluded Shareholders and any Offer Shares not taken up by the Qualifying Shareholders.

The Directors will allocate excess Offer Shares at their discretion on a fair and equitable basis. Shareholders or potential investors should note that the number of excess Offer Shares which may be allocated to them may be different where they make applications for excess Offer Shares by different means, such as making applications in their own names as against through nominees who also hold Shares for other Shareholders/investors. Shareholders and investors should consult their professional advisers if they are in any doubt as to whether they should register their shareholding in their own names and apply for the excess Offer Shares themselves.

Status of the Offer Shares

The Offer Shares (when allotted, issued and fully paid) will rank pari passu in all respects with the Shares in issue on the date of allotment and issue of the Offer Shares. Holders of the Offer Shares (when allotted, issued and fully paid) will be entitled to receive all future dividends and distributions which are declared, made or paid on or after the date of allotment and issue of the Offer Shares.

– 10 –

LETTER FROM THE BOARD

Certificates of the Offer Shares

Subject to the fulfilment of the conditions of the Open Offer, certificates for all fully-paid Offer Shares are expected to be posted to those Qualifying Shareholders who have accepted and applied for (where appropriate), and paid for the Offer Shares on or before Friday, 7 April 2006, at their own risks.

Fractions of Offer Shares

Given the Open Offer is made on the basis of two Offer Shares for every existing Share held on the Record Date, there will be no fraction of Offer Shares.

Closure of register of members

The register of members of the Company will be closed from Wednesday, 15 March 2006 to Friday, 17 March 2006 (both days inclusive) to determine the eligibility of Shareholders to the Open Offer. No transfer of Shares will be registered during this period.

Listing and dealings

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Offer Shares. Dealings in the Offer Shares will be subject to the payment of stamp duty in Hong Kong.

None of the securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or is proposed to be sought.

Subject to the granting of the listing of, and permission to deal in, the Offer Shares on the Stock Exchange, the Offer Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Offer Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

UNDERWRITING ARRANGEMENT

Underwriting Agreement

Date	:	14 February 2006
		(as varied, modified and supplemented by a supplemental
		agreement dated 28 February 2006)
Underwriter	:	Automatic Result, the substantial Shareholder
Number of Offer Shares underwritten	:	170,000,000 Offer Shares_(Note)_
Commission	:	Two (2)% of the total Subscription Price of the Offer Shares
		underwritten by the Underwriter.

Note: This figure excludes the pro-rata entitlement of 190,000,000 Offer Shares to be provisionally allotted to Automatic Result in respect of its beneficial shareholding in the Company, which it has undertaken to subscribe for in full pursuant to the Underwriting Agreement.

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LETTER FROM THE BOARD

The entering into of the Underwriting Agreement by the Company with Automatic Result constitutes a connected transaction of the Company under the Listing Rules but is exempted from the reporting, announcement and independent shareholders’ requirements pursuant to Rule 14A.31(3)(c) of the Listing Rules.

Under the terms of the Underwriting Agreement, the Company and Automatic Result agreed that if the conditions of the Open Offer are fulfilled on or before the last day for acceptance of the Open Offer (or such later time and/or date as the Company and Automatic Result may determine) and the Underwriting Agreement becomes unconditional and is not terminated in accordance with the terms thereof, Automatic Result shall subscribe for those Offer Shares which have not been taken up by other Qualifying Shareholders by 10:00 a.m. on the third Business Day after the last day for acceptance of the Open Offer and to pay the relevant Subscription Monies not later than 4:00 pm on the fourth Business Day after the last day for acceptance of the Open Offer.

Undertaking from Automatic Result

As at the Latest Practicable Date, Automatic Result, being the substantial Shareholder, held 95,000,000 Shares, representing approximately 52.78% of the Company’s issued share capital. Pursuant to the Underwriting Agreement and subject to fulfilment of the conditions set out in the Underwriting Agreement, Automatic Result has irrevocably undertaken to the Company that:

• (a) the Shares beneficially owned by it will remain registered in its name from the date of the Announcement to the Record Date;

• (b) it will subscribe for the 190,000,000 Offer Shares that will be allotted to it under the Open Offer on an assured basis; and

• (c) it will underwrite the balance of 170,000,000 Offer Shares.

Information on the Underwriter

The ordinary course of business of Automatic Result is investment holding and does not include underwriting. Mr Tong, an executive Director and the sole beneficial owner of Automatic Result, has confirmed that he will provide adequate financial support to the Underwriter for the latter to fully fulfil and accomplish its duties and obligations of being the underwriter as stipulated by the Underwriting Agreement.

Although Automatic Result has no previous experience in underwriting securities, having considered factors such as the liquidity of the Shares, the size of the Open Offer and the fact that there are no force majeure provisions under the Underwriting Agreement, the Directors are of the view that the entering into of the Underwriting Agreement is beneficial to the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

Conditions of the Open Offer

Pursuant to Rule 7.19(6) of the Listing Rules, since the Open Offer would increase the issued share capital of the Company by more than 50%, the Open Offer is conditional on, among other things, the approval by the Independent Shareholders by a resolution at the EGM on which Automatic Result, the substantial Shareholder, and its Associates shall abstain from voting.

The Open Offer is conditional upon, among other things, the following conditions being fulfilled:

• (1) the Company despatching this circular to the Shareholders containing, among other matters, details of the Open Offer together with proxy form and notice of EGM;

• (2) the passing by the Independent Shareholders at the EGM of ordinary resolutions to approve the Open Offer (including, but not limited to, the exclusion of the offer of the Open Offer to the Excluded Shareholders) by no later than the date of posting of the Prospectus;

• (3) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the listing of and permission to deal in all the Offer Shares (in their fully-paid forms);

• (4) the filing and registration of all documents relating to the Open Offer, which are required to be filed or registered with the Registrar of Companies in Hong Kong in accordance with the Companies Ordinance;

• (5) the posting of the Prospectus Documents to Qualifying Shareholders; and

• (6) compliance with and performance of all the undertakings and obligations of the Company under the terms of the Underwriting Agreement.

Neither the Company nor the Underwriter may waive the conditions (1) to (5) above.

If any of the conditions of the Open Offer are not fulfilled or waived on or before Thursday, 6 April 2006 (or such later time and/or date as the Company and the Underwriter may determine), neither the Company nor the Underwriter shall have any rights or be subject to any obligations arising from the Underwriting Agreement and the Open Offer will not proceed.

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LETTER FROM THE BOARD

Termination of the Underwriting Agreement

The Underwriting Agreement contains provisions granting Automatic Result, by notice in writing, the ability to terminate its obligations thereunder on the occurrence of certain events. Automatic Result may terminate its commitment under the Underwriting Agreement at any time prior to 4:00 p.m. on the third Business Day immediately after the last day for acceptance of the Open Offer if:

• (1) in the reasonable opinion of the Underwriter, the success of the Open Offer would be materially and adversely affected by:

• (a) the introduction of any new regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole or is materially adverse in the context of the Open Offer; or

• (b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing before, and/or after the date hereof), of a political, military, financial, economic or other nature (whether or not ejusdem generic with any of the foregoing), or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position or prospects of the Group as a whole; or

• (c) any materially adverse change in the business or in the financial or trading position or prospects of the Group as a whole; or

• (2) any material adverse change in market conditions (including, without limitation, a change in fiscal or monetary policy or foreign exchange or currency markets, suspension or restriction of trading in securities, and a change in currency conditions for the purpose of this clause includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which in the reasonable opinion of the Underwriter makes it inexpedient or inadvisable to proceed with the Open Offer; or

• (3) this circular or the prospectus in connection with the Open Offer when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may in the reasonable opinion of the Underwriter is material to the Group as a whole and is likely to affect materially and adversely the success of the Open Offer or might cause a prudent investor not to accept the Offer Shares provisionally allotted to it.

If the Underwriting Agreement is terminated by the Underwriter on or before the aforesaid deadline or does not become unconditional, the Open Offer will not proceed.

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LETTER FROM THE BOARD

WARNING OF THE RISKS IN TRADING OF SHARES

The Open Offer is conditional upon the obligations of the Underwriter under the Underwriting Agreement having become unconditional and the Underwriter not having terminated the Underwriting Agreement in accordance with the terms thereof. Shareholders and potential investors should therefore exercise caution when dealing in Shares, and if they are in any doubt about their positions, they should consult their professional advisers.

Shareholders should note that Shares will be dealt in on an ex-entitlement basis commencing from Monday, 13 March 2006 and that dealings in Shares will take place while the conditions to which the Open Offer is subject remain unfulfilled. Any Shareholder or other person dealing in Shares up to the date on which all conditions to which the Open Offer is subject are fulfilled, will accordingly bear the risk that the Open Offer cannot become unconditional and may not proceed. Any Shareholder or other person contemplating selling or purchasing Shares who is in any doubt about his/her/its position is recommended to consult his/her/its own professional adviser.

SHAREHOLDING STRUCTURE

The following table sets out the existing shareholding structure of the Company and the shareholding structure immediately after completion of the Open Offer (assuming two different levels of subscription by Independent Shareholders):

Automatic Result (Note) Automatic Result (as Underwriter) Sub-total: Public shareholders Total	Existing structure No. of shares % 95,000,000 52.78 – – 95,000,000 52.78 85,000,000 47.22 180,000,000 100.00	Shareholding upon completion of the Open Offer (assuming full and nil subscription respectively by Independent Shareholders) No. of No. of shares % shares % 285,000,000 52.78 285,000,000 52.78 170,000,000 31.48 0 0 455,000,000 84.26 285,000,000 52.78 85,000,000 15.74 255,000,000 47.22 540,000,000 100.00 540,000,000 100	Shareholding upon completion of the Open Offer (assuming full and nil subscription respectively by Independent Shareholders) No. of No. of shares % shares % 285,000,000 52.78 285,000,000 52.78 170,000,000 31.48 0 0 455,000,000 84.26 285,000,000 52.78 85,000,000 15.74 255,000,000 47.22 540,000,000 100.00 540,000,000 100
			52.78 47.22
			100

Note: With respect to its entitlement under the Open Offer

As shown in the above table, in the event that the Underwriter is called upon to fulfil its underwriting obligations under the Underwriting Agreement in full, the aggregate shareholding of the Underwriter together with its concert parties (including Mr Tong and Mr Liu) in the issued share capital of the Company as enlarged by the Open Offer would be increased from approximately 52.78% to approximately 84.26% immediately after the Open Offer.

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LETTER FROM THE BOARD

The Company will take all necessary measures to ensure that there is sufficient public float exist in the Company at all times upon completion of the Open Offer.

BUSINESS AND FUTURE PROSPECTS

The Company is principally engaged in the manufacture and trading of packaging products, paper gifts items and promotional products and investment holding.

As disclosed in the 2005 Interim Report, there was a decrease in turnover of about 30% for the six months ended 30 September 2005 as compared with the corresponding period in 2004. As stated in the Company’s announcement dated 4 November 2005, in order to improve the financial performance and position of the Group and to maximize the returns to the Group and the Shareholders as a whole, the Board considers it necessary and appropriate to, in addition to optimizing its operation in the existing business, diversify its existing business into, and explore a broader range of investments and businesses in, industry of relatively high growth and yield such as applied science and technology. With rapid biotechnological advancement and increase in health conscious population generally, the Company is particularly optimistic about the prospects of bio-science related businesses.

As announced by the Company in the Announcement, the Company had in early February this year through Lelion Holdings Limited (its wholly-owned subsidiary incorporated in the BVI) entered into several non-legally binding letters of intent with certain Independent Third Parties in relation to the possible investment in and/or co-operation with these Independent Third Parties with a view of exploring opportunities that have potential to provide synergies with the existing operation and the proposed diversification of the business of the Group.

As at the Latest Practicable Date, the Company has not yet identified or concluded any specific investment and/or business co-operation nor determined the exact form of investment or co-operation with these Independent Third Parties. Further announcement will be made by the Company in compliance with the Listing Rules as and when appropriate.

FUNDS RAISED BY WAY OF ISSUANCE OF NEW SHARES DURING THE PAST 12 MONTHS

During the 12 months prior to the date of this circular, the Company has not raised any form of funding.

REASONS FOR THE OPEN OFFER AND USE OF PROCEEDS

As mentioned in the Announcement, the net proceeds, estimated to be approximately HK$175.5 million, of the Open Offer is intended to be used for the Group’s working capital as well as in one or more of the possible investment(s) and/or business co-operation(s) under negotiations by the Company.

As stated in the 2005 Interim Report, the Group’s unaudited consolidated turnover amounted to about HK$58.6 million, representing a decrease by about 30% as compared with the previous corresponding period, while its gross profit also suffered some 32% decrease as compared with the previous corresponding period. In the recent year, the Group has been facing intense market competition and rising fuel and other direct material costs. As at 30 September 2005, the Group’s bank deposits, bank balances and cash

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LETTER FROM THE BOARD

amounted to approximately HK$20.5 million, while its bank and other borrowings amounted to approximately HK$58.8 million. Notwithstanding the Group’s efforts to optimise its operation in existing business, the Directors consider it necessary to raise funds for its working capital and for laying foundation for its diversification plan in order to achieve improvement for the financial position and operating performance of the Group.

The Open Offer offers existing Shareholders an opportunity to participate in the fund raising exercise in proportion to their shareholdings in the Company. Further, the Open Offer allows the Company to expand its capital base and implement its new business strategy of diversification of the Group’s businesses into industry of higher growth and yield such as applied science and technology, as mentioned in the Company’s announcement dated 4 November 2005 and in the 2005 Interim Report. In addition, the Open Offer allows Qualifying Shareholders to maintain their respective pro rata shareholdings in the Company and participate in the future growth and development of the Company. The Directors (including the independent Directors) therefore believe that the Open Offer is in the interests of the Company and the Shareholders as a whole as compared to other equity fund raising methods such as placement as it is relatively difficult for the Company to secure prospective placees due to the unsatisfactory performance of the Group or rights issue of Shares as it is generally more costly and time consuming and is considered not desirable when the Company is in need of funds for expansion.

The Open Offer is subject to a number of conditions, in particular the Open Offer is subject to the approval by the Independent Shareholders voted at the EGM. Shareholders and other potential investors should therefore exercise extreme caution when dealing in the Shares.

MAINTENANCE OF THE LISTING OF THE SHARES

It is the intention of Automatic Result that the listing of the Shares on the Stock Exchange should be maintained. Accordingly, both the Company and Automatic Result have undertaken to the Stock Exchange, in terms to be agreed with the Stock Exchange, that each of them will take all necessary measures to ensure that there is sufficient public float exist in the Company at all times upon completion of the Open Offer.

The Stock Exchange has stated that, in the event that less than 25% of the Shares are in public hands following the closing of the Open Offer; or if the Stock Exchange believes that a false market exists or may exist in the Shares or that there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares.

SPECIAL MANDATE

The Board was granted the Existing General Mandate at the 2005 AGM to allot, issue and otherwise deal in up to 36,000,000 Shares, representing 20% of the share capital of the Company in issue on the date of the 2005 AGM. The Existing General Mandate has not been exercised at all as at the Latest Practicable Date.

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LETTER FROM THE BOARD

In contemplation of the Open Offer and in order to allow the Company to maintain flexibility in allotting and issuing Shares as and when the Company considers desirable, the Offer Shares will not be issued under the Existing General Mandate but the Company will seek the grant of a Special Mandate (which is in addition to, and will not prejudice nor revoke the Existing General Mandate nor any other mandate(s), if any, which may be granted by the Shareholders prior to the EGM) from the Shareholders to allot and issue the Offer Shares in connection with the Open Offer.

EGM

A notice convening the EGM to be held at Room 2302, 23rd Floor, Lippo Centre Tower II, 89 Queensway, Admiralty, Hong Kong at 10:00 a.m. on Friday, 17 March 2006 is set out on pages 91 to 93 of this circular.

At the EGM, ordinary resolutions will be proposed to approve (i) the Open Offer and (ii) the grant of the Special Mandate. The Open Offer will be made conditional on the approval by the Independent Shareholders by way of poll at the EGM by a resolution on which Automatic Result (the substantial Shareholder and being the underwriter of the Open Offer) and its Associates shall abstain from voting.

A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM in person, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Abacus Share Registrars Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM in person should you so wish.

PROCEDURES FOR DEMANDING A POLL BY SHAREHOLDERS

Article 66 of the articles of association of the Company sets out the following procedure by which Shareholders may demand a poll.

At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless voting by way of a poll is required by the Listing Rules or (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is duly demanded. A poll may be demanded by:

• (i) the chairman of the meeting; or

• (ii) at least three members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or

• (iii) any member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all the members having the right to vote at the meeting; or

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LETTER FROM THE BOARD

• (iv) a member or members present in person or in the case of a member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right; or

• (v) if required by the Listing Rules, by any Director or Directors who, individually or collectively, hold proxies in respect of Shares representing five per cent. (5%) or more of the total voting rights at such meeting.

RECOMMENDATION

The Directors (except for Mr Tong Kit Shing and Mr Liu Guoyao who abstained from voting on the resolutions for approving the Open Offer at the relevant board meeting of the Company) are of the opinion that:

• (a) the Open Offer and the grant of the Special Mandate are fair and reasonable and in the interests of the Company and the Shareholders as a whole; and

• (b) recommend the Independent Shareholders to vote in favour of the resolutions to approve the Open Offer and the grant of the Special Mandate to be proposed at the EGM.

Your attention is drawn to the letter from the Independent Board Committee set out on page 20 of this circular which contains its recommendation to the Independent Shareholders as to voting of the ordinary resolution at the EGM concerning the Open Offer.

Your attention is also drawn to the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders set out on pages 21 to 35 of this circular which contains, among other matters, its advice to the Independent Board Committee in relation to the terms of the Open Offer and the principal factors and reasons considered by it in concluding its advice.

The Independent Board Committee, having taken into account the advice from the Independent Financial Adviser, considers that the terms of the Open Offer are fair and reasonable and in the interests of the Company and its Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the Open Offer and the grant of the Special Mandate to issue the Offer Shares in connection therewith.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information as set out in the appendices to this circular and the notice of the EGM.

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

Chairman

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LETTER FROM INDEPENDENT BOARD COMMITTEE

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(incorporated in the Cayman Islands with limited liability)

(Stock Code: 690)

1 March 2006

To the Independent Shareholders

Dear Sir or Madam,

PROPOSED OPEN OFFER OF 360,000,000 OFFER SHARES OF HK$0.10 EACH AT HK$0.50 PER OFFER SHARE PAYABLE IN FULL ON ACCEPTANCE ON THE BASIS OF TWO OFFER SHARES FOR EVERY EXISTING SHARE HELD ON THE RECORD DATE

We refer to the circular of the Company despatched to its shareholders dated 1 March 2006 (“Circular”) of which this letter forms part. Terms defined in the Circular have the same meanings when used in this letter unless the context otherwise requires.

We, being all the independent non-executive Directors constituting the Independent Board Committee, have been appointed by the Board to consider the Open Offer and to advise the Independent Shareholders as to the fairness and reasonableness of the Open Offer and to recommend whether or not the Independent Shareholders should vote for the resolution to be proposed at the EGM to approve the Open Offer. AsiaVest has been appointed to advise the Independent Board Committee in relation to the terms of the Open Offer.

We wish to draw your attention to the letter from AsiaVest to the Independent Board Committee and the Independent Shareholders set out on pages 21 to 35 of the Circular which contains its advice to us in relation to the Open Offer. We also wish to draw your attention to the Letter from the Board set out on pages 7 to 19 of the Circular.

Having taken into account the advice and recommendation of AsiaVest, we consider the terms of the Open Offer to be fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions set out in the notice convening the EGM to approve, among other things, the Open Offer at the EGM.

Yours faithfully

Zhou Yao Ming Lin Jian So Yin Wai Independent Board Committee of Uni-Bio Science Group Limited

• For identification purposes only

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LETTER FROM ASIAVEST

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from AsiaVest Investment Advisory Limited setting out their opinion regarding the Open Offer for the purpose of inclusion in this circular.

ASIAVEST PARTNERS

AsiaVest Investment Advisory Limited

AsiaVest Investment Advisory Limited Suite 3105, 31/F Alexandra House 16-20 Chater Road Central Hong Kong

1 March 2006

To the Independent Board Committee

and the Independent Shareholders of Uni-Bio Science Group Limited

Dear Sirs/Madam,

PROPOSED OPEN OFFER OF 360,000,000 OFFER SHARES AT HK$0.50 PER OFFER SHARE PAYABLE IN FULL ON ACCEPTANCE ON THE BASIS OF TWO OFFER SHARES FOR EVERY EXISTING SHARE HELD BY QUALIFYING SHAREHOLDERS

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders on the terms of the Open Offer, details of which are set out in the circular to the Shareholders dated 1 March 2006 (the “Circular”), of which this letter forms a part. Terms used in this letter have the same meanings as defined in the Circular unless the context requires otherwise.

AsiaVest has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to give our recommendation as to whether the terms of the Open Offer are fair and reasonable so far as the Shareholders are concerned and whether the Offer is in the interest of the Company and its Shareholders as a whole, and to provide an independent view to the Independent Shareholders to facilitate the decision of their voting.

The Company proposes to raise approximately HK$180,000,000 before expenses by issuing 360,000,000 Offer Shares at a price of HK$0.50 per Offer Share by way of the Open Offer, payable in full on application on the terms set out below. The Company will provisionally allot to the Qualifying Shareholders on the basis of two Offer Shares for every existing Share held by the Qualifying Shareholders as at the Record Date. The Open Offer is not available to the Excluded Shareholders.

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LETTER FROM ASIAVEST

The net proceeds, estimated to be approximately HK$175.5 million, of the Open Offer will be used for the Group’s working capital as well as in one or more of the possible investment(s) and/or business co-operation(s) under negotiations by the Company, details of which are mentioned below.

Automatic Result has agreed to underwrite the Open Offer. As at the Latest Practicable Date, Automatic Result, being the substantial Shareholder, holds 95,000,000 Shares, representing approximately 52.78% of the existing issued share capital of the Company. If Automatic Result is required to subscribe for all the Underwritten Shares pursuant to the Underwriting Agreement, the aggregate shareholding of Automatic Result will increase from approximately 52.78% to approximately 84.26% of the enlarged issued share capital of the Company immediately after the Open Offer.

The Directors had stated that it is the intention of Automatic Result that the listing of the Shares on the Stock Exchange should be maintained. Accordingly, both the Company and Automatic Result have undertaken to the Stock Exchange that each of them will take all necessary measures to ensure that there is sufficient public float exist in the Company at all times upon completion of the Open Offer.

The Open Offer is conditional. In particular, it is subject to, among other matters, the Underwriter not terminating the Underwriting Agreement in accordance with its terms. Accordingly, the Open Offer may or may not proceed. Shareholders and potential investors should therefore exercise caution when dealing with the Shares.

Existing Shares will be dealt with on an ex-entitlement basis commencing from Monday, 13 March 2006. As at the Latest Practicable Date, Automatic Result, being the substantial Shareholder, holds 95,000,000 Shares, representing approximately 52.78% of the existing issued share capital of the Company.

An Independent Board Committee has been formed, comprising the independent Directors of the Company, to advise the Independent Shareholders and we have been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Open Offer.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Directors and management of the Company. We have assumed that all information, representations and opinions contained or referred to in the Circular and all information, representations and opinions which have been provided by the Directors or management of the Company for which they are solely responsible, are true and accurate at the time they were made and will continue to be accurate at the date of the dispatch of the Circular.

We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstances which would render the information provided and representations and opinions made to us untrue, inaccurate or misleading. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe that there are no other facts or representation the omission of which would make any statement in the Circular, including this

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LETTER FROM ASIAVEST

letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and management of the Company, nor have we conducted an independent investigation into the business and affairs of the Company.

We have not considered the taxation implications on the Shareholders in relation to the subscription for, holding or disposal of the Offer Shares or otherwise, since these are unique to their individual circumstances. It is emphasized that we will not accept responsibility for any tax effects on, liabilities of any person resulting from the subscription for, holding or disposal of the Offer Shares or otherwise. In particular, Shareholders subject to Hong Kong taxation on securities dealings should consider their own tax position and, if in any doubt, should consult their own professional advisers.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion as to whether the terms of the Offer are fair and reasonable so far as the Independent Board Committee and the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole, we have considered the following principal factors and reasons:

1. BACKGROUND AND REASONS FOR THE OFFER

Having considered that:

• (i) the Open Offer will strengthen the Group’s capital base and could help enhance its financial and working capital position. In the recent year, the Group has been facing intense market competition and rising fuel and other direct material costs. As at 30 September 2005, the Group’s bank deposits, bank balances and cash amounted to approximately HK$20.5 million, while its bank and other borrowings amounted to approximately HK$58.8 million. Notwithstanding the Group’s efforts to optimize its operation in existing business, it is necessary to raise funds for its working capital and for laying foundation for its diversification plan in order to achieve improvement for the financial position and operating performance of the Group;

• (ii) any further placing of new Shares to third parties will result in further dilution to the shareholdings of the existing Shareholders. In addition, the directors experienced relative difficulty for the Company to secure prospective placees due to the unsatisfactory performance of the Group and to rights issue of Shares as it is generally more costly and time consuming and is considered not desirable when the Company is in need of funds for expansion; and

• (iii) the Open Offer will allow the Qualifying Shareholders to maintain their respective pro rata shareholding interest and to participate in the future growth and development of the Company.

In view of the factors stated, we considered the Open Offer is in the interests of the Company and its Shareholders as a whole.

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LETTER FROM ASIAVEST

2. TERMS OF THE OFFER

Subject to the fulfillment of the conditions of the Open Offer as set out in the letter from the Board in the Circular, Qualifying Shareholders shall have the right to subscribe on the basis of two Offer Shares for every existing Share held as at the Record Date at a subscription price of HK$0.50 per Offer Share.

The Directors advised us that the subscription price of HK$0.50 per Offer Share was arrived at after arm’s length negotiations between the Company and the Underwriter with reference to the market price of the share and also other factors such as liquidity and performance of the Shares, the prevailing market conditions and the fact that there are no force majeure provision in the Underwriting Agreement. The subscription price of HK$0.50 per Offer Share represents:

• (a) a discount of approximately 18.0% of the closing price of HK$0.61 per Share as quoted on the Stock Exchange on 13 February 2006 (being the last trading day immediately prior to the Announcement);

• (b) a discount of approximately 18.2% of the average closing price of HK$0.611 per Share based on the daily closing prices as quoted on the Stock Exchange over the last 10 consecutive trading days up to and including 13 February 2006 (being the last trading day immediately prior to the Announcement);

• (c) a discount of approximately 6.9% of the theoretical ex-entitlement price of approximately HK$0.537 per Share based on the aforesaid closing price per Share;

• (d) a discount of approximately 18.3% to the average closing price of HK$0.612 per Share for the last 5 trading days up to and including 13 February 2006 (being the last trading day immediately prior to the Announcement); and

• (e) a premium of approximately 19.0% of the audited consolidated net assets value per Share of HK$0.42 as at 31 March 2005

3. POTENTIAL USE OF PROCEEDS

In early February of 2006, the Company has through Lelion Holdings Limited, its wholly-owned subsidiary, entered into several non-legally binding letters of intent with certain Independent Third Parties (each a “Target” and together, the “Targets”) in relation to the possible investment in or cooperation with one or more of these Targets with a view of exploring opportunities that have potential to provide synergies with the existing operation and the proposed diversification of the business of the Group as stated in the interim results announcement of the Company dated 28 October 2005.

As no detailed negotiation has been held with these Targets, the exact form of investment or cooperation is yet to be determined. The letters of intent should, therefore, not be taken as any form of commitment on the part of either the Company or any of the Targets to proceed with any transaction.

– 24 –

LETTER FROM ASIAVEST

The Directors consider that the possible investment or business co-operation represents a good opportunity for the Company to further diversify the scope of its business and the revenue base, and in view of the decreasing profitability recently experienced, the plan is in line with the business strategy formulated.

Nevertheless, Shareholders should beware that the discussions is non-legally binding in nature and the possible investment or business co-operation may or may not proceed. Should there be any failure in the implementation of the diversification plan, the business strategy will be affected and might required revision. The Directors advised that they will try their best to conclude the negotiation, and will keep the Shareholders informed of the progress. In the event that the possible investment or business co-operation does not materialise, the proceeds of the Open Offer will be retained for future investments that will align with the business strategy.

The Directors have confirmed that they are fully aware of the risks involved in the Company’s strategy plan and they will exercise necessary and due care in assessing any business opportunities, and will work towards minimising the risks associated with such strategy. We consider that such risks inherent to business opportunities are unavoidable and the measures undertaken by the Directors are reasonable.

We are of the opinion that the proceeds of the Open Offer can facilitate the Company to carry out the intended business with internal capital. In addition, internal capital by nature is least affected by market conditions and funding cost fluctuation and therefore is in the best interest of the Company and the Shareholders as a whole.

– 25 –

LETTER FROM ASIAVEST

4. SHARE PRICE PERFORMANCE

We set out below the average closing price per Share, the highest trading price per Share and the lowest trading price per Share as quoted on the Stock Exchange for each of the months during the twelve months ended on the Latest Practicable Date (“the Review Period”):

		Adjusted average
		daily closing
		price per Share
		in the period
	Average	being premium/
	daily	(discount) to	**Highest closing **	Lowest closing
	closing	the Subscription	price per	price per
	price per	Price of HK$0.50	Share in	Share in
Period	Share	per Share	the period	the period
	(app. HK$)	(%)	(HK$)	(HK$)
2005
February	0.5471	9.42	0.6000	0.5000
March	0.5433	8.66	0.6000	0.5000
April	0.5085	1.70	0.5100	0.5000
May	0.5150	3.00	0.5200	0.4800
June	0.4811	(3.78)	0.5000	0.4000
July	0.5000	0	0.5000	0.5000
August	0.4985	(0.30)	0.5000	0.4900
September	0.7414	48.28	1.2000	0.5900
October	0.5955	19.10	0.6100	0.5600
November	0.6264	25.28	0.7000	0.5600
December	0.6330	26.60	0.8100	0.5600
2006
January	0.5984	19.68	0.6000	0.5800
February	0.6538	30.76	0.7700	0.5500
Note 1

Source: website of the Stock Exchange

Note 1: up to and including the Latest Practicable Date

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LETTER FROM ASIAVEST

The following chart illustrates the average closing price of the Shares on the Stock Exchange versus the Subscription Price:

Average Daily Closing Price

==> picture [424 x 141] intentionally omitted <==

----- Start of picture text -----

1.0
0.9
0.8
0.7
0.6
Offer Price $0.50
0.5
0.4
0.3
0.2
Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb-
05 05 05 05 05 05 05 05 05 05 05 06 06
SMAVG on close (10 days) = [HK$0.687]
Sources: Website of the Stock Exchange
HK$
----- End of picture text -----

The chart below illustrates the trading volume of the Shares during the twelve months ended on the Latest Practicable Date.

Trading Volume

==> picture [420 x 182] intentionally omitted <==

----- Start of picture text -----

50,000
45,000
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Feb-05 Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06
('000)
No. of Shares
----- End of picture text -----

Sources: Website of the Stock Exchange

We note that during the Review Period, the average daily closing prices of the Shares were trading at a premium of an average of approximately 18% over the offer price of HK$0.50 for an extended period. The trading volumes of the Shares were relatively low with monthly turnover of no more than 5 million Shares. During the month of September, 2005, it registered an exceptional high volume of trading and a marked increase of share price of the Company due to the reason that the previous majority shareholder of the Company sold his controlling shares to Automatic Result. In summary, the shares were not too actively traded and the price of the Company’s share, resulting from the adverse financial performance of the past, remained relatively stable and traded at an average of approximately 18% over the Open Offer price. Our assessment on the fairness and reasonableness of the Subscription Price is set out in sections 5 and 7 below.

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LETTER FROM ASIAVEST

5. COMPARISON WITH RECENT OPEN OFFERS BY LISTED COMPANIES IN HONG KONG

We have reviewed and included, so far as we are aware, the following companies listed on the Main Board and the GEM Board of the Stock Exchange which have announced open offer during the period from 1 January 2005 up to and including 13 February 2006, being the last trading day of the Shares on the Stock Exchange prior to the Announcement (the “Period”). We consider using the reference within the entire year of 2005 and the first one and a half month of 2006 appropriate for assessing the reasonableness of the pricing of the Open Offer. Based on publicly available information, the open offers of 14 companies listed on the Main Board and the GEM Board of the Stock Exchange (the “Comparable Companies”) announced during the Period, are summarised in the following two tables below:

Table A

					Closing price
					of shares on
					the last trading
					day prior to	Closing price	Theoretical
	Name of the company	Date of	Offer	Subscription	the date of	on the last	ex-entitlement
	(Stock Code)	announcement	Ratio	price	announcement	trading day	price
				(in HK$)	(in HK$)	(in HK$)	(in HK$)
1	MAXX Bioscience Holdings Ltd. (512)	6 January 2005	2 for 1	0.110	0.188	0.176	0.136
2	Xin Corporation Ltd. (1141)	14 January 2005	1 for 2	0.040	0.054	0.059	0.049
3	Northern Int’l Holdings Ltd. (736)	28 January 2005	1 for 1	0.020	0.030	0.295	0.025
4	Haywood Investment Ltd. (905)	7 February 2005	1 for 1	0.065	0.138	0.095	0.101
5	Orient Industries Holdings Ltd (353)	21 February 2005	1 for 2	0.200	0.050	0.054	0.040
6	Omnicorp Ltd. (94)	7 April 2005	1 for 2	0.380	1.030	1.004	0.813
7	Ngai Hing Hong Co., Ltd (1047)	11 May 2005	1 for 5	0.600	0.640	0.664	0.633
8	U-Right Int’l Holdings Ltd. (627)	23 May 2005	1 for 2	0.250	0.365	0.364	0.327
9	Sino Gas Group Ltd. (260)	30 May 2005	2 for 1	0.020	0.039	0.054	0.026
10	Shang Hua Holdings Ltd. (371)	7 July 2005	1 for 2	0.100	0.600	0.625	0.433
11	Gorient Holdings Ltd. (729)	5 August 2005	3 for 1	0.100	0.250	0.303	0.138
12	United Power Investment Ltd. (674)	29 August 2005	1 for 1	0.150	0.460	0.484	0.305
13	ePro Ltd. (8086)	17 November 2005	1 for 2	0.130	0.160	0.148	0.150
14	Satellite Device Ltd (8172)	25 November 2005	3 for 1	0.065	0.075	0.081	0.068
15	The Company (690)	15 February 2006	2 for 1	0.500	0.610	0.611	0.537

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LETTER FROM ASIAVEST

Table B

Benchmark of percentages

			Discount of
			subscription
			price to
			closing price	Discount of
		Discount of	for the last	Subscription
		subscription	10 trading days	Price to
		price to	up to and	theoretical
	Name of the company	closing	including	ex-entitlement	Underwriting
	(Stock Code)	price	13 Feb 2006	price	Commissions
					(%)
1	MAXX Bioscience Holdings Ltd. (512)	41.50	37.50	19.10	1.25
2	Xin Corporation Ltd. (1141)	25.90	32.10	18.90	2.50
3	Northern Int’l Holdings Ltd. (736)	33.30	31.30	20.00	2.00
4	Haywood Investment Ltd. (905)	52.90	54.50	35.60	2.00
5	Orient Industries Holdings Ltd (353)	60.00	63.24	50.00	2.50
6	Omnicorp Ltd. (94)	63.10	62.20	53.30	2.50
7	Ngai Hing Hong Co., Ltd (1047)	6.25	9.64	5.21	1.00
8	U-Right Int’l Holdings Ltd. (627)	31.50	31.22	23.48	2.00
9	Sino Gas Groupd Ltd. (260)	48.70	62.50	23.10	3.00
10	Shang Hua Holdings Ltd. (371)	83.00	84.00	77.00	2.50
11	Gorient Holdings Ltd. (729)	60.00	67.00	27.54	2.00
12	United Power Investment Ltd. (674)	67.39	69.01	32.74	1.50
13	ePro Ltd. (8086)	18.75	12.16	13.33	Fixed N/A
14	Satellite Device Ltd (8172)	13.30	19.80	3.70	2.50
	Highest	83.00	84.00	77.00	3.00
	Lowest	6.25	9.64	3.70	Fixed
	Mean/Average	43.26	45.44	28.78	2.10
	Medium	41.50	37.50	23.48	2.00
	Upper Quartile (Average) Note 1	71.16	73.34	60.10	2.67
	Lower Quartile (Average) Note 2	16.05	18.23	10.28	1.44
	The Company (690)	18.00	18.30	6.90	2.00

Note 1 & 2

Upper Quartile represents the average highest discount percentage of 3 listed comparables Lower Quartile represents the average lowest discount percentage of 4 listed comparables

– 29 –

LETTER FROM ASIAVEST

The Directors advised that, given the offer basis of the Open Offer and the amount of proceeds to be raised, they have negotiated and priced the discount offer within the lower quartile of the benchmark of percentages of the Comparable Companies as illustrated above, in order to be for the best interest of the Company and the Shareholders.

In addition, we have considered the characteristics of an Open Offer as illustrated in section 6, particularly the rights of Qualifying Shareholders to make excess application to increase or even up their investments, the offer price set at low discount over the market price resulted in a fair and equitable basis for all Shareholders and would not be exceptionally beneficial to institutional shareholders or the Underwriter who would have greater financial capability to take up the excess or the underwritten shares.

From the above, we note that the respective discounts of the Subscription Price of HK$0.50 per Offer Share under the Open Offer to the adjusted closing price per Share on the latest trading day prior to the date of the Announcement at 18.3% and the theoretical ex-rights price per Share at 6.9%, fall within the lowest discount ranges of the Comparable Companies and the discounts offered are comparatively favorable to the Company relative to the other market practices.

On such basis, we are of the opinion that the Subscription Price of HK$0.50 per Offer Share is acceptable to all Shareholders and, therefore, the subscription price is also fair and reasonable to the Independent Shareholders.

6 CHARACTERISTIC OF AN OPEN OFFER

An Open Offer, also known as an entitlement issue, is often in the context of an offer made by a listed company to its shareholders inviting them to subscribe to new shares in the company at a set price, which is normally lower than the current market price.

The purpose, as with a rights issue, is to raise new capital for the company. Unlike a right issue, rights to an open offer cannot be traded or sold on by the shareholder. If a shareholder decided not to take up his/her entitlement, it lapses. If a shareholder’s application is scaled back by the company, he or she will be repaid funds for the shares not actually issued.

Such characteristics facilitate the followings:-

• (1) An open offer is made on a pre-emptive, pro-rata basis, this would allow qualifying shareholders to maintain their respective pro-rata shareholdings in the company and not to suffer theoretical dilutions;

• (2) An open offer did not discriminate in favor of institutional investors and against independent minority shareholders;

• (3) An open offer would not allow any intention to depress the market price by pricing at a steep discount at the expense of existing shareholders, which most often occurred in placement to third parties, because the subscription price offer to purchase further shares by the existing shareholders is in proportion to their holdings; and

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LETTER FROM ASIAVEST

• (4) Apart from the circumstances that the existing independent shareholders do not take up the offer or the excess application allowances to even up their investment in the company, the underwriter, being a connect person would result in obtaining further interest at the subscription price offered which might cause long-term damage to the liquidity of the company concerned by creating a narrower shareholder base. Nevertheless, the requirement of the Hong Kong Stock Exchange for listed companies to maintain a 25% public float alleviates the possibility of narrower shareholder base.

However, rights issue may require higher administrative expenses (i.e. the need to set up trading mechanism for nil-paid rights), and longer time frame to complete the transaction because of the allowance given to the trading of the right scripts. In order to save the cost of funding for the Group and for administrative convenience, we are of the opinion that the Open Offer allows all the Qualifying Shareholders an equal opportunity to participate in the enlargement of the capital base of the Company and enables the Qualifying Shareholders to maintain their proportionate interest in the Company and to continue to participate in the future development of the Company should they wish to do so. In addition, since the Open Offer was priced at such a low discount to theoretical ex-entitlement price, the price for the Rights coupon shall be minimal.

Accordingly, we consider that the method of Open Offer taken by the Company is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

7. UNDERWRITING AGREEMENT

• Date : 14 February 2006 (as varied, modified or supplemented by a supplemental agreement dated 28 February 2006)

• Underwriter : Automatic Result, which is solely and beneficially owned by Mr. Tong

• Total number of : 360,000,000 Offer Shares (which includes the pro-rata Open Shares entitlement of 190,000,000 Offer Shares to be provisionally Underwritten allotted to Automatic Result in respect of its beneficial shareholding in the Company for which Automatic Result has undertaken to subscribe in full pursuant to the Underwriting Agreement)

• Underwriting Commission : Two (2)% of the aggregate Subscription Price of the number of Offer Shares underwritten by the Underwriter, which is determined after arm’s length negotiation between the Company and the Underwriter. The Board considers that the underwriting commission accords with the market rate and is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

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LETTER FROM ASIAVEST

Automatic Result has irrevocably undertaken to the Company that:

• (a) the Shares beneficially owned by it will remain registered in its name from the date of the Announcement to the Record Date;

• (b) it will subscribe for the 190,000,000 Offer Shares that will be allotted to it under the Open Offer on an assured basis; and

• (c) it will underwrite the balance of 170,000,000 Offer Shares.

The ordinary course of business of Automatic Result is investment holding and does not include underwriting. Mr. Tong, an executive Director and the sole beneficial owner of Automatic Result, has confirmed that he will provide adequate financial support to the Underwriter for the latter to fully fulfill and accomplish its duties and obligations of being the underwriter as stipulated by the Underwriting Agreement.

Underwriting fee

In addition to the underwriting commission, the Company shall pay to the Underwriter such out-of-pocket and other expenses reasonably and properly incurred by the Underwriter in connection with the Underwriting Agreement.

Termination of the Underwriting Agreement

If (a) any of the conditions to the Underwriting Agreement are not fulfilled on or before Thursday, 6 April 2006 or shall become incapable of being fulfilled on or before such time or date, or such later date as the Company and the Underwriter may agree in writing, or (b) any of the terms of the Underwriting Agreement is breached in any material respect on the part of the Company, the Underwriter shall have the right to terminate the Underwriting Agreement by written notice upon which the obligations of the Underwriter and the Company under the Underwriting Agreement shall terminate and cease and no party shall have any claim against any other party in respect of any matter or thing arising out of or in connection with the Underwriting Agreement save in respect of any antecedent breach of any obligation under the Underwriting Agreement.

Although Automatic Result has no previous experience in underwriting securities, having considered factors such as the liquidity of the Shares, the size of the Open Offer and the fact that there are no force majeure provisions under the Underwriting Agreement. Therefore, the entering into of the Underwriting Agreement is beneficial to the Company and the Shareholders as a whole.

Table B of Section 5 illustrated 14 Open Offers with underwriting fees ranges from a high of 3% to an average fee of 2.1%. We also noticed that out of the 14 Open Offers, 9 of which had an underwriting fee of 2% and above, representing the majority of the illustrates.

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LETTER FROM ASIAVEST

Given that the underwriting fee was negotiated at arms-length and in line with those Comparable Companies in Section 5 above, we considered the amount of 2% offered is reasonable.

8. FINANCIAL EFFECTS OF THE OFFER

(i) Net tangible assets

As disclosed in the Company’s 2005 Interim Report, the unaudited consolidated net asset value of the group was approximately HK$61.1 million. In view of the estimated net proceeds from the Open Offer will be approximately HK$175.5 million, the Group’s consolidated net asset value will be greatly enhanced as a result of the Open Offer accordingly.

As provided and set out on page 78 in Appendix I to the Circular by the Company, immediately following the completion of the Open Offer, the unaudited pro forma consolidated net tangible assets of the Group is estimated to increase from approximately HK$54.5 million as illustrated in the interim statements, to approximately HK$230.0 million, representing an increase of approximately 322%.

(ii) Gearing Ratio

As disclosed in the Appendix I to the Circular under the paragraph named “Indebtedness”, the Group had a borrowing level as at 30 September 2005 of HK$58.8 million. It is expected that the Open Offer will improve significantly the Group’s gearing level.

(iii) Liquidity

Total current assets and total current liability of the Group as at 30 September, 2005 were reported as approximately HK$100.3 million and approximately HK$80.9 million respectively. Accordingly, the current ratio (being current assets/current liabilities) as at 30 September, 2005 is about 1.24 times. The net proceeds from the Open Offer is expected to enhance its current asset value and thus improve the current ratio and the financial capability of the Company to look for expanded business opportunities accordingly.

The Open Offer will enhance the working capital position with no adverse impact on the gearing level of the Group. Therefore, we concur with the Directors’ view that the Open Offer, priced at such discount percentage, is in the interests of the Company and the Shareholders as a whole.

– 33 –

LETTER FROM ASIAVEST

9. DILUTION EFFECT ON SHAREHOLDINGS

We set out below a table showing the shareholding structure of the Company immediately before and after the completion of the Offer assuming two different levels of subscription by Independent Shareholders.

Automatic Result_(Note)_ Automatic Result (as Underwriter) Sub-total: Public shareholders Total	Existing structure No. of Shares % 95,000,000 52.78 – – 95,000,000 52.78 85,000,000 47.22 180,000,000 100.00	Shareholding upon completion of the Open Offer (assuming full and nil subscription respectively by Independent Shareholders) 100% 0% No. of shares % No. of shares % 285,000,000 52.78 285,000,000 52.78 170,000,000 31.48 0 0 455,000,000 84.26 285,000,000 52.78 85,000,000 15.74 255,000,000 47.22 540,000,000 100.00 540,000,000 100.00	Shareholding upon completion of the Open Offer (assuming full and nil subscription respectively by Independent Shareholders) 100% 0% No. of shares % No. of shares % 285,000,000 52.78 285,000,000 52.78 170,000,000 31.48 0 0 455,000,000 84.26 285,000,000 52.78 85,000,000 15.74 255,000,000 47.22 540,000,000 100.00 540,000,000 100.00
			52.78 47.22
			100.00

Note: with respect to its entitlement under the Open Offer

As shown in the above table, in the event that the Underwriter is called upon to fulfill its underwriting obligations under the Underwriting Agreement in full, the aggregate shareholding of the Underwriter together with its concert parties (including Mr Tong and Mr Liu) in the issued share capital of the Company as enlarged by the Open Offer would be increased from approximately 52.78% to approximately 84.26% immediately after the Open Offer. The Company and Automatic Result will take all necessary measures to ensure that there is sufficient public float of the Shares at all times upon completion of the Open Offer.

Having considered the characteristic of an open offer and the above factors, we are of the opinion that the potential dilution effect of the open offer is acceptable to the Independent Shareholders because the open offer allows them to even up their investment in the Company while the offered Subscription Price is similar to all parties concerned.

RECOMMENDATION

Taking into account that:

• (i) the Open Offer will strengthen the Group’s capital base while it could help to enhance its financial and working capital position, so as to allow the Group to grasp good investment opportunities with immediately available fund should appropriate chance arise under the current favourable market outlook;

– 34 –

LETTER FROM ASIAVEST

• (ii) other funding alternatives such as further placing of new Shares to third parties and further borrowings from connected person will result in, respectively, further dilution to the shareholdings of the existing Independent Shareholders and extra exposure to a higher gearing position of the Company;

• (iii) as discussed in details under the sub-heading “Comparison with recent open offers by listed companies in Hong Kong”, the Subscription Price of HK$0.50 per Offer Share under the Open Offer and accordingly, the discount carried by the Subscription Price to the adjusted closing price per Share on the last trading day immediately prior to the Announcement and the theoretical ex-rights price per Share, as compared with the market comparables, is acceptable to the Independent Shareholders; and

• (iv) the Open Offer is extended to all the Qualifying Shareholders and equal opportunity to participate in the enlargement of the capital base of the Company and enables the Qualifying Shareholders to maintain their proportionate interests in the Company and to participate in the growth of the Company should they wish to.

We consider the terms of the Open Offer to be fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Independent Shareholders as a whole. We would therefore advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to approve the proposed Open Offer at the EGM.

We have noticed that the share price of the Company improved since the resumption of trading took place following the Announcement. We are not in any position to predict that the share price can and will maintain at this level, increase or decrease in the future. Under such circumstances, we recommend the Independent Shareholders who wish to take up part or all of their entitlements under the Open Offer to closely monitor the market price of the Shares during the period until the last day of acceptance of the Offer Shares, which is expected to be on 3 April 2006. Nevertheless, we are bringing to the attention of the Shareholders of the possible scenario and the statement has not altered our recommendation as stated above.

Yours faithfully,

For and on behalf of

AsiaVest Investment Advisory Limited Raymond Lo CF Executive Director

– 35 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. SHARE CAPITAL

The authorised and issued share capital of the Company at the Latest Practicable Date were as follows:

Authorised: 2,000,000,000 Shares as at the Latest Practicable Date Issued and fully paid: 180,000,000 Shares as at the Latest Practicable Date	HK$ 200,000,000
	18,000,000

All the Shares in issue and Offer Shares to be issued rank and will rank pari passu in all respects with each other including as regards to dividends, voting and return of capital.

As at the Latest Practicable Date, the Company had no derivatives, options, warrants and conversion rights or other similar rights which are convertible into Shares.

Save as disclosed in this circular, no share or loan capital of the Company or any member of the Group has been put under option or agreed conditionally or unconditionally to be put under option and no warrant or conversion right affecting the shares has been issued or granted or agreed conditionally, or unconditionally to be issued or granted.

The Shares are listed on the Stock Exchange. No part of the securities of the Company is listed or dealt in, nor is listing or permission to deal in the securities of the Company being or proposed to be sought, on any other stock exchange.

– 36 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

2. SUMMARY OF FINANCIAL INFORMATION OF THE GROUP

The following tables summarise the results, assets, liabilities and minority interests of the Group for the last three financial years, as extracted from the published audited financial statements for the three years ended 31 March 2005.

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Turnover Cost of sales Gross profit Other revenues Distribution costs Administrative expenses Operating profit/(loss) Finance costs Profit/(loss) before taxation Taxation Profit/(loss) after taxation Minority interests Loss attributable to shareholders Dividends Basic loss per share

For the year ended 31 March 2005 2004 2003 HK$’000 HK$’000 HK$’000 134,270 146,239 156,042 (102,610) (121,221) (120,224) 31,660 25,018 35,818 2,345 4,294 1,959 (5,592) (7,110) (7,981) (23,267) (30,131) (30,352) 5,146 (7,929) (556) (4,483) (5,799) (3,474) 663 (13,728) (4,030) (87) (4,495) (1,231) 576 (18,223) (5,261) (663) (657) (123) (87) (18,880) (5,384) – – – HK cents HK cents HK cents (0.05) (10.5) (3.0)

– 37 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED BALANCE SHEET

Non-current assets Deferred tax assets Goodwill Fixed assets Current assets Inventories Trade receivables Other receivables, deposits and prepayments Taxation recoverable Pledged bank deposits Bank balances and cash Current liabilities Trade payables Accrued charges and other payables Due to a related company Taxation payable Current portions of non-current liabilities Trust receipt loans Bank overdrafts, secured Net current assets Total assets less current liabilities Non-current liabilities Borrowings Deferred tax liabilities Total assets and liabilities Capital and reserves: Share capital Reserves Shareholders’ funds Minority interests	2005 HK$’000 139 6,538 80,839 87,516 --------------- 19,824 31,996 35,594 103 6,170 1,911 95,598 --------------- 33,357 7,826 – 539 33,117 1,960 12,748 89,547 --------------- 6,051 93,567 7,076 9,961 17,037 76,530 18,000 57,555 75,555 975 76,530	As at 31 March 2004 2003 HK$’000 HK$’000 315 – 9,154 11,899 100,432 104,069 109,901 115,968 --------------- --------------- 24,147 22,738 35,553 41,914 38,367 24,003 104 1,768 3,600 3,500 1,032 2,072 102,803 95,995 --------------- --------------- 42,196 21,183 8,857 8,834 999 276 349 1,060 29,800 35,671 6,844 10,191 13,471 15,997 102,516 93,212 --------------- --------------- 287 2,783 110,188 118,751 22,912 18,514 10,149 4,894 33,061 23,408 77,127 95,343 18,000 18,000 58,515 77,388 76,515 95,388 612 (45) 77,127 95,343

– 38 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. AUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following is the financial statements for the Group for the year ended 31 March 2005 and 31 March 2004, together with the accompany notes as extracted from the annual report of the Company for the year ended 31 March 2005.

CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the year ended 31st March 2005

Note Turnover 3 Cost of sales Gross profit Other revenues 3 Distribution costs Administrative expenses Operating profit/(loss) 4 Finance costs 5 Profit/(loss) before taxation Taxation 6 Profit/(loss) after taxation Minority interests Loss attributable to shareholders Dividends 8 Basic loss per share 9	2005 HK$’000 134,270 (102,610) 31,660 2,345 (5,592) (23,267) 5,146 (4,483) 663 (87) 576 (663) (87) – (0.05 cents)	2004 HK$’000 146,239 (121,221) 25,018 4,294 (7,110) (30,131) (7,929) (5,799) (13,728) (4,495) (18,223) (657) (18,880) – (10.5 cents)

– 39 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED BALANCE SHEET

For the year ended 31st March 2005

Note Non-current assets Deferred tax assets 24 Goodwill 12 Fixed assets 13 Current assets Inventories 15 Trade receivables 16 Other receivables, deposits and prepayments Taxation recoverable Pledged bank deposits Bank balances and cash 17 Current liabilities Trade payables 18 Accrued charges and other payables Due to a related company 19 Taxation payable Current portion of non-current liabilities 20 Trust receipt loans Bank overdrafts, secured 26 Net current assets Total assets less current liabilities Financed by: Share capital 21 Reserves 23 Shareholders’ funds Minority interests Non-current liabilities 20 Deferred tax liabilities 24	2005 HK$’000 139 6,538 80,839 87,516 ---------------- 19,824 31,996 35,594 103 6,170 1,911 95,598 ---------------- 33,357 7,826 – 539 33,117 1,960 12,748 89,547 ---------------- 6,051 93,567 18,000 57,555 75,555 975 7,076 9,961 93,567	2004 HK$’000 315 9,154 100,432
		109,901 ---------------- 24,147 35,553 38,367 104 3,600 1,032
		102,803 ---------------- 42,196 8,857 999 349 29,800 6,844 13,471
		102,516 ---------------- 287
		110,188
		18,000 58,515
		76,515 612 22,912 10,149
		110,188

– 40 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

BALANCE SHEET

For the year ended 31 March 2005

Note Non-current assets Interests in subsidiaries 14 Current assets Dividend receivable Other receivables Bank balances and cash Current liabilities Other loan, secured 20 Other payables Net current (liabilities)/assets Total assets less current liabilities Financed by: Share capital 21 Reserves 23 Shareholders’ funds	2005 HK$’000 106,627 ---------------- – 181 1,052 1,233 ---------------- 6,000 691 6,691 ---------------- (5,458) ---------------- 101,169 18,000 83,169 101,169	2004 HK$’000 100,770 ---------------- 2,000 5 1,044
		3,049 ---------------- – 1,268
		1,268 ---------------- 1,781 ---------------- 102,551
		18,000 84,551
		102,551

– 41 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2005

Note Total equity at the beginning of year Exchange differences arising on translation of the financial statements of overseas subsidiaries 23 Net gain not recognized in the profit and loss account Valuation released upon disposal of leasehold land and building and plant and machinery Loss attributable to shareholders 23 Total equity at the end of year	2005 HK$’000 76,515 – – ---------------- (873) (87) 75,555	2004 HK$’000 95,388 7 7 ---------------- – (18,880) 76,515

– 42 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 March 2005

Note Operating activities Net cash inflow generated from operations 25(a) Interest paid Hong Kong profits tax refund Hong Kong profits tax paid Net cash inflow from operating activities Investing activities Purchase of fixed assets Sales of fixed assets Interest received Net cash inflow from investing activities Financing activities Bank deposits pledged New bank and other loans 25(b) Repayment of bank and other loans 25(b) Capital elements of finance lease rental payments 25(b) Interest elements of finance lease rental payments Dividends paid to minority shareholders by a subsidiary 25(b) Net cash outflow from financing activitie Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of year Effect of foreign exchange rate changes 23 Cash and cash equivalents at the end of year Analysis of balances of cash and cash equivalents Bank balances and cash Bank overdrafts Trust receipt loans	2005 HK$’000 19,401 (3,388) 574 (482) 16,105 ---------------- (5,246) 12,573 72 7,399 ---------------- (2,570) 21,509 (23,309) (11,253) (1,095) (300) (17,018) ---------------- 6,486 (19,283) – (12,797) 1,911 (12,748) (1,960) (12,797)	2004 HK$’000 18,762 (4,826) 2,310 (912) 15,334 ---------------- (3,159) 4,426 86 1,353 ---------------- (100) 48,015 (50,252) (8,551) (973) – (11,861) ---------------- 4,826 (24,116) 7 (19,283) 1,032 (13,471) (6,844) (19,283)

– 43 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 March 2005

1. Principal Accounting Policies

The principal accounting policies adopted in the preparation of these financial statements are set out below:

(a) Basis of preparation

The financial statements have been prepared in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Institute of Certified Public Accountants. The financial statements have been prepared under the historical cost convention except that, as disclosed in the accounting policies below, certain leasehold land and buildings and plant and machinery are stated at open market valuation.

• (b) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 March 2005.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; has the power to govern the financial and operating policies; to appoint or remove the majority of the members of the board of directors; or to cast majority of votes at the meetings of the board of directors.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss account from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All significant intercompany transactions and balances within the Group are eliminated on consolidation.

The gain or loss on disposal of a subsidiary represents the difference between the proceeds of the sale and the Group’s share of its net assets together with any unamortized goodwill or goodwill taken to reserves and which was not previously charged or recognised in the consolidated profit and loss account.

Minority interests represent the interests of outside shareholders in the operating results and net assets/ liabilities of subsidiaries.

In the Company’s balance sheet the investments in subsidiaries are stated at cost less provision for impairment losses. The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable.

• (c) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired subsidiaries at the date of acquisition.

In accordance with Statement of Standard Accounting Practice (“SSAP”) 30, goodwill on acquisitions occurring on or after 1st January 2001 is included in intangible assets and is amortised using the straightline method over its estimated useful life but not exceeding 20 years. Goodwill on acquisitions, which occurred prior to 1st January 2001 was written off against reserves. The Group has taken advantages of the transitional provision 1(a) in SSAP 30 and goodwill previously written off against reserves has not been restated. However, any impairment arising on such goodwill is accounted for in accordance with SSAP 31.

Where an indication of impairments exists, the carrying amount of any goodwill, including goodwill previously written off against reserves, is assessed and written down immediately to its recoverable amount.

– 44 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(d) Fixed assets

Leasehold land and buildings and plant and machinery are stated at valuation less accumulated depreciation and accumulated impairment losses. The valuations of leasehold land and buildings are on an open market basis related to individual properties and separate values are not attributed to land and buildings. Independent valuations are performed every three years. In the intervening years, the directors review the carrying value of these fixed assets and adjustments are made where they consider that there has been a material change. Increases in valuation are credited to the revaluation reserve. Decrease in valuation are first offset against increases on earlier valuations in respect of the same asset and thereafter debited to the operating result. Any subsequent increases are credited to the operating result up to the amount previously debited.

In current year, the revaluation of plant and machinery, which was previously performed by independent valuer for every three years, are performed by the directors of the Company. This is a change in accounting policy that has been applied retrospectively and the comparative figures have been restated, where required. The adoption of this new accounting policy had no material effect on the Group’s previous years’ results.

Other fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Leasehold land is depreciated over the period of the lease while other fixed assets are depreciated at rates sufficient to write off their cost/valuation less accumulated impairment losses over their estimated useful lives on a straight-line basis.

The principal annual rates are as follows:

Buildings	2.5%
Plant and machinery	6.6-20%
Furniture, fixtures and equipment	10-20%
Leasehold improvements	15-18%
Motor vehicles	15-20%

Major costs incurred in restoring fixed assets to their normal working condition are charged to the profit and loss account. Improvements are capitalized and depreciated over their expected useful lives to the Group.

At each balance sheet date, both internal and external sources of information are considered to assess whether there is any indication that fixed assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated and where relevant, an impairment loss is recognized to reduce the asset to its recoverable amount. Such impairment loss is recognised in the profit and loss account except where the asset is carried at valuation and the impairment loss does not exceed the revaluation surplus for that same asset, in which case it is treated as a revaluation decrease.

The gain or loss on disposal of a fixed asset is the difference between the net sale proceeds and the carrying amount of the relevant asset, and is recognised in the profit and loss account. Any revaluation reserve balance remaining attributable to the relevant asset is transferred to retained earnings/ accumulated losses and is shown as a movement in reserves.

(e) Assets under leases

• (i) Finance leases

Leases that substantially transfer to the Group all the risks and rewards of ownership of assets are accounted for as finance leases. Finance leases are capitalized at the inception of the leases at the lower of the fair value of the leased assets or the present value of the minimum lease payments. Each lease payment is allocated between the capital and finance charges so as to achieve a constant rate on the capital balances outstanding. The corresponding rental obligations, net of finance charges, are included in non-current liabilities. The finance charges are charged to the profit and loss account over the lease periods.

Assets held under finance leases are depreciated over the shorter of their lease terms and their estimated useful lives or their estimated useful lives if there is reasonable certainty that the assets held under finance leases will be owned by the Group by the end of the lease periods.

– 45 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(ii) Operating leases

Leases where substantially all the risks and rewards of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases net of any incentives received from the leasing company are charged to the profit and loss account on a straight-line basis over the lease periods.

(f) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost, calculated on the first-in, firstout basis, comprises materials, direct labour and an appropriate proportion of all production overhead expenditure. Net realizable value is determined on the basis of anticipated sale proceeds less estimated selling expenses.

(g) Trade receivables

Provision is made against trade receivables to the extent which they are considered to be doubtful. Trade receivables in the balance sheet are stated net of such provision.

(h) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and short term highly liquid investments which are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Company’s cash management.

(i) Provisions

Provisions are recognised when the Group has a present legal or constructive obligations as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain.

(j) Employee benefits

(i) Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

• (ii) Pensions obligations

The group contributes to a defined contribution retirement scheme which is available to all employees. Contributions to the scheme by the Group and employees are calculated as a percentage of employees’ basis salaries. The retirement benefit scheme cost charged to the profit and loss account represents contributions payable by the Group to the funds.

The Group’s contributions to the defined contribution retirement scheme are expensed as incurred. The assets of the scheme are held separately from those of the Group in independently administered funds.

– 46 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(k) Deferred taxation

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets should be recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized, and also should be recognised for the carryforward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilised.

Deferred tax assets and liabilities should be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted by the balance sheet date.

• (l) Contingent liabilities and contingent assets

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group.

Contingent assets are not recognised but are disclosed in the notes to the financial statements when an inflow of economic benefits is probable. When inflow is virtually certain, an asset is recognised.

(m) Revenue recognition

Revenue from the sale of goods is recognised on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and the title has passed.

Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and the interest rates applicable.

Operating lease rental income is recognised on a straight-line basis.

(n) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset.

All other borrowing costs are charged to the profit and loss account in the year in which they are incurred.

– 47 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (o) Translation of foreign currencies

Transactions in foreign currencies are translated at exchange rates ruling at the transaction dates. Monetary assets and liabilities expressed in foreign currencies at the balance sheet date are translated at rates of exchange ruling at the balance sheet date. Exchange differences arising in these cases are dealt with in the profit and loss account.

The balance sheet of subsidiaries expressed in foreign currencies are translated at the rate of exchange ruling at the balance sheet date whilst the profit and loss account is translated at an average rate. Exchange differences are dealt with as movements in reserves. Upon disposal of an overseas subsidiary, the related cumulated exchange difference is included in the profit and loss account as part of the gain or loss on disposal.

(p) Segment reporting

In accordance with the Group’s internal financial reporting the Group has determined that business segments be presented as the primary reporting format and geographical as the secondary reporting format.

Unallocated costs represent corporate expenses. Segment assets consist primarily of fixed assets, inventories, receivables and operating cash. Segment liabilities comprise operating liabilities and exclude items such as taxation and certain corporate borrowings. Capital expenditure comprises additions to fixed assets, including additions resulting from acquisitions through purchases of subsidiaries.

In respect of geographical segment reporting, sales are based on the country in which the customer is located. Total assets and capital expenditure are based on where the assets are located.

(q) Dividends

Dividends proposed or declared after the balance sheet date are not recognized as a liability at the balance sheet date.

2. Impact of Recently Issued Accounting Standards

The Hong Kong Institute of Certified Public Accountants has issued a number of new and revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards (“new HKFRSs”) which are effective for accounting periods beginning on or after 1st January 2005. The Group has not early adopted these new HKFRSs in the financial statements for the year ended 31 March 2005.

The Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a significant impact on its results of operations and financial position.

3. Turnover, Revenue and Segment Information

The Group is principally engaged in manufacturing and trading of packaging products, paper gifts items and promotional products. Revenues recognised during the year are as follows:

Turnover Sales of goods at invoiced value to customers, net of discounts and returns Other revenues Interest income Rental income from land and buildings General provision for doubtful debts written back Sundry income Total revenues	2005 HK$’000 134,270 ------------- 72 – – 2,273 2,345 ------------- 136,615	2004 HK$’000 146,239 ------------- 86 14 1,000 3,194
		4,294 -------------
		150,533

– 48 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Primary reporting format – business segments

Turnover Segment results Unallocated income Unallocated costs Operating profit Finance costs Profit before taxation Taxation Profit after taxation Minority interests Loss attributable to shareholders Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Capital expenditure Depreciation of fixed assets Amortisation of goodwill (unallocated) Impairment of goodwill (unallocation)	Year ended 31 March 2005 Packaging Paper Promotional products gifts items products HK$’000 HK$’000 HK$’000 67,360 9,710 57,200 13,593 3,163 14,904 95,524 20,977 59,861 28,074 6,668 17,823 2,242 954 2,584 4,495 1,753 4,547	Group HK$’000 134,270 31,660 2,345 (28,859) 5,146 (4,483) 663 (87) 576 (663) (87) 176,362 6,752 183,114 52,565 54,994 107,559 5,780 10,795 2,616 –

– 49 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Turnover Segment results Unallocated income Unallocated costs Operating loss Finance costs Loss before taxation Taxation Loss after taxation Minority interests Loss attributable to shareholders Segment assets Unallocated assets Total assets Segment liabilities Unallocated liabilities Total liabilities Capital expenditure Depreciation of fixed assets Amortisation of goodwill (unallocated) Impairment of goodwill (unallocation)	Year ended 31 March 2004 Packaging Paper Promotional products gifts items products HK$’000 HK$’000 HK$’000 75,606 29,660 40,973 12,412 5,190 7,416 81,289 25,640 48,604 61,286 15,396 22,774 7,401 1,967 3,106 5,709 2,240 3,094	Group HK$’000 146,239 25,018 4,294 (37,241) (7,929) (5,799) (13,728) (4,495) (18,223) (657) (18,880) 155,533 57,171 212,704 99,456 36,733 136,189 12,474 11,043 2,650 95

– 50 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Secondary reporting format – geographical segments

4.

		Year ended	Year ended	31 March 2005
			Segment	Total	Capital
	Turnover		results	assets	expenditure
	HK$’000		HK$’000	HK$’000	HK$’000
Hong Kong	93,662		22,085	46,512	757
Mainland China	38,620		9,106	136,603	5,023
Other countries	1,988		469	–	–
	134,270		31,660	183,115	5,780
Unallocated income			2,345
Unallocated costs			(28,859)
Operating profit			5,146
		Year ended		31 March 2004
			Segment	Total	Capital
	Turnover		results	assets	expenditure
	HK$’000		HK$’000	HK$’000	HK$’000
Hong Kong	97,940		16,755	74,341	124
Mainland China	39,114		6,692	138,363	12,350
Other countries	9,185		1,571	–	–
	146,239		25,018	212,704	12,474
Unallocated income			4,294
Unallocated costs			(37,241)
Operating loss			(7,929)
Operating Profit/(Loss)
Operating profit/(loss) was stated after charging the following:
				2005	2004
				HK$’000	HK$’000
Auditors’ remuneration
– Current year				398	300
– Overprovision in prior year				–	(25)
				398	275
Cost of inventories sold				102,610	121,221
Provision for and write off of bad debts				1,337	2,035
Provision for and write off of obsolete inventories				1,197	3,348
Amortisation of goodwill				2,616	2,650
Impairment of goodwill				–	95
Depreciation of fixed assets
– owned assets				7,272	8,834
– assets held under finance leases				3,523	2,209
Operating lease rentals in respect of land and buildings				1,371	1,375
Loss on fixed assets written off				–	366
Loss on disposal of fixed assets				1,132	276
Investment written off				–	60
Staff costs, including directors’ emoluments_(note 10)_				12,679	13,005
Exchange loss				13	42

– 51 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. Finance Costs

Interests on bank loans and overdrafts Interests element of finance leases Other interests	2005 HK$’000 2,377 1,095 1,011 4,483	2004 HK$’000 2,857 973 1,969
		5,799

6. Taxation

Hong Kong profits tax has been provided at the rate of 17.5% (2004: 17.5%) on the estimated assessable profit for the year. Taxation on overseas profits has been calculated on the estimated assessable profit for the year at the rates of taxation prevailing in the countries in which the group operates.

Subsidiaries of the Company established in the People’s Republic of China (the “PRC”) is subject to the PRC Enterprise Income Tax (“EIT”) on the taxable income as reported in its PRC statutory financial statements adjusted in accordance with relevant income tax laws. The applicable EIT rate is 33%. However, the subsidiaries have tax privileges granted by the PRC Government that they are entitled to full exemption from EIT for the first two years and 50% reduction in EIT for the next three years, commencing from the first profitable year after offsetting all tax losses carried forward from the previous years.

The amount of taxation charged/(credited) to the consolidated profit and loss account represents:

Hong Kong profits tax – Current – Under/(Over) provision in prior years Deferred taxation_(note 24)_ Taxation charge	2005 HK$’000 83 16 (12) 87	2004 HK$’000 165 (610) 4,940
		4,495

Reconciliation between accounting profit/(loss) and tax expense at applicable tax rate is as follows:

Profit/(loss) before taxation Calculated at the taxation rate of 17.5% (2004: 17.5%) Net effect of income and expense items which are not assessable/deductible for income tax purpose Utilization of previously unrecognized tax losses Effect of tax loss not recognized in current year Under/(Over) provision in prior years Tax expense	2005 HK$’000 663 116 (279) (88) 322 16 87	2004 HK$’000 (13,728)
		(2,402) 3,920 (123) 3,710 (610)
		4,495

7. Loss Attributable to Shareholders

The loss attributable to shareholders is dealt with in the financial statements of the Company to the extent of a loss of HK$1,382,000 (2004: loss of HK$740,000).

8. Dividends

No dividend was proposed or paid by the Company during the year. (2004: Nil).

– 52 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

9. Basic Loss Per Share

The calculation of basic loss per share (2004: loss per share) is based on the Group’s loss attributable to shareholders of HK$87,000 (2004: loss of HK$18,880,000) and of 180,000,000 shares (2004: 180,000,000 shares) in issue during the year.

Diluted loss per share was not presented for both years as there were no dilutive potential ordinary shares at year end.

10. Staff Costs (including Directors’ Remuneration)

Wages and salaries Redundancy costs Retirement benefits costs – defined contribution benefit schemes	2005 HK$’000 12,188 200 291 12,679	2004 HK$’000 12,595 – 410
		13,005

11. Directors’ and Senior Management’S Emoluments

(a) Directors’ emoluments

The aggregate amounts of emoluments payable to the directors of the Company during the year are as follows:

Fees Other emoluments Bonus Retirement benefit costs	2005 HK$’000 30 1,560 16 26 1,632	2004 HK$’000 40 2,204 – 36
		2,280

No directors waived any emoluments and no incentive payment or compensation for loss of office was paid or payable to any director during the year.

The emoluments of the directors fell within the following bands:

	Number of	directors
Emoluments bands	2005	2004
	HK$’000	HK$’000
Nil – HK$1,000,000	6	6
HK$1,000,001 – HK$1,500,000	–	–

Directors’ emoluments disclosed above include HK$120,000 (2004: HK$120,000) paid to independent non-executive directors.

– 53 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Five highest paid individuals

The five individuals whose emoluments were the highest in the Group for the year include two (2004: three) directors whose emoluments are reflected in the analysis presented above. The emoluments payable to the remaining three (2004: two) individuals during the year are as follows:

Basic salaries and allowances Retirement benefit costs 12. Goodwill Year ended 31 March 2005 Opening net book amount Amortisation charge Closing net book amount At 31 March 2005 Cost Accumulated amortisation Accumulated impairment Net book amount At 31 March 2004 Cost Accumulated amortization Accumulated impairment Net book amount	2005 HK$’000 1,957 36 1,993	2004 HK$’000 934 24 958 Group HK$’000 9,154 (2,616) 6,538 13,250 (6,617) (95) 6,538 13,250 (4,001) (95) 9,154

– 54 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

13. Fixed Assets

Group Leasehold Furniture, land and Plant and fixtures and Leasehold buildings machinery equipment improvements HK$’000 HK$’000 HK$’000 HK$’000 Cost or valuation At 1st April 2004 3,956 110,795 8,332 18,885 Additions – 5,023 10 – Disposals (3,956) (21,154) – – At 31 March 2005 – 94,664 8,342 18,885 ----------- ----------- ----------- ----------- Accumulated depreciation At 1st April 2004 897 30,232 4,726 6,364 Charge for the year 69 6,853 818 2,776 Disposals (966) (9,848) – – At 31 March 2005 – 27,237 5,544 9,140 ----------- ----------- ----------- ----------- Net book value At 31 March 2005 – 67,427 2,798 9,745 At 31 March 2004 3,059 80,563 3,606 12,521	Motor vehicles HK$’000 2,220 747 (1,280) 1,687 ----------- 1,537 279 (998) 818 ----------- 869 683	Total HK$’000 144,188 5,780 (26,390)
		123,578 ----------- 43,756 10,795 (11,812)
		42,739 ----------- 80,839
		100,432

The analysis of the cost or valuation of the above assets at 31 March 2005 is as follows:

Leasehold Furniture, land and Plant and fixtures and Leasehold buildings machinery equipment improvements HK$’000 HK$’000 HK$’000 HK$’000 At cost – 50,569 8,342 18,885 At valuation_(note (a))_ – 44,095 – – – 94,664 8,342 18,885	Motor vehicles HK$’000 1,687 – 1,687	Total HK$’000 79,483 44,095
		123,578

The analysis of the cost or valuation of the above assets at 31 March 2004 is as follows:

Leasehold Furniture, land and Plant and fixtures and Leasehold buildings machinery equipment improvements HK$’000 HK$’000 HK$’000 HK$’000 At cost – 46,862 8,332 18,885 At valuation_(note (a))_ 3,956 63,933 – – 3,956 110,795 8,332 18,885 Net book value of lease assets At 31 March 2005 – 41,804 31 – At 31 March 2004 – 47,382 35 –	Motor vehicles HK$’000 2,220 – 2,220 180 343	Total HK$’000 76,299 67,889
		144,188
		42,015
		47,760

– 55 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (a) The leasehold land and buildings and plant and machinery were revalued by Knight Frank and Sallmanns (Far East) Limited, independent firms of professional valuers, at 31 August 2001 on the basis of open market value. The leasehold land and buildings were disposed to third parties during the year. In previous years, the revaluation of plant and machinery was performed by independent valuer for every three years. This is a change in the accounting policy that, in the opinion of the directors, the amount of plant and machinery at 1st April 2004 is not restated on the balance sheet as the valuation is not materially different from the carrying amount in previous years.

The directors of the Company was undertaken a review on the carrying value of plant and machinery at 31 March 2005 and are of the opinion that the valuation is not materially different from the above carrying amount.

The revaluations of the Group’s plant and machinery do not constitute temporary difference (2004: timing difference) for tax purposes.

• (b) The carrying amount of revalued land and buildings and plant and machinery held by the Group would have been HK$Nil (2004: HK$2,827,000) and HK$27,084,000 (2004: HK$38,354,000) respectively had they been stated at cost less accumulated depreciation and impairment losses.

• (c) At 31 March 2005, the net book values of leasehold land and buildings and plant and machinery pledged for the Group’s facilities were approximately HK$Nil (2004: HK$3,059,000) and HK$547,000 (2004: HK$590,000).

14. Interests in Subsidiaries

Unlisted shares, at cost Amounts due from subsidiaries Amount due to a subsidiary	Company 2005 2004 HK$’000 HK$’000 71,870 71,870 35,607 29,750 (850) (850) 106,627 100,770

The amounts due from/(to) subsidiaries are unsecured, interest-free and have no fixed terms of repayment.

The following is a list of principal subsidiaries as at 31 March 2005:

		Issued and fully
	Country/place	paid up share
	of incorporation	capital/registered	Attributable		Principal activities
Name	or establishment	capital	equity	interest	and place of operation
			2005	2004
Direct subsidiary:
New Master Group	British Virgin	200 Ordinary shares	100%	100%	Investment holding
Limited	Islands	of US$1 each			in Hong Kong
Indirect subsidiaries:
New Spring Group	Hong Kong	2 Ordinary shares of	100%	100%	Manufacturing and
Company Limited		HK$1 each and			trading of gift and toy
		10,000 Non-voting			boxes and other paper
		deferred shares			products in Hong Kong
		of HK$1 each			and the PRC
Sun Hip Fung (JF)	Hong Kong	2 Ordinary shares of	100%	100%	Trading of paper products in
Printing Products		HK$1 each and			Hong Kong
Company Limited		20,000 Non-voting
		deferred shares
		of HK$1 each

– 56 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

		Issued and fully
	Country/place	paid up share
	of incorporation	capital/registered	Attributable		Principal activities
Name	or establishment	capital	equity	interest	and place of operation
			2005	2004
Today Graphic	Hong Kong	2 Ordinary shares of	100%	100%	Trading of packaging
Company Limited		HK$1 each and 20,000			products in Hong Kong
		Non-voting deferred
		shares of HK$1 each
Today Advertising	Hong Kong	2 Ordinary shares of	100%	100%	Investment holding
Products Company		HK$1 each and 200,000			in Hong Kong Limited
Limited		Non-voting deferred
		shares of HK$1 each
New Richest Holdings	Hong Kong	10,000 Ordinary shares	63%	63%	Investment holding
Limited		of HK$1 each			in Hong Kong
力新時紙製品（深圳）	The PRC	Registered capital of	100%	100%	Manufacturing and sale of
有限公司*		HK$3,000,000			paper products in the PRC
Anson Printing Group	Hong Kong	10,000 Ordinary shares	51%	51%	Provision of printing and
Limited		of HK$1 each			colour separation services
					in Hong Kong
Visual Products Limited	Hong Kong	10,000 Ordinary shares	100%	100%	Manufacturing and trading of
		of HK$1 each			lenticular plastic products
					in Hong Kong
Pronto Print Limited	Hong Kong	50,000 Ordinary shares	99.2%	99.2%	Provision of printing and
		of HK$10 each			colour separation services
					and trading of lenticular
					plastic products
					in Hong Kong
Great Tech Trading	Hong Kong	10,000 Ordinary shares	100%	100%	Trading of lenticular plastic
Limited		of HK$1 each			products in Hong Kong
New Spring Label &	Hong Kong	10,000 Ordinary shares	34.65%	34.65%	Production and trading of
Packaging Limited		of HK$1 each			label and packaging
					products in Hong Kong
New Pearl Hot Stamping	Hong Kong	10,000 Ordinary shares	100%	100%	Provision of hot stamping and
& Packaging Limited		of HK$1 each			packaging services in
					Hong Kong

• foreign wholly-owned enterprise

– 57 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

15. Inventories

Raw materials Work in progress Finished goods	Group 2005 2004 HK$’000 HK$’000 6,665 11,759 2,285 3,819 10,874 8,569 19,824 24,147	Group 2005 2004 HK$’000 HK$’000 6,665 11,759 2,285 3,819 10,874 8,569 19,824 24,147
		24,147

At 31 March 2004 and 2005, all inventories were carried at cost.

16. Trade Receivables

At 31 March 2005, the ageing analysis of the trade receivables are as follows:

Current to 30 days 31 days to 60 days 61 days to 90 days 91 days to 180 days Over 180 days	Group 2005 2004 HK$’000 HK$’000 11,731 8,424 2,567 6,009 3,335 3,104 5,669 3,304 8,694 14,712 31,996 35,553	Group 2005 2004 HK$’000 HK$’000 11,731 8,424 2,567 6,009 3,335 3,104 5,669 3,304 8,694 14,712 31,996 35,553
		35,553

Customers are generally granted with credit terms of 30 to 90 days. Longer payment terms are granted to those customers which have good payment history and long-term business relationship with the Group. Among debts due over 180 days, HK$6,575,000 approximately had been received up to the date of this report.

17. Bank Balances and Cash

Included in the balance of the Group is an amount of approximately HK$1,150,000 (2004: HK$26,000) denominated in Renminbi in the PRC. The conversion of these Renminbi denominated balances into foreign currencies is subject to the rules and regulations of foreign exchange control promulgated by the PRC government.

18. Trade Payables

At 31 March 2005, the ageing analysis of the trade payables are as follows:

Current to 30 days 31 days to 60 days 61 days to 90 days Over 90 days	Group 2005 2004 HK$’000 HK$’000 4,669 5,002 2,023 4,180 2,206 2,053 24,459 30,961 33,357 42,196	Group 2005 2004 HK$’000 HK$’000 4,669 5,002 2,023 4,180 2,206 2,053 24,459 30,961 33,357 42,196
		42,196

19. Due to A Related Company

The amount due to a related company is unsecured, interest free and has no fixed terms of repayment.

– 58 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

20. Non-current Liabilities

Bank loans, secured Other loans, secured Obligations under finance leases Current portion of non-current liabilities At 31 March 2005, the Group’s bank loans are repayable as follows: Within one year In the second year In the third to fifth years Over fifth year At 31 March 2005, the Group’s other loans are repayable as follows: Within one year At 31 March 2005, the Group’s finance lease liabilities are repayable as follows: Within one year In the second year In the third to fifth year Future finance charges on finance leases Present value of finance lease liabilities The present value of finance lease liabilities is as follows: Within one year In the second year In the third to fifth years

Group 2005 2004 HK$’000 HK$’000 17,712 26,012 9,000 2,500 13,481 24,200 40,193 52,712 (33,117) (29,800) 7,076 22,912 Group 2005 2004 HK$’000 HK$’000 13,613 16,325 2,238 3,541 1,861 4,920 – 1,226 17,712 26,012 Group 2005 2004 HK$’000 HK$’000 9,000 2,500 Group 2005 2004 HK$’000 HK$’000 10,848 11,738 2,818 10,629 228 2,964 13,894 25,331 (413) (1,131) 13,481 24,200 10,504 10,975 2,774 10,295 203 2,930 13,481 24,200

– 59 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

At 31 March 2005, the Company’s other loan is repayable as follows:

Within one year 21. Share Capital Authorised: 2,000,000,000 (2004: 2,000,000,000) ordinary shares of HK$0.1 each Issued and fully paid: 180,000,000 (2004: 180,000,000) ordinary shares of HK$0.1 each 22. Share Options	Company 2005 2004 HK$’000 HK$’000 6,000 – 2005 2004 HK$’000 HK$’000 200,000 200,000 18,000 18,000	Company 2005 2004 HK$’000 HK$’000 6,000 – 2005 2004 HK$’000 HK$’000 200,000 200,000 18,000 18,000
		2004 HK$’000 200,000
		18,000

Under the share option scheme (the “Scheme”) approved by the shareholders on 22nd October 2001, the directors of the Company may, at its discretion, invite directors and employees of the Group to take up options to subscribe for shares in the Company representing up to a maximum of 30 per cent of the issued share capital of the Company from time to time.

The subscription price for the shares in relation to options to be granted under the Scheme shall be determined by the board and shall be at least the highest of (i) the nominal value of the shares of the Company; (ii) the closing price of the shares on the date of grant (the “Offer Date”); and (iii) the average closing price of the shares for the five business days immediately preceding the Offer Date. The options are exercisable within 10 years from the Offer Date.

No options have been granted since the establishment of the Scheme.

– 60 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

23. Reserves

Share premium HK$’000 At 1st April 2003 12,667 Exchange differences arising on translation of the financial statements of the overseas subsidiaries – Loss attributable to shareholders – At 31 March 2004 12,667 Representing: Reserves At 1st April 2004 12,667 Valuation released upon disposal of leasehold land and buildings and plant and machinery – Loss attributable to shareholders – At 31 March 2005 12,667 Representing: Reserves At 1st April 2003 Loss attributable to shareholders At 31 March 2004 Representing: Reserves At 1st April 2004 Loss attributable to shareholders At 31 March 2005 Representing: Reserves	Capital reserve HK$’000 (243) – – (243) (243) – – (243)	Group Statutory Revaluation Exchange Retained reserve reserve reserve earnings HK$’000 HK$’000 HK$’000 HK$’000 534 2,203 13 62,214 – – 7 – – – – (18,880) 534 2,203 20 43,334 534 2,203 20 43,334 – (873) – – – – – (87) 534 1,330 20 43,247 Company Retained earnings/ Share (Accumulated premium losses) HK$’000 HK$’000 84,270 1,021 – (740) 84,270 281 84,270 281 – (1,382) 84,270 (1,101)	Total HK$’000 77,388 7 (18,880) 58,515 58,515 58,515 (873) (87) 57,555 57,555 Total HK$’000 85,291 (740) 84,551 84,551 84,551 (1,382) 83,169 83,169

At 31 March 2005, goodwill written off against the Group’s retained earnings as a result of the acquisition of subsidiaries prior to 1st April 2001 amounted to HK$293,000 (2004: HK$293,000).

– 61 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

24. Deferred Taxation

The major components of the deferred tax liability/(asset) provided for at the balance sheet date and for the year then ended are as follows:

Deferred tax liabilities

In April Charged/(credited) to consolidated profit and loss account_(note 6)_ In March	Accelerated tax depreciation 2005 2004 HK$’000 HK$’000 11,949 6,027 (686) 5,922 11,263 11,949	Group Tax losses 2005 2004 HK$’000 HK$’000 (1,800) (1,133) 498 (667) (1,302) (1,800)	Total 2005 2004 HK$’000 HK$’000 10,149 4,894 (188) 5,255 9,961 10,149	Total 2005 2004 HK$’000 HK$’000 10,149 4,894 (188) 5,255 9,961 10,149
				10,149

The major components of the deferred tax asset provided for at the balance sheet date and for the year then ended are as follows:

Deferred tax assets

In April Charged/(credited) to consolidated profit and loss account_(note 6)_ In March	Accelerated tax depreciation 2005 2004 HK$’000 HK$’000 (8) – 8 (8) – (8)	Group Tax losses 2005 2004 HK$’000 HK$’000 (307) – 168 (307) (139) (307)	Total 2005 2004 HK$’000 HK$’000 (315) – 176 (315) (139) (315)	Total 2005 2004 HK$’000 HK$’000 (315) – 176 (315) (139) (315)
				(315)

25. Notes to Consolidated Cash Flow Statement

(a) Reconciliation of profit/(loss) before taxation to net cash inflow generated from operations

Profit/(loss) before taxation Depreciation Impairment of goodwill Loss on fixed assets written off Loss on disposal of fixed assets Interest income Interest expenses Interest element of finance leases Amortisation of goodwill Decrease/(increase) in inventories Decrease/(increase) in trade receivables, other receivables, deposits and prepayments (Decrease)/increase in trade payables, accrued charges and other payables (Decrease)/increase in amount due to a related company Net cash inflow generated from operations	2005 HK$’000 663 10,795 – – 1,132 (72) 3,388 1,095 2,616 4,323 6,330 (9,870) (999) 19,401	2004 HK$’000 (13,728) 11,043 95 366 276 (86) 4,826 973 2,650 (1,409) (8,003) 21,036 723
		18,762

– 62 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

(b) Analysis of changes in financing during the year

At the beginning of the year Minority interests in share of profits in subsidiaries Dividends paid to minority shareholders by a subsidiary New bank and other loans Repayment of bank and other loans Capital elements of finance lease rental payments Inception of finance leases At the end of the year	Share capital including share premium 2005 2004 HK$’000 HK$’000 30,667 30,667 – – – – – – – – – – – – 30,667 30,667	Minority interests 2005 2004 HK$’000 HK$’000 612 (45) 663 657 (300) – – – – – – – – – 975 612	Loans and obligations under finance leases 2005 2004 HK$’000 HK$’000 52,712 54,185 – – – – 21,509 48,015 (23,309) (50,252) (11,253) (8,551) 534 9,315 40,193 52,712	Loans and obligations under finance leases 2005 2004 HK$’000 HK$’000 52,712 54,185 – – – – 21,509 48,015 (23,309) (50,252) (11,253) (8,551) 534 9,315 40,193 52,712
				52,712

(c) Major non-cash transactions

During the year, the Group had the following major non-cash transactions:

	2005	2004
	HK$’000	HK$’000
Finance lease arrangements in respect of assets with
total capital values at the inception of leases	534	9,315

26. Banking Facilities

As at 31 March 2005, the Group’s banking facilities were secured by the followings:

• (i) corporate guarantees given by the Company and its subsidiaries;

• (ii) bank deposits of HK$6,170,000;

(iii) personal guarantees of the Company’s directors; and

(iv) certain leasehold land and buildings of related party and related companies.

27. Contingent Liabilities

Guarantees for bank loans and overdrafts of subsidiaries Guarantees for finance lease assets of subsidiaries	Company 2005 2004 HK$’000 HK$’000 30,461 38,622 5,528 10,497 35,989 49,119	Company 2005 2004 HK$’000 HK$’000 30,461 38,622 5,528 10,497 35,989 49,119
		49,119

– 63 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

28. Commitments

• (a) Capital commitments

At 31 March 2005, the Group had capital commitments contracted but not provided for in respect of machineries of approximately HK$2,050,000 (2004: HK$1,980,000).

(b) Commitments under operating leases

At 31 March 2005, the Group had future aggregate minimum lease payments under non-cancellable operating leases in respect of land and buildings which expire as follows:

Not later than one year Later than one year and not later than five years	2005 HK$’000 1,205 532 1,737	2004 HK$’000 928 402
		1,330

29. Related Party Transactions

Save as disclosed in other notes to the financial statements, other significant related party transactions, which were carried out in the normal course of the Group’s business and were charged at prices mutually agreed, are as follows:

	2005	2004
	HK$’000	HK$’000
Interest income
Beautiking Investments Limited (i)	62	55
Rental paid
Beaumax Company Limited (ii)	228	338
Beautiking Investments Limited ((iii), (iv) & (v))	504	544
Glory Motion Company Limited (iii)	276	276

• (i) During the year, the amount due from Beautiking Investments Limited was unsecured and interestbearing at 12% per annum which was charged at market rates.

• (ii) One of the subsidiaries, Sun Hip Fung (JF) Printing Products Company Limited, has entered into a lease agreement with a related company, Beaumax Company Limited, to lease office space for a period of two years commencing 1st February 2003 at a monthly rental of HK$19,000. The lease agreement was renewed for a period of two years commencing 1st February 2005 at a monthly rental of HK$19,000. Certain executive directors of the Company have beneficial interests in Beaumax Company Limited. The lease was entered into on normal commercial terms.

• (iii) One of the subsidiaries, New Spring Group Company Limited, has entered into lease agreements with related companies, Beautiking Investments Limited and Glory Motion Company Limited, to lease office spaces for a period of two years commencing 1st February 2003 and 1st July 2003 at a monthly rental of HK$22,000 and HK$23,000 respectively. The lease agreement with Beautiking Investments Limited was renewed for a period of two years commencing 1st February 2005 at a monthly rental of HK$22,000. The leases were entered into on normal commercial terms.

• (iv) One of the subsidiaries, Visual Products Limited, has entered into a lease agreement with Beautiking Investments Limited to lease office space for a period of two years commencing 1st April 2004 at a monthly rental of HK$10,000. The lease was entered into on normal commercial terms.

• (v) One of the subsidiaries, New Spring Label and Packaging Limited has entered into a lease agreement with Beautiking Investments Limited to lease office space for a period of two years commencing 1st April 2004 at monthly rental of HK$10,000. The lease was entered into on normal commercial terms.

– 64 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

30. Ultimate Holding Company

The directors regard Fortune Gold Developments Limited, a company incorporated in British Virgin Islands, as being the ultimate holding company.

31. Approval of Financial Statements

The financial statements were approved by the board of directors on 27th July 2005.

– 65 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP

Set out below is the unaudited condensed consolidated financial statements of the Group for the six months ended 30 September 2005 and 30 September 2004 extracted from the 2005 Interim Report.

CONDENSED CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the six months ended 30 September 2005

Note Turnover 4 Cost of sales Gross profit Other revenues Profit on disposal of a subsidiary Distribution costs Administrative expenses Operating (loss)/profit 5 Finance costs (Loss)/Profit before taxation Taxation 7 (Loss)/Profit for the period Attributable to: Equity holders of the Company Minority interests (Loss)/Earnings per share 8 Basic Diluted	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 58,606 83,473 (47,029) (66,352) 11,577 17,121 832 1,244 1,095 – (357) (3,037) (25,625) (11,862) (12,478) 3,466 (2,220) (2,656) (14,698) 810 0 (43) (14,698) 767 (14,700) 442 2 325 (14,698) 767 HK cents HK cents (8.17) 0.25 N/A N/A

– 66 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Condensed Consolidated Balance Sheet

At 30 September 2005

Unaudited 30 September 2005 Note HK$’000 Non-current assets Deferred tax assets 14 139 Goodwill 9 6,538 Property, plant and equipment 9 71,504 78,181 ---------------- Current assets Inventories 13,359 Trade receivables 10 34,022 Other receivables, deposits and prepayments 31,307 Taxation recoverable 1 Dividend receivable 1,100 Pledged bank deposits 20,178 Bank balances and cash 305 100,272 ---------------- Current liabilities Trade payables 11 29,044 Accrued charges and other payables 18,878 Taxation payable 98 Borrowings 12 26,053 Bank overdrafts, secured 6,860 80,933 ---------------- Net current assets 19,339 ---------------- Total assets less current liabilities 97,520 Non-current liabilities Borrowings 12 25,901 Deferred tax liability 14 9,611 35,512 Total assets and liabilities 62,008 Capital and reserves: Share capital 13 18,000 Reserves 43,058 Equity attributable to shareholders of the Company 61,058 Minority interests 950 Total equity 62,008	Audited 31 March 2005 HK$’000 139 6,538 80,839
	87,516 ---------------- 19,824 31,996 35,594 103 0 6,170 1,911
	95,598 ---------------- 33,357 7,826 539 35,077 12,748
	89,547 ----------------
	6,051 ----------------
	93,567 7,076 9,961
	17,037
	76,530
	18,000 57,555
	75,555 975
	76,530

– 67 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 September 2005

Net cash inflow from operating activities Net cash from/(used in) investing activities Net cash used in financing activities Increase in cash and cash equivalents Cash and cash equivalents at 1 April Cash and cash equivalents at 30 September Analysis of balances of cash and cash equivalents: Bank balances and cash Bank overdrafts, secured Trust receipts loans	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 5,979 17,428 ---------------- ---------------- 2,736 (1,436) ---------------- ---------------- (4,306) (11,945) ---------------- ---------------- 4,409 4,047 (12,797) (19,283) (8,388) (15,236) 305 656 (6,860) (14,004) (1,833) (1,888) (8,388) (15,236)

– 68 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2005

Unaudited Statutory Share Share Capital surplus Exchange Revaluation capital premium reserve reserve reserve reserve HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 At 1 April 2005 18,000 12,667 (243) 534 20 1,330 Disposal of a subsidiary – – – – – – (Loss)/profit for the period – – – – – – At 30 September 2005 18,000 12,667 (243) 534 20 1,330 For the six months ended 30 September 2004 At 1 April 2004 18,000 12,667 (243) 534 20 2,203 Profit for the period – – – – – – At 30 September 2004 18,000 12,667 (243) 534 20 2,203			Unaudited			Total HK$’000 76,530 (678) (13,844) 62,008 77,127 767 77,894
				Retained earnings Sub-total HK$’000 HK$’000 43,247 75,555 201 201 (14,698) (14,698) 28,750 61,058 43,334 76,515 442 442 43,776 76,957	Minority interests HK$’000 975 (879) 854 950 612 325 937

– 69 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

NOTES TO CONDENSED ACCOUNTS

1. Organisation

New Spring Holdings Limited (the “Company”) was incorporated in the Cayman Islands with its shares listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).

On 25 August 2005, Automatic Result Limited (“Automatic Result”) entered into a sale and purchase agreement with Mr. Ng Man Chan (“Mr. Ng”) (the then controlling shareholder and chairman of the Company) and Fortune Gold Developments Limited (the then ultimate holding company of the Company which is beneficially owned by Mr. Ng). Pursuant to the aforesaid sale and purchase agreement, which was completed on 13 September 2005, Automatic Result becomes the holder of 95,000,000 shares of the Company, representing approximately 52.78% of the total issued share capital of the Company.

Pursuant to the Hong Kong Code on Takeovers and Mergers, Automatic Result made an unconditional cash offer to acquire all the issued shares of the Company not already owned by Automatic Result and parties acting in convert with it. Upon the close of the cash offer on 13 October 2005, Automatic Result held in aggregate 95,000,000 shares in the Company, representing approximately 52.78% of the issued share capital of the Company.

Accordingly, Automatic Result, which is beneficially owned by Mr. Tong Kit Shing (“Mr. Tong”), thereafter becomes the ultimate holding company of the Company. Mr. Tong was appointed as an executive director on 22 September 2005, and was elected as Chairman on 14 October 2005 and assumed effective control of the Company’s management with effect from that date.

The Company and its subsidiaries (hereinafter collectively referred to as the “Group”) are principally engaged in the manufacture and trading of paper gift items, packaging and promotional products in Hong Kong and in the People’s Republic of China (“PRC”).

2. Basis of preparation and principal accounting policies

The unaudited condensed consolidated financial statements have been prepared in compliance with Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange (the “Listing Rules”) and Hong Kong Accounting Standard (“HKAS”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 31 March 2005 except as described in note 3 below.

– 70 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. Impact of new Hong Kong Financial Reporting Standards

The HKICPA has issued a number of new Hong Kong Financial Reporting Standards (“HKFRSs”, which also include HKASs and Interpretations) which are effective for accounting periods beginning on or after 1 January 2005.

The major changes in accounting policies upon the adoption of these HKFRSs and the application of the relevant transitional provisions are summarised as follows:

• (a) The adoption of HKAS 1 has resulted in a change in the presentation of minority interests, which are now shown within equity. On the face of the consolidated profit and loss account, minority interests are presented as an allocation of the total profit or loss for the period. This change in presentation has been applied retrospectively.

• (b) The adoption of HKFRS 3 has resulted in a change in the accounting policy relating to goodwill.

Previously, goodwill arising on acquisition of subsidiaries prior to 1 January 2001 was held in reserves, and would be charged to the consolidated profit and loss account at the time of disposal of the relevant subsidiary, or at such time as the goodwill was determined to be impaired. Goodwill arising on acquisition of subsidiaries after 1 January 2001 was capitalised and amortised on a straight line basis over its useful economic life.

With effect from 1 January 2005, positive goodwill will not be amortised. Positive goodwill is subject to impairment test and impairment losses are recognized, if any. This new policy in respect of positive goodwill has been applied prospectively in accordance with the transitional arrangements in HKFRS 3. As a result, comparative figures have not been restated.

The carrying amount of negative goodwill previously recognized is no longer recognized and is credited to deficit in reserve.

On disposal of a subsidiary, the attributable amount of unamortised goodwill/goodwill previously eliminated against reserves is included in the determination of the gain or loss on disposal.

The effect of the changes in the accounting policies described above is a decrease in amortisation of goodwill of approximately HK$1,308,000 for the period.

Save as disclosed above, other new HKFRSs and HKASs adopted have no material impact on the 2005 Interim Report.

– 71 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. Segment information

Primary reporting format – business segments

The Group is principally engaged in the manufacturing and trading of packaging products, paper gifts items and promotional products in Hong Kong and the PRC.

An analysis of the Group’s turnover and results for the period by business segments is as follows:

Turnover Segment results Unallocated income Unallocated costs Gain on disposal of a subsidiary Operating (loss) Finance costs (Loss) before taxation Taxation (Loss) for the period Turnover Segment results Unallocated income Unallocated costs Operating profit Finance costs Profit before taxation Taxation Profit for the period	Packaging Products 26,557 5,436 Packaging Products 38,446 8,305	Unaudited Six months ended 30 September 2005 HK$’000 Paper Gifts Promotional Items Products 10,668 21,381 1,705 4,436 Unaudited Six months ended 30 September 2004 HK$’000 Paper Gifts Promotional Items Products 10,266 34,761 1,598 7,218	Group 58,606 11,577 832 (25,982) 1,095 (12,478) (2,220) (14,698) 0 (14,698) Group 83,473 17,121 1,244 (14,899) 3,466 (2,656) 810 (43) 767

There are no sales or other transactions between the business segments. Unallocated costs represent corporate expenses.

– 72 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. Operating (loss)/profit

Operating (loss)/profit is stated after the following:

After crediting: Gain on disposal of a subsidiary After charging: Cost of inventories sold Depreciation of fixed assets – owned assets – assets held under finance leases Amortisation of goodwill Provision for doubtful debts	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 1,095 – 47,029 66,352 3,050 3,855 1,898 1,758 – 1,308 8,774 1,570	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 1,095 – 47,029 66,352 3,050 3,855 1,898 1,758 – 1,308 8,774 1,570
		66,352 3,855 1,758 1,308 1,570

6. Staff costs

Wages and salaries Pension costs – defined contribution plans	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 2,608 6,615 93 229 2,701 6,844	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 2,608 6,615 93 229 2,701 6,844
		6,844

7. Taxation

Hong Kong profits tax has been provided at the rate of 17.5% (2004: 17.5%) on the estimated assessable profit for the six months ended 30 September 2005. Taxation on overseas profits has been calculated on the estimated assessable profits for the year at the rates of taxation prevailing in the countries in which the Group operates.

A subsidiary of the Company established in the PRC is subject to PRC Enterprise Income Tax (“EIT”) on the taxable income as reported in its PRC statutory financial statements adjusted in accordance with relevant income tax laws. The applicable EIT rate is 33%. However, the subsidiary has tax privileges granted by the PRC Government that it is entitled to full exemption from EIT for the first two years and 50% reduction in EIT for the next three years, commencing from the first profitable year after offsetting all tax losses carried forward from the previous years. No EIT is payable by the subsidiary as it has no taxable income for the period and is still in its tax exemption period.

The amount of taxation (credited)/charged to the condensed profit and loss account represents:

Hong Kong profits tax Deferred taxation_(note 14)_	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 0 47 0 (4) 0 43	Unaudited Six months ended 30 September 2005 2004 HK$’000 HK$’000 0 47 0 (4) 0 43
		43

– 73 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

8. (Loss)/Earnings per share

The calculation of basic (loss)/earnings per share is based on the Group’s loss attributable to equity holders of the Company for the period under review of approximately HK$14,700,000 (for the six months ended 30 September 2004: HK$442,000 profit) and of 180,000,000 shares (2004: 180,000,000 shares) in issue during the period under review.

No diluted earnings per share is presented as there are no dilutive potential ordinary shares during the period under review.

9. Capital expenditure

Opening net book amount at 1 April 2005 Additions Disposals Disposal of a subsidiary Depreciation charge_(note 5)_ Closing net book amount at 30 September 2005	Unaudited Property, plant and Goodwill equipment HK$’000 HK$’000 6,538 80,839 – 140 – (1,026) – (3,501) – (4,948) 6,538 71,504	Unaudited Property, plant and Goodwill equipment HK$’000 HK$’000 6,538 80,839 – 140 – (1,026) – (3,501) – (4,948) 6,538 71,504
		71,504

10. Trade receivables

The ageing analysis of trade receivables (net of provision for doubtful debts) is as follows:

30 Current 30 – 60 days 61 – 90 days 91 days to 180 days Over 180 days	Unaudited September 2005 HK$’000 6,908 8,807 6,018 6,948 5,341 34,022	Audited 31 March 2005 HK$’000 11,731 2,567 3,335 5,669 8,694
		31,996

Customers are generally granted with credit terms of 30 to 90 days. Longer payment terms are granted to those customers which have good payment history and long-term business relationship with the Group.

11. Trade payables

The ageing analysis of trade payables is as follows:

30 Current – 30 days 31 – 60 days 61 – 90 days Over 90 days	Unaudited September 2005 HK$’000 3,169 2,971 3,707 19,197 29,044	Audited 31 March 2005 HK$’000 4,669 2,023 2,206 24,459
		33,357

– 74 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

12. Borrowings

30 Bank loans, secured Other loans, secured Other loans, unsecured Trust receipt loans Obligations under finance leases Less: Amounts due within one year and year and shown under current liabilities	Unaudited September 2005 HK$’000 19,778 23,179 2,718 1,833 4,446 51,954 (26,053) 25,901	Audited 31 March 2005 HK$’000 17,712 9,000 – 1,960 13,481
		42,153 (35,077)
		7,076

	At 30 September 2005, the Group’s secured bank loans (excluding finance lease liabilities) were repayable as	At 30 September 2005, the Group’s secured bank loans (excluding finance lease liabilities) were repayable as	At 30 September 2005, the Group’s secured bank loans (excluding finance lease liabilities) were repayable as
	follows:
	Unaudited		Audited
	30 September		31 March
		2005	2005
		HK$’000	HK$’000
	Within one year	17,315	13,613
	More than one year but within two years	987	2,238
	More than two years but within five years	1,476	1,861
	More than five years	–	–
		19,778	17,712
13.	Share capital
	Unaudited		Audited
	30 September		31 March
		2005	2005
		HK$’000	HK$’000
	Authorised:
	2,000,000,000 ordinary shares of HK$0.1 each	200,000	200,000
	Issued and fully paid:
	180,000,000 ordinary shares of HK$0.1 each	18,000	18,000

– 75 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

14. Deferred taxation

Deferred taxation is calculated in full on temporary differences under the liability method using a principal taxation rate of 17.5%.

The movement on the deferred tax liabilities is as follows:

	Unaudited
	Six months		Audited
	ended	Year ended
	30 September		31 March
	2005		2005
	HK$’000		HK$’000
At the beginning of the period/year	9,961		10,149
Deferred taxation (credited)/charged to consolidated profit
and loss account_(note 7)_	–		(188)
Disposal of a subsidiary	(350)		–
At the end of the period/year	9,611		9,961

Deferred tax assets are recognised for the carryforward of unused tax loss to the extent that realisation of the related tax benefit through the future taxable profits is probable.

The movement on the deferred tax assets is as follows:

	Unaudited
	Six months		Audited
	ended	Year ended
	30 September		31 March
	2005		2005
	HK$’000		HK$’000
At the beginning of the period/year	(139)		(315)
Deferred taxation (credited)/charged to consolidated profit
and loss account_(note 7)_	–		176
At the end of the period/year	(139)		(139)

15. Contingent liabilities

At 30 September 2005, the Group had no contingent liabilities in respect of discounted bills with recourse (At 31 March 2005: HK$35,989,000).

16. Commitments under operating leases

At 30 September 2005, the Group had total future aggregate minimum lease payments under non-cancellable operating leases as follows:

30 Within one year Later than one year but not later than five years	Unaudited September 2005 HK$’000 1,152 387 1,539	Audited 31 March 2005 HK$’000 1,205 532
		1,737

– 76 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

17. Capital commitments

At 30 September 2005, the Group had no capital commitments in respect of purchase of plant and equipment (At 31 March 2005: HK$2,050,000).

18. Related party transactions

Significant related party transactions during the period, which were carried out in the normal course of the Group’s business with the following companies in which certain executive directors of the Company who resigned on 13 October 2005 have beneficial interest, charging at prices mutually agreed during the period under review are as follows:

		Unaudited	Unaudited
		Six month ended
		30 September
		2005	2004
	Note	HK$’000	HK$’000
Interest income
Beautiking Investments Limited	(i)	35	12
Rental paid
Beaumax Company Limited	(ii)	114	114
Beautiking Investments Limited	(iii), (iv) & (v)	192	252
Glory Motion Company Limited	(iii)	138	138

Notes:

• (i) Amount due from Beautiking Investments Limited was unsecured and interest-bearing at 12% per annum which was charged at market rates.

• (ii) One of the subsidiaries, Sun Hip Fung (JF) Printing Products Company Limited, has entered into a lease agreement with Beaumax Company Limited, to lease office space for a period of 2 years commencing 1 February 2003 at a monthly rental of HK$19,000. The lease agreement was renewed for a period of two years commencing 1 February 2005 at a monthly rental of HK$19,000. The lease was entered into on normal commercial terms.

• (iii) One of the subsidiaries, New Spring Group Company Limited, has entered into lease agreements with Beautiking Investments Limited and Glory Motion Company Limited to lease office spaces for a period of 2 years commencing 1 February 2003 and 1 July 2003 at a monthly rental of HK$22,000 and HK$23,000 respectively. The lease agreement with Beautiking Investments Limited was renewed for a period of two years commencing 1 February 2005 at a monthly rental of HK$22,000. The leases were entered into on normal commercial terms.

• (iv) One of the subsidiaries, New Spring Label & Packaging Limited, has entered into a lease agreement with Beautiking Investments Limited to lease office spaces for a period of 2 years commencing 1 April 2004 at a monthly rental of HK$10,000. The lease was entered into on normal commercial terms.

• (v) One of the subsidiaries, Visual Products Limited, has entered into a lease agreement with Beautiking Investments Limited to lease office spaces for a period of 2 years commencing 1 April 2004 at monthly rental of HK$10,000. The lease was entered into on normal commercial terms.

19. Interim dividend

The Directors do not recommend the payment of an interim dividend for the period under review (for the six months ended 30 September 2004: Nil).

– 77 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. STATEMENT OF UNAUDITED PRO FORMA CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

The unaudited pro forma financial information prepared in accordance with Rule 4.29 of the Listing Rules is set out below to illustrate the effect of the Open Offer on the consolidated net tangible assets of the Group as if the Open Offer had taken place on 30 September 2005.

The pro forma financial information has been prepared for illustrative purposes only and, because of its nature, it may not give a true picture of the financial position of the Group following the Open Offer.

The following statement of unaudited pro forma consolidated net tangible assets of the Group has been prepared based on the published unaudited 2005 Interim Report as shown in the “Financial information of the Group” as set out in this Appendix and adjusted for the effect of the Open Offer:

As at Estimated net 30 September proceeds from 2005 the Open Offer HK$’000 HK$’000 (Note 1) (Note 2) Unaudited consolidated net tangible assets attributable to the Group 54,520 175,500 Unaudited consolidated net tangible asset value per Share as at 30 September 2005 based on 180,000,000 Shares in issue Unaudited pro forma consolidated net tangible asset value per Share immediately following the completion of the Open Offer based on 540,000,000 Shares issued and to be issued	Pro forma HK$’000 230,020
	HK$0.30
	HK$0.43

Notes:

1. The unaudited consolidated net tangible assets of the Group as at 30 September 2005 is calculated as follows:

Unaudited consolidated net assets of the Group as at 30 September 2005 Less: Goodwill Unaudited consolidated net tangible assets of the Group as at 30 September 2005	HK$’000 61,058 (6,538)
	54,520

1. The estimated net proceeds from the Open Offer are based on 360,000,000 Offer Shares to be allotted at the subscription price of HK$0.50 per Offer Share and after deducting the estimated expenses directly attributable to the Open Offer.

– 78 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. REPORT ON THE STATEMENT OF UNAUDITED PRO FORMA CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, received from CCIF CPA Limited, the auditors of the Company, in connection with the statement of unaudited pro forma consolidated net tangible assets of the Group.

==> picture [87 x 71] intentionally omitted <==

1 March 2006

The Directors

Uni-Bio Science Group Limited Room 2302, 23/F. Lippo Centre Tower II 89 Queensway Admiralty Hong Kong

Dear Sirs,

We report on the statement of unaudited pro forma consolidated net tangible assets (the “Pro Forma Financial Information”) of Uni-Bio Science Group Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) set out on page 78 of Appendix I of the Company’s circular dated 1 March 2006 (the “Circular”) in connection with the proposed open offer on the basis of three offer shares for every existing ordinary share held (the “Open Offer”), which has been prepared by the directors of the Company for illustrative purposes only, to provide information about how the Open Offer might have affected the relevant financial information presented.

Responsibilities

It is the responsibility solely of the directors of the Company to prepare the Pro Forma Financial Information in accordance with paragraph 29 of Chapter 4 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”).

It is our responsibility to form an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

– 79 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Basis of opinion

We conducted our work with reference to the Statements of Investment Circular Reporting Standards and Bulletin 1998/8 “Reporting on Pro Forma Financial Information pursuant to the Listing Rules” issued by the Auditing Practices Board in the United Kingdom, where applicable. Our work, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the directors of the Company.

Our work does not constitute an audit or a review in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants, and accordingly, we do not express any such audit or review assurance on the Pro Forma Financial Information.

The Pro Forma Financial Information has been prepared on the basis set out on page 78 of Appendix I to the Circular for illustrative purpose only and, because of its nature, it may not be indicative of the financial position of the Group as at 30 September 2005 or at any future date.

Opinion

In our opinion:

• (a) the accompanying Pro Forma Financial Information has been properly compiled on the basis as stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the Pro Forma Financial Information as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Yours faithfully,

CCIF CPA Limited Certified Public Accountants Chan Wai Dune, Charles

Practising Certificate Number P00712 Hong Kong

– 80 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

7. INDEBTEDNESS

Borrowings

As at the close of business on 31 January 2006, being the latest practicable date for the purpose of this indebtedness statement, the Group had the following outstanding bank and other borrowings:

• (a) secured bank overdrafts of approximately HK$1.2 million;

• (b) secured bank loans of approximately HK$12.0 million;

• (c) obligations under finance leases of approximately HK$1.1 million;

• (d) unsecured loans from former directors of approximately HK$6.1 million;

• (e) unsecured loans of approximately HK$0.5 million from the companies controlled by a former director; and

• (f) secured other loans of approximately HK$29.2 million.

Securities and guarantees

The details of the securities and guarantees relating to the Group’s borrowings were set out as follows:

• (a) bank overdrafts were secured by charges over the Group’s bank deposits of approximately HK$1.0 million;

• (b) bank loans were secured by charges over the Group’s bank deposits of approximately HK$13 million;

• (c) other loans of approximately HK$23.2 million were secured by first charges over the Group’s plant and machinery with an aggregate net book value of approximately HK$58.1 million; and

• (d) other loans of approximately HK$6.0 million were secured by fixed charges over certain of the Group’s plant and machinery and floating charges over the Group’s trade receivables.

Disclaimer

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, the Group did not have outstanding, at the close of business on 31 January 2006, any loan capital issued and outstanding or agreed to be issued, bank overdrafts, other loans or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credits, hire purchase commitments, debentures, mortgages, charges, guarantees or other material contingent liabilities.

No material change

The Directors have confirmed that there had not been any material change in the indebtedness and contingent liabilities of the Group since 31 January 2006.

8. WORKING CAPITAL

The Directors are of the opinion that, taking into account the cashflow generated from the operating activities, the financial resources available for the Group, including internally generated funds, the available credit facilities and the estimated net proceeds of the Open Offer, the Group has sufficient working capital for its present requirements.

9. MATERIAL CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position or prospects of the Group since 31 March 2005, the date to which the latest published audited financial statements of the Company were made up.

– 81 –

GENERAL INFORMATION

APPENDIX II

1 RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular (other than that in relation to Automatic Result) and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts not contained in this circular (other than those in relation to Automatic Result) the omission of which would make any statement herein misleading.

The sole director of Automatic Result accepts full responsibility for the accuracy of the information contained in this circular (other than those in relation to the Group) and confirms, having made all reasonable enquiries, that to the best of his knowledge, opinions expressed in this circular have been arrived at after due and careful consideration and there are no other facts not contained herein (other than those in relation to the Group) the omission of which would make any statement herein misleading.

2. SHARE CAPITAL OF THE COMPANY

(a) Share capital

The authorized and issued share capital of the Company as at the Latest Practicable Date were, and immediately following completion of the Open Offer will be, as follows:

Authorised share capital: 2,000,000,000 Shares as at the Latest Practicable Date Issued and fully paid share capital: 180,000,000 Shares in issue as at the Latest Practicable Date 360,000,000 Shares to be issued upon completion of the Open Offer 540,000,000 Shares upon completion of the Open Offer	HK$ 200,000,000
	HK$ 18,000,000 36,000,000
	54,000,000

All the issued Shares rank pari passu with each other in all respects including the rights as to voting, dividends and return of capital. The Offer Shares to be allotted and issued will, when issued and fully paid, rank pari passu in all respects with the existing Shares in issue on the date of allotment of the Offer Shares in fully-paid form. The Company had no debt securities in issue as at the Latest Practicable Date.

There has been no alteration to the authorized and issued share capital of the Company since the end of the last financial year of the Company, being 31 March 2005, up to the Latest Practicable Date.

– 82 –

GENERAL INFORMATION

APPENDIX II

(b) Share options

There were no outstanding option under the share option scheme of the Company adopted on 22 October 2001. The Board confirms that no share options will be granted under the share option scheme prior to completion of the Open Offer.

(c) Convertible securities

The Company has not issued any options, warrants, derivatives or securities convertible or exchangeable into Shares since 31 March 2005, being the date to which the latest published audited consolidated accounts of the Group were made up. As at the Latest Practicable Date, there were no outstanding options, warrants, derivatives or securities convertible or exchangeable into the Shares.

3. DISCLOSURE OF DIRECTORS AND CHIEF EXECUTIVES OF THE COMPANY

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executives of the Company and their respective Associates in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), as required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or as recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers were as follows:

						Percentage
						of the
	The Company/		Number of	Interest		issued share
	Name of		issued	in	Total	capital
Name of	associated		Shares	underlying	Interest	of the
Director	corporation	Capacity	held	Shares	(L)	Company
Tong	The Company	Interest of a	95,000,000	360,000,000	455,000,000	84.26%
Kit Shing		controlled				(Note 2)
		corporation
		(Notes 3 and 4)
Liu Guoyao	Automatic	Interest of a	95,000,000	360,000,000	455,000,000	84.26%
	Result	controlled				(Note 2)
		corporation
		(Notes 3 and 4)

Notes:

1. The letter “L” represents the interests in the shares and the underlying shares in the Company or its associated corporation(s).

1. The percentage holding is calculated by the number of Shares interested or deemed to be interested bears to the total number of issued Shares of 540,000,000 Shares assuming the Open Offer has become effective as at the Latest Practicable Date.

– 83 –

GENERAL INFORMATION

APPENDIX II

1. These Shares are held by Automatic Result, the entire issued share capital of which is solely and beneficially owned by Mr Tong. Mr Tong (being the sole shareholder of Automatic Result) and Mr Liu (being the sole director of Automatic Result) is deemed to be interested in all the interest in Shares held by Automatic Result by virtue of the SFO.

2. As at the Latest Practicable Date, Automatic Result beneficially owned 95,000,000 Shares. Automatic Result was also interested in (i) the pro-rata entitlement of 190,000,000 Offer Shares for which it has undertaken to subscribe under the Underwriting Agreement and (ii) the 170,000,000 Offer Shares pursuant to its underwriting commitment under the Underwriting Agreement.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in any shares, underlying shares or debenture of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which are 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 were taken or deemed to have under the SFO) or were recorded in the register required to be kept by the Company under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers.

4. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, as far as is known to any Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had, or were deemed to have an interest or short position in the Shares and underlying Shares which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or recorded in the register kept by the Company pursuant to Section 336 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 the Company or any other members of the Group.

					Percentage
			Interest		of the issued
			in		share capital
		Number of	underlying	Total	of the
Name of Shareholder	Capacity	issued Shares held	Shares	interest	Company
Automatic Result	Beneficial owner	95,000,000	360,000,000	455,000,000	84.26%
(Note 2)			(Note 3)		(Note 1)

Notes:

1. The percentage holding is calculated by the number of Shares interested or deemed to be interested bears to the total number of issued Shares of 540,000,000 Shares assuming the Open Offer has become effective as at the Latest Practicable Date.

2. The entire issued share capital of Automatic Result is solely and beneficially owned by Mr Tong. Mr Tong is deemed to be interested in all the interest in Shares held by Automatic Result by virtue of the SFO. Mr Liu is an the sole director of Automatic Result and is also deemed to be interested in the above Shares by virtue of the SFO.

3. Pursuant to the terms of the Underwriting Agreement, Automatic Result is interested in the pro-rata entitlement of 190,000,000 Offer Shares which it has undertaken to subscribe. In addition, Automatic Result is further interested in 170,000,000 Offer Shares pursuant to its underwriting commitment under the Underwriting Agreement.

– 84 –

GENERAL INFORMATION

APPENDIX II

Save as disclosed herein, there is no person known to the Directors, who, as at the Latest Practicable Date, had an interest or short position in the Shares and 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 10% or more of the normal value of any class of Shares carrying rights to vote in all circumstances at general meetings of the Company or any other members of the Group.

5. OTHER DISCLOSURE OF INTERESTS

• (a) As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any asset which have been since 31 March 2005, 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.

• (b) Save for the Underwriting Agreement, no Director had a beneficial interest in any material contract to which the Company or any of its subsidiaries was a party for the two years period immediately preceding the Latest Practicable Date.

• (c) None of the Directors or Automatic Result is materially interested in any contract or arrangement subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group (excluding the Underwriting Agreement).

• (d) As at the Latest Practicable Date, none of the Company nor any of its subsidiaries owned or had any interest in the securities of Automatic Result.

• (e) None of the subsidiaries of the Company, nor pension funds of the Company or of a subsidiary of the Company, nor any fund managed on a discretionary basis by any fund manager connected with the Company had any interest in the securities of the Company or Automatic Result as at the Latest Practicable Date.

• (f) As at the Latest Practicable Date, there was no agreement, arrangement or understanding between Automatic Result and parties acting in concert with it and other persons that the Offer Shares to be acquired by Automatic Result under the Underwriting Agreement will be transferred to that person.

• (g) As at the Latest Practicable Date, as far as the Directors are aware of, none of the Shareholders (other than Automatic Result’s commitment under the Underwriting Agreement) nor any of the Directors has irrevocably committed itself/himself to vote for or against the Open Offer or to accept or reject the Offer Shares provisionally allotted to them.

• (h) As at the Latest Practicable Date, there was no agreement, arrangement or understanding (including any compensation arrangement) existed between Automatic Result or any person acting in concert with it and any of the Directors or Shareholders having any connection with or dependent upon the Open Offer.

– 85 –

GENERAL INFORMATION

APPENDIX II

6. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract with any member of the Group which is not determinable within one year without payment of compensation (other than statutory compensation).

7. SECRETARY AND QUALIFIED ACCOUNTANT

The secretary of the Company is Mr Hong Kin Choy, a fellow member of the Association of Chartered Certified Accountants and a fellow member of the Hong Kong Institute of Certified Public Accountants (practising).

8. EXPERTS AND CONSENTS

The following are the qualifications of the experts who have been named in this circular or have given opinions, letters or advice which are contained in this circular:

Name	Qualification
CCIF	Certified Public Accountants
AsiaVest	A licensed corporation under the SFO to carry out types 4, 6 and
	9 regulated activities (advising on securities, advising on corporate
	finance and asset management) under the SFO.

As at the Latest Practicable Date, neither CCIF nor AsiaVest had any beneficial interest in the share capital of any member of the Group or had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group and have any interest, either directly or indirectly, in any assets which have been, since 31 March 2005, being the date to which the latest published audited accounts of the Company 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.

Each of CCIF and AsiaVest has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter/report and/or references to its name, in the form and context in which it respectively appears.

9. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration or claims of material importance which is known to the Directors to be pending or threatened by or against either the Company or any of its subsidiaries.

10. MATERIAL ADVERSE CHANGE

The Directors confirm that there has been no material adverse change in the financial or trading position of the Group since 31 March 2005, being the date to which the latest audited consolidated financial statements of the Group were made up.

– 86 –

GENERAL INFORMATION

APPENDIX II

11. MATERIAL CONTRACTS

Save for the Underwriting Agreement, the Group had not entered into any contracts, not being contracts entered into in the ordinary course of business, which are or may be material, within two years immediately preceding the date of this circular.

12. EXPENSES

The expenses in connection with the Open Offer, including financial advisory fee, underwriting commission, printing, registration, translation, legal and accounting charges are estimated to amount to approximately HK$4,500,000 and are payable by the Company.

13. CORPORATE INFORMATION

Registered office Century Yard Cricket Square Hutchins Drive P. O. Box 2681 G.T. George Town Grand Cayman British West Indies Head office and principal place Room 2302, 23rd Floor of business in Hong Kong Lippo Centre Tower II 89 Queensway Admiralty Hong Kong Company secretary and Mr Hong Kin Choy FCCA, FCPA (practising) Qualified accountant 19A, Wai Wah Court 12Q Smithfield Road Hong Kong Authorised representatives Mr Tong Kit Shing 3B, Evergreen Garden No. 18 Shouson Hill Road Hong Kong

Mr Liu Guoyao Room 2302, 23rd Floor Lippo Centre Tower II 89 Queensway Admiralty, Hong Kong

– 87 –

GENERAL INFORMATION

APPENDIX II

Auditors

Financial adviser to the Company

Legal adviser to the Company as to Hong Kong law

Legal adviser to the Company as to the Cayman Islands law in relation to the Open Offer

Principal share registrar and transfer office

Hong Kong branch share registrar and transfer office

CCIF CPA Limited Certified Public Accounts 37/F, Hennessy Centre 500 Hennessy Road Causeway Bay Hong Kong

REXCAPITAL (Hong Kong) Limited 34/F., COSCO Tower Grand Millennium Plaza 183 Queen’s Road Central Hong Kong

Chiu & Partners 41st Floor, Jardine House 1 Connaught Place Hong Kong

Conyers Dill & Pearman Century Yard Cricket Square Hutchins Drive P. O. Box 2681 G.T. George Town Grand Cayman British West Indies

Bank of Bermuda (Cayman) Limited 3/F, 36C Bermuda House P.O. Box 513 G.T. North Church Street, George Town Grand Cayman, Cayman Islands British West Indies

Abacus Share Registrars Limited 26th Floor, Tesbury Centre 28 Queen’s Road East Wanchai Hong Kong

– 88 –

GENERAL INFORMATION

APPENDIX II

Principal Bankers

Bank of China (Hong Kong) Limited Shop B1 318-328 King’s Road North Point Hong Kong DBS Bank (Hong Kong) Limited Ground Floor, The Center 99 Queen’s Road Central, Hong Kong The Hongkong and Shanghai Banking Corporation Limited Shop No. 1-11 Ground Floor, Block B Walton Estate Chai Wan Hong Kong Fubon Bank (Hong Kong) Limited Ground Floor, Fubon Bank Building 38 Des Voeux Road Central, Hong Kong Bank of Communications Co., Ltd. Hong Kong Branch No. 563 Nathan Road Kowloon Hong Kong

14. MISCELLANEOUS

• (a) Save as disclosed in this circular, none of the Directors, CCIF nor AsiaVest has, or had any direct or indirect interest in any assets which have been acquired, disposed of or leased to or which are proposed to be acquired, disposed of or leased to the Company or any member of the Group since 31 March 2005, being the date to which the latest published audited accounts of the Company were made up.

• (b) The registered office of Automatic Result is P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

• (c) The English text of this circular shall prevail over the Chinese text in the case of any inconsistency.

– 89 –

GENERAL INFORMATION

APPENDIX II

15. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the principal office of the Company in Hong Kong at Room 2302, 23rd Floor, Lippo Centre Tower II, 89 Queensway, Admiralty, Hong Kong from the date of this circular up to and including 17 March 2006 and at the EGM (and any adjournment thereof):

• (a) this circular;

• (b) the memorandum of association and articles of association of the Company and the memorandum and articles of association of Automatic Result;

• (c) the letter from the Independent Board Committee, the text of which is set out on page 20 of this circular;

• (d) the material contract referred to under the paragraph headed “Material Contracts” in this Appendix;

• (e) the letter from AsiaVest to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 21 to 35 of this circular;

• (f) the audited financial statements of the Company for the years ended 31 March 2004 and 31 March 2005;

• (g) the report on the pro forma financial information of the Group from CCIF, the text of which is reproduced in Appendix 1 to this circular; and

• (h) the written consents referred to under the section headed “Experts and Consents” in this Appendix.

– 90 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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(incorporated in the Cayman Islands with limited liability) (Stock Code: 690)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Uni-Bio Science Group Limited (the “ Company ”) will be held at 10:00 a.m. on Friday, 17 March 2006 at Room 2302, 23rd Floor, Lippo Centre Tower II, 89 Queensway, Admiralty, Hong Kong, for the purposes of considering and, if thought fit, passing, with or without modification, the following ordinary resolutions:

ORDINARY RESOLUTIONS

• (1) “ THAT conditional upon (a) the Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting or agreeing to grant (subject to allotment) and not having revoked the listing of and permission to deal in the Offer Shares (as defined below) in their fully-paid forms, which are to be allotted and issued to the shareholders of the Company pursuant to the terms and conditions of the Open Offer (as defined below); (b) the registration of all documents relating to the Open Offer required by law to be registered with the Registrar of Companies in Hong Kong; and (c) the obligations of Automatic Result Limited (the “ Underwriter ”) under the underwriting agreement dated 14 February 2006 (as varied, modified and supplemented by a supplemental agreement dated 28 February 2006) (collectively, the “ Underwriting Agreement ”, a copy of which has been produced to the meeting marked “A” and signed by the chairman of the meeting for the purpose of identification) becoming unconditional and the Underwriting Agreement not being terminated in accordance with the terms thereof on or before 4:00 p.m. on the third business day following the last day for application for the Offer Shares,

• (i) the issue by way of an open offer (the “ Open Offer ”) of 360,000,000 new ordinary shares (the “ Offer Shares ”) of HK$0.10 each in the capital of the Company to the shareholders of the Company whose names appear on the register of members of the Company on 17 March 2006 (excluding those shareholders, if any, with registered addresses outside Hong Kong) in the proportion of two Offer Shares for every ordinary share of HK$0.10 each in the capital of the Company then held and otherwise pursuant to and in accordance with the terms and conditions set out in the circular dated 1 March 2006 despatched to shareholders of the Company (the “ Circular ”, a copy of which has been produced to the meeting marked “B” and signed by the chairman of the meeting for the purpose of identification) be and it is hereby approved;

• (ii) the directors (the “ Directors ”) of the Company be and they are hereby authorised to allot and issue the Offer Shares pursuant to or in connection with the Open Offer notwithstanding that the same may be offered, allotted or issued otherwise than pro rata to the existing shareholders of the Company and, in particular, the Directors be

• For identification purposes only

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NOTICE OF EXTRAORDINARY GENERAL MEETING

and they are hereby authorised to make such exclusions or other arrangements in relation to fractional entitlements or overseas shareholders as they deem necessary or expedient having regard to any restrictions or obligation under the laws of, or the requirements of or the likely expenses and delay that may be incurred in determining the extent of any such restrictions, obligations or requirement of any recognised regulatory body or any stock exchange in, any territory applicable to the Company;

• (iii) the Underwriting Agreement and the transactions contemplated thereby be and the same are hereby approved, confirmed and ratified; and

• (iv) the Directors be and they are hereby authorised to sign and execute such documents and do all such acts and things incidental to the Open Offer or as they consider necessary or expedient in connection with the implementation of or giving effect to the Open Offer, the Underwriting Agreement and the transactions contemplated thereunder, including the satisfaction or fulfilment of any conditions to which the Open Offer is subject (subject to such variations which the Directors may consider necessary, desirable and in the best interest of the Company).”

• (2) “ THAT subject to the passing of Resolution numbered (1) above, the directors (“ Directors ”) of the Company be and they are hereby unconditionally and specifically authorised to allot and issue such number of new ordinary shares of HK$0.10 each in the capital of the Company (the “ Special Mandate ”) as may be required to be allotted and issued pursuant to or in connection with the Open Offer (as defined in Resolution numbered (1) above) and that the Special Mandate is in addition to, and shall not prejudice or revoke the existing general mandate to issue shares granted to the Directors by the shareholders of the Company at the annual general meeting of the Company held on 30 August 2005 or such other general or special mandate(s) to issue shares which may from time to time be granted to the Directors prior to the passing of this Resolution.”

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

Hong Kong, 1 March 2006

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered office: Century Yard Cricket Square Hutchins Drive P.O. Box 2681 G.T. George Town Grand Cayman British West Indies

Head office and principal place of business in Hong Kong: Room 2302, 23rd Floor Lippo Centre Tower II 89 Queensway Admiralty, Hong Kong

Notes:

• 1 A member of the Company entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy or, if he is the holder of two or more shares, more than one proxy to attend and, subject to the provisions of the articles of association of the Company, vote in his stead. A proxy need not be a member of the Company. A form of proxy for use at the meeting is enclosed herewith.

• 2 To be valid, the form of proxy together with a power of attorney or other authority, if any, under which it is signed or a certified copy of such power or authority must be deposited with the Company’s Hong Kong branch share registrar and transfer office, Abacus Share Registrars Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not later than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

• Completion and return of the accompanying form of proxy will not preclude members of the Company from attending and voting in person at the meeting or any adjournment thereof should they so wish.

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

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