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 a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Universal Technologies Holdings Limited, you should at once hand this circular and the enclosed form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or the transfer was effected for transmission to the purchaser(s) or transferee(s).

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

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1026)

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

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

==> picture [97 x 41] intentionally omitted <==

A letter from the Board is set out on pages 4 to 15 of this circular. A letter from the Independent Board Committee is set out on page 16 of this circular. A letter from TC Capital, the Independent Financial Adviser, containing its recommendations to the Independent Board Committee and the Independent Shareholders is set out on pages 17 to 35 of this circular.

A notice for convening the special general meeting (the ‘‘SGM’’) of the Company to be held at 11: 00 a.m. on 27 July 2012 (Friday) at Units 601–608, 6/F, Harbour View Two, Phase Two, Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong is set out on pages 41 to 42 of this circular. A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time for holding the SGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

12 July 2012

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . .	16
LETTER FROM TC CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41

– i –

DEFINITIONS

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

‘‘Articles’’ the articles of association of the Company; ‘‘Beihai Shiji’’ 北海石基信息技術有限公司 (Beihai Shiji Information Technology Co., Ltd.), a company incorporated in the PRC with limited liability;
‘‘Beihai Shiji the agreement dated 8 June 2012 entered into between Beihai Agreement’’ Shiji (as purchaser) and eCommerce (as seller) in respect of the sale and purchase of the 7.5% equity interests in ECPAY;
‘‘Board’’ the board of Directors; ‘‘Chiyi’’ 上海馳藝投資合夥企業(普通合夥) (Shanghai Chiyi Investment Partnership Enterprise (General Partnership)), a general partnership established under the PRC laws;
‘‘Chiyi Agreement’’ the agreement dated 8 June 2012 entered into between Chiyi (as purchaser) and eCommerce (as seller) in respect of the sale and purchase of the 9.99% equity interests in ECPAY;
‘‘Company’’ Universal Technologies Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange;
‘‘Comparable Computer and Technologies Holdings Limited (stock code: Companies’’ 00046); Founder Holdings Limited (stock code: 00418); Automated Systems Holdings Limited (stock code: 00771); Capinfo Company Limited (stock code: 01075); and Qianlong Technology International Holdings Limited (stock code: 01236), all of which are listed on the Stock Exchange;
‘‘connected person’’ having the meaning as ascribed to it under the Listing Rules; ‘‘Directors’’ the directors of the Company; ‘‘Disposals’’ the proposed disposals of 9.99% and 7.5% equity interests in ECPAY by eCommerce to Chiyi and Beihai Shiji pursuant to Chiyi Agreement and Beihai Shiji Agreement respectively;
‘‘ECPAY’’ 迅付信息科技有限公司 (Universal ECPAY Limited), a company incorporated in the PRC with limited liability;
‘‘eCommerce’’ 上海環迅電子商務有限公司 (Universal eCommerce China Limited), a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company;

– 1 –

DEFINITIONS

‘‘Group’’	the Company and its subsidiaries;
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the People’s
	Republic of China;
‘‘Independent Board	the committee of the Board comprising Mr. Meng Lihui, Mr.
Committee’’	Fong Heung Sang and Dr. Cheung Wai Bun, Charles, J.P., each
	being an Independent non-executive Director, formed to advise
	the Independent Shareholders on whether the terms and
	conditions of the Disposals are fair and reasonable;
‘‘Independent Financial	TC Capital Asia Limited, the independent financial adviser
Adviser’’ or ‘‘TC	appointed by the Company to advise the Independent Board
Capital’’	Committee and the Independent Shareholders in respect of the
	Disposals and a corporation licensed to carry on Type 1 (dealing
	in securities) and Type 6 (advising on corporate finance)
	regulated activities under the SFO;
‘‘Independent	the Shareholders that are not required to abstain from voting
Shareholders’’	under the Listing Rules if a general meeting is convened to
	approve the Disposals;
‘‘Latest Practicable	9 July 2012, being the latest practicable date prior to the printing
Date’’	of this circular for ascertaining certain information herein;
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange;
‘‘PRC’’	The People’s Republic of China;
‘‘SAIC’’	State Administration for Industry & Commerce of the PRC;
‘‘SFO’’	Securities and Futures Ordinance (Cap.571, Laws of Hong
	Kong);
‘‘Shareholders’’	the holders of the Shares;
‘‘Shares’’	the ordinary shares of HK$0.01 each in the capital of the
	Company;
‘‘SGM’’	the special general meeting of the Company to be convened for
	the purpose of considering and, if thought fit, approving the
	Disposals;
‘‘Stock Exchange’’	The Stock Exchange of Hong Kong Limited;
‘‘subsidiary’’	having the meaning as ascribed to it under the Listing Rules;

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DEFINITIONS

‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong;
‘‘RMB’’	Renminbi, the lawful currency of the PRC; and
‘‘%’’	percent.

Unless otherwise specified in this circular and for illustration purpose only, RMB is translated into HK$ at the rate of HK$1.00 = RMB0.81419. No representation is made that any amounts in RMB have been or could be converted at the above rate or at any other rates or at all.

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LETTER FROM THE BOARD

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1026)

Executive Directors: Mr. Lau Yeung Sang (Chairman) Mr. Xu Hui (Chief Executive Officer) Mr. Chen Runqiang Madam Luan Yumin Mr. Chang Hung Lun

Non-executive Director: Mr. Chow Cheuk Lap

Independent non-executive Directors: Mr. Meng Lihui Mr. Fong Heung Sang Dr. Cheung Wai Bun, Charles, J.P.

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head Office and Principal Place of Business: Units 601–608, 6/F Harbour View Two, Phase Two Hong Kong Science Park Pak Shek Kok New Territories Hong Kong

12 July 2012

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

1. INTRODUCTION

Reference is made to the announcement of the Company dated 8 June 2012 in respect of, among other things, the Disposals.

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LETTER FROM THE BOARD

(HK$45,136,884.51). The completion of the Beihai Shiji Agreement is conditional upon completion of Chiyi Agreement, but completion of the Chiyi Agreement is not conditional upon completion of the Beihai Shiji Agreement.

The Disposals constitute discloseable and connected transactions of the Company under the Listing Rules.

The purpose of this circular is to provide you, among other things, with (i) further details in connection with the Disposals; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; and (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders.

2. CHIYI AGREEMENT

Date

8 June 2012 (after trading hours)

Parties

Purchaser : 上海馳藝投資合夥企業(普通合夥) (Shanghai Chiyi Investment Partnership Enterprise (General Partnership)), a general partnership established under the PRC laws. It currently does not hold any equity interests in ECPAY.
Vendor : 上海環迅電子商務有限公司 (Universal eCommerce China Limited), a company incorporated in the PRC with limited liability and a whollyowned subsidiary of the Company. It is currently a holder of 85% equity interests in ECPAY.

Chiyi is a connected person of the Company as Chiyi is owned as to 53.64% by Madam Luan Yumin, an executive Director. Accordingly, the Chiyi Agreement entered into between eCommerce and Chiyi is a connected transaction for the Company.

Assets to be disposed

9.99% equity interests in ECPAY

Consideration and payment

The consideration of RMB12,765,500 (HK$15,678,772.77) is payable by Chiyi in cash within 15 days after obtaining the approval on the Chiyi Agreement and the transactions contemplated thereunder by the Independent Shareholders at the SGM.

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LETTER FROM THE BOARD

The consideration was determined after arm’s length negotiation between Chiyi and eCommerce with reference to the following factors (i) the business and financial performance of ECPAY; (ii) the average price to earnings ratio (i.e. 7.22 times) of five Comparable Companies engaging in computer software and related services in the PRC and Hong Kong; and (iii) the relative illiquidity of the equity interests in ECPAY as compared to the shares of those Comparable Companies, and taking into account (i) Chiyi is owned by ECPAY’s employees; (ii) the equity transfer under the Chiyi Agreement is to provide incentive to ECPAY’s employees who have provided significant contributions to ECPAY; and (iii) the undertakings of the ECPAY employees as set out in the paragraph headed ‘‘Undertakings of ECPAY’s employees’’ below.

As the Company considers that the five Comparable Companies are the closest comparable in terms of their industry and size, the Company considers that the sample size and the Comparable Companies selected represents a fair and representative sample to compare the price to earnings ratio of ECPAY. Based on the average price to earnings ratio of the five Comparable Companies, ECPAY is valued at RMB170,974,317.26 (HK$209,993,143.20) in total and the consideration under the Chiyi Agreement is set at a 25.26% discount to such valuation.

Completion

The completion of the Chiyi Agreement is not conditional upon the completion of the Beihai Shiji Agreement.

The completion of Chiyi Agreement is conditional upon the obtaining of all necessary authorisation and approval on the Chiyi Agreement and the transactions contemplated thereunder as required by applicable laws and regulations (including the approval of the Independent Shareholders at the SGM).

Other terms

The parties will bear their own respective costs and expenses arising from the preparation, negotiation, and execution of the Chiyi Agreement, while ECPAY will bear the costs and expenses arising from the registration of the changes in shareholders of ECPAY with the SAIC.

3. UNDERTAKINGS OF ECPAY’S EMPLOYEES

As part of the incentive scheme under the Chiyi Agreement, each of the owners of Chiyi has given an undertaking to remain in service with ECPAY for not less than three additional years. During this three-year period, each of them undertakes not to dispose any of his/her interests in Chiyi. Should any of such owners does not remain in service with ECPAY for whatever reasons within this three-year period, eCommerce has a right to nominate a party (not being any members of the Group) to acquire his/her attributable interests in ECPAY at a consideration determined with reference to the audited net asset value of ECPAY as at the year end of the then preceding financial year (inclusive of any dividends declared to him/her during the then preceding financial year and the then current

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LETTER FROM THE BOARD

financial year). In such case, eCommerce will, taking into account the then existing circumstances, nominate ECPAY’s employees to acquire his/her attributable interests in ECPAY.

For the specific situations where such owner is terminated pursuant to Article 39 of the PRC Labour Contract Law, such owner is only entitled to receive part of the consideration which shall not be more than the sum of the original acquisition cost and the return that such owner would obtain based on the then prevailing floating deposit rate as determined by People’s Bank of China, with the remaining consideration (if any) to be paid to a party as nominated by eCommerce. Article 39 of the PRC Labour Contract Law provides that an employer may terminate an employment contract if the employee: (a) is proved not to satisfy the conditions for employment during the probation period; (b) materially breaches the employer’s rules and regulations; (c) commits serious dereliction of duty or practices graft, causing substantial damage to the employer; (d) has additionally established an employment relationship with another employer which materially affects the completion of his tasks with the first-mentioned employer, or he refuses to rectify the matter after the same is brought to his attention by the employer; (e) causes the employment contract to be invalid due to the circumstance specified in item (1) of the first paragraph of Article 26 of the PRC Labour Contract Law (i.e. a party uses such means as deception or coercion, or takes advantage of the other party’s difficulties, to cause the other party to conclude an employment contract, or to make an amendment thereto, that is contrary to that party’s true intent); or (f) has his criminal liability pursued in accordance with the law.

The majority owners of Chiyi which hold 10% or more interests in Chiyi, including Madam Luan Yumin, our executive Director, have given an additional undertaking to transfer not less 30% of their equity interests in Chiyi to other ECPAY’s employees as determined by ECPAY as incentive within the three-year period.

The Company and ECPAY have evaluated each ECPAY’s employee his/her past contribution to the growth and success of ECPAY as well as his/her potential contribution to the future growth and development of ECPAY. ECPAY was acquired by the Company in late 2008 and the owners of Chiyi, except one of them, joined immediately after the acquisition. The Company and ECPAY acknowledge that the owners of Chiyi play important strategic roles in ECPAY such as ensuring regulatory compliance, employee and overall management of ECPAY, safeguarding clients’ monies and maintaining relationship with banks, as well as daily operations and risks control. Aside from these senior management roles, key employees of ECPAY that handle critical operations of each department are also assessed for their contribution to ECPAY.

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LETTER FROM THE BOARD

4. BEIHAI SHIJI AGREEMENT

Date

8 June 2012 (after trading hours)

Parties

Purchaser : 北海石基信息技術有限公司 (Beihai Shiji Information Technology Co., Ltd.), a company incorporated in the PRC with limited liability. It is currently a holder of 15% equity interests in ECPAY.

Vendor : 上海環迅電子商務有限公司 (Universal eCommerce China Limited), a company incorporated in the PRC with limited liability and a whollyowned subsidiary of the Company. It is currently a holder of 85% equity interests in ECPAY.

Beihai Shiji is a connected person of the Company by virtue of its 15% existing equity interests in ECPAY, which is an indirect non-wholly owned subsidiary of the Company. Accordingly, the Beihai Shiji Agreement entered into between eCommerce and Beihai Shiji is a connected transaction for the Company.

Assets to be disposed

7.5% equity interests in ECPAY

Consideration and payment

The consideration of RMB36,750,000 (HK$45,136,884.51) is payable by Beihai Shiji in cash within 15 days after obtaining the approval on the Beihai Shiji Agreement and the transactions contemplated thereunder by the Independent Shareholders at the SGM.

The consideration was determined after arm’s length negotiation between Beihai Shiji and eCommerce with reference to the following factors (i) the business and financial performance of ECPAY; (ii) the average price to earnings ratio (i.e. 7.22 times) of five Comparable Companies engaging in computer software and related services in the PRC and Hong Kong; (iii) the relative illiquidity of the equity interests in ECPAY as compared to the shares of those Comparable Companies; and (iv) the incentive scheme adopted by ECPAY which encourages the key employees to devote themselves to serve ECPAY.

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LETTER FROM THE BOARD

to earnings ratio of the five Comparable Companies, ECPAY is valued at RMB170,974,317.26 (HK$209,993,143.20) in total and the consideration under the Beihai Shiji Agreement is set at a 187% premium to such valuation.

Completion

The completion of the Beihai Shiji Agreement is conditional upon the completion of the Chiyi Agreement.

The completion of Beihai Shiji Agreement is also conditional upon the obtaining of all necessary authorisation and approval on the Beihai Shiji Agreement and the transactions contemplated thereunder as required by applicable laws and regulations (including the approval of the Independent Shareholders at the SGM).

Other terms

Beihai Shiji, as an equity owner of ECPAY, acknowledges that, in order to provide incentive to ECPAY’s employees, eCommerce will transfer 9.99% equity interests to Chiyi (which is held by ECPAY’s employees) under the Chiyi Agreement and agrees to waive any pre-emptive rights in respect of such transfer.

Upon the registration of the changes in shareholders of ECPAY with the SAIC, the full settlement of the consideration and the completion of the Beihai Shiji Agreement, Beihai Shiji is entitled to appoint one director to the board of ECPAY immediately thereafter and appoint the assistant finance manager to ECPAY three years thereafter.

The existing board of ECPAY consists of three directors, including Madam Luan Yumin. Two additional directors will be appointed to the board of ECPAY, including Su Wen being nominated by Beihai Shiji. Su Wen, aged 37, obtained a bachelor of accounting from Xian Jiaotong University. She has held various senior management positions and directorships in technology companies in the PRC.

Beihai Shiji is granted a right to appoint an assistant finance manager to ECPAY three years thereafter because Beihai Shjiji is the second largest equity owner and the appointment would reinforce the financial risk management of ECPAY in the future.

The parties agree that, subject to shareholders’ approval of ECPAY, the annual dividends payout ratio of ECPAY should not be less than 15% of its distributable profits as permitted by laws.

The parties will bear their own respective costs and expenses arising from the preparation, negotiation, and execution of the Beihai Shiji Agreement, while ECPAY will bear the costs and expenses arising from the registration of the changes in shareholders of ECPAY with the SAIC.

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LETTER FROM THE BOARD

5. DIFFERENCES BETWEEN CHIYI AGREEMENT AND BEIHAI SHIJI AGREEMENT

Both the respective considerations under the Chiyi Agreement and Beihai Shiji Agreement were determined after arm’s length negotiations between the relevant parties. The consideration under the Chiyi Agreement is set at a 73.92% discount to the consideration under Beihai Shiji Agreement because:

(a) Chiyi is owned by ECPAY’s employees and the equity transfer under the Chiyi Agreement is to provide incentive to ECPAY’s employees;
(b) the Directors consider that the equity transfer under the Chiyi Agreement is the best option to increase the sense of belonging and motivation of ECPAY’s employees, which are important to ECPAY’s growth and development;
(c) the ECPAY’s employees have given undertakings as set out in the paragraph headed ‘‘Undertakings of ECPAY’s employees’’ in this circular;
(d) the Beihai Shiji Agreement is conditional upon the Chiyi Agreement; and
(e) the Directors noted that there are some software companies, which adopt similar incentive schemes, allow their employees to acquire shares (usually 10% or less) at no consideration or at a consideration set below the attributable net asset value, whereas the consideration under the Chiyi Agreement is not less than the attributable audited net asset value of ECPAY as at 31 December 2011.

On the basis of the above, the Directors consider that the terms of the Disposals including their respective considerations are on normal commercial terms, fair and reasonable so far as the Shareholders are concerned and the Disposals are in the interests of the Company and the Shareholders as a whole.

6. INFORMATION ON ECPAY

ECPAY is an internet-based e-commerce service provider in the PRC. The e-commerce service industry has become fiercely competitive in recent years, driving the obvious trends for enterprises to upgrade their services and expand their scales. In order to enlarge its market share and enhance its competitive edges, ECPAY will, in addition to providing more value-added services to its existing customers, consider opportunities to specialise in some specific fields, including the education industry as well as the hotel and catering industry which Beihai Shiji specialises in, with a goal to attain a leading market position in these specific fields.

– 10 –

LETTER FROM THE BOARD

The audited financial information of ECPAY prepared on basis consistent with generally accepted accounting practices and principles in the PRC are set out as below:

		For the year ended	For the year ended
	31 December 2010 or		31 December 2011 or
		as at 31 December	as at 31 December
		2010	2011
Net profits/(loss) (before taxation and
extraordinary items)		(RMB243,890.33)	RMB23,680,653.36
Net profits/(loss) (after taxation and
extraordinary items)		(RMB243,890.33)	RMB23,680,653.36
Net assets	RMB104,102,544.15		RMB127,783,197.51

In 2010, given that ECPAY was still at the developing stage, ECPAY suffered a loss. In 2011, after the official launch of its suite of products and services, ECPAY turned loss into profits.

Upon completion of the Disposals, ECPAY will remain a subsidiary of the Company and its results will continue to be consolidated into the Group’s financial results.

At the date of the Latest Practicable Date, the simplified shareholding structure of ECPAY is set out below:

==> picture [285 x 122] intentionally omitted <==

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

eCOMMERCE BEIHAI SHIJI
85% 15%
ECPAY
----- End of picture text -----

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LETTER FROM THE BOARD

Upon completion of the Disposals, the simplified shareholding structure of ECPAY is set out below:

==> picture [375 x 122] intentionally omitted <==

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

CHIYI eCOMMERCE BEIHAI SHIJI
9.99% 67.51% 22.50%
ECPAY
----- End of picture text -----

7. USE OF PROCEEDS

As the Group will still retain control over ECPAY after the Disposals, the Company does not expect to record any gain or loss on disposal in its consolidated income statement for the current financial year ending 31 December 2012. After deducting estimated expenses of approximately HK$1,000,000, the net proceeds from the Disposals are estimated to be approximately RMB48,701,310 (HK$59,815,657.28) and will be utilized as general working capital for the Group.

8. REASONS FOR THE DISPOSALS

The Group is principally engaged in investment holding, provision of payment solution and related services, timber trading and furniture manufacturing, system integration and technical platform services, property investment and building management.

The payment solutions business is the largest business segment of the Group, which contributes approximately 84% of the Company’s turnover for the year ended 31 December 2011. In the same financial year, the payment solutions business recorded a tremendous growth of approximately 111% increase in segment revenue. However, as a result of the macro economic downturn, the payment solutions business in Hong Kong was modulated since the second half of 2011 and thus the segment revenue of the payment solutions business for the financial year 2012 might be adversely affected. For details, please refer to the Company’s profit warning announcement dated 24 May 2012.

Being one of the important components of the payment solution business of the Group, ECPAY is an internet-based e-commerce service provider in the PRC. The e-commerce service industry has become fiercely competitive in recent years, driving the obvious trends for enterprises to upgrade their services and expand their scales. In order to enlarge its market share and enhance its competitive edges, ECPAY will, in addition to providing more value-added services to its existing customers, consider opportunities to specialise in some specific fields, including the education industry as well as the hotel and catering industry which Beihai Shiji specialises in, with a goal to attain a leading market position in these specific fields. In order to further strengthen the internet-based e-commerce services in the PRC, the Company therefore proposes to implement the Disposals.

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LETTER FROM THE BOARD

The ECPAY’s employees who own Chiyi have made significant contributions to ECPAY. In order to provide incentive to these valuable employees, eCommerce therefore proposes to transfer 9.99% equity interest in ECPAY to Chiyi. As the Company considers that disposal under the Chiyi Agreement is the best option to increase the sense of belonging and motivation of ECPAY’s employees, which are important to ECPAY’s growth and development, therefore the Company did not consider other alternatives.

On the other hand, Beihai Shiji has been an equity holder of ECPAY and their leading position in the hotel and catering industry in the PRC could assist ECPAY in exploring opportunities for e-commerce services for the hotel and catering industry in the PRC. eCommerce therefore proposes to transfer an additional 7.5% equity interests in ECPAY to Beihai Shiji with a view to increasing Beihai Shiji’s stake in ECPAY, thereby deepening the cooperative relationship between eCommerce and Beihai Shiji as well as fostering the sustainable development of ECPAY.

In view of the above, the Directors are of the view that the terms of the Disposals including their respective consideration are fair and reasonable so far as the Shareholders are concerned and the Disposals are in the interests of the Company and the Shareholders as a whole.

9. EFFECTS OF THE DISPOSALS

As compared with the financial position of the Group for the year ended 31 December 2011, the Directors expect that the Disposals will improve the net asset value, the cash position and the working capital of the Group, however the costs and expenses in the income statement will be enlarged, given that share-based compensation costs, being a noncash item, will be recognised.

10. INFORMATION ON CHIYI & BEIHAI SHIJI

Chiyi is a general partnership established under the PRC laws. It is established in May 2012 by ECPAY’s employees to hold their interests in ECPAY. Chiyi is owned by 11 individuals, being ECPAY’s employees, with their ownership percentage in Chiyi ranging from 0.48% to 53.64%. The owners of Chiyi play important strategic roles in ECPAY, such as ensuring regulatory compliance, employee and overall management of ECPAY, safeguarding clients’ monies and maintaining relationship with banks, as well as daily operations and risks control.

Beihai Shiji is a wholly-owned subsidiary of Beijing Shiji Information Technology Co., Ltd. (‘‘Beihai Shiji Parent’’), which is listed on the Shenzhen Stock Exchange. Beihai Shiji Parent is principally engaged in the development and sale of the applied software for hotel and catering information system.

11. LISTING RULES IMPLICATIONS

Considering that each of the Disposals are agreed on the same day and involves disposals of equity interests in the same entity by the Group, each of the Disposals will be aggregated under Rule 14A.25 of the Listing Rules.

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LETTER FROM THE BOARD

As the applicable percentage ratios for the Disposals under the Listing Rules, after aggregation, are more than 5% and less than 25% and the total consideration is more than HK$10,000,000, the Disposals constitute discloseable and connected transactions for the Company which are subject to the reporting, announcement and the Independent Shareholders’ approval requirements under the Listing Rules.

12. SGM

The SGM will be held at 11: 00 a.m. on 27 July 2012 (Friday) at Units 601–608, 6/F, Harbour View Two, Phase Two, Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong, for the Independent Shareholders to consider and, if thought fit, approve the Disposals and the transactions contemplated thereunder. At the SGM, the votes will be taken by poll.

The notice of the SGM is set out on pages 41 to 42 of this circular.

A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time for holding the SGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

To the best knowledge, belief and information of the Directors, having made all reasonable enquiries, no Shareholder has material interests in the Disposals and is required to abstain from voting on the resolution put forward at the SGM.

To avoid any conflicts of interest, Madam Luan Yumin, who is an executive Director and owns 53.64% equity interests in Chiyi, has abstained from voting on the Board resolution for approving the Disposals. Mr. Liu Rui Sheng, a former executive Director, held the equity interests in eCommerce for and on behalf of the Company as a nominee only. He was therefore not interested in the Disposals and was not required to abstain from voting in the relevant board resolution approving the Disposals. Given that Mr. Liu is not interested in the Disposals, Mr. Lau Yeung Sang, the brother of Mr. Liu and Mr. Xu Hui, who will replace Mr. Liu to hold equity interests in eCommerce for and on behalf of the Company as nominee, being executive Directors, are also not interested in the Disposals, and are therefore not required to abstain from voting in the relevant board resolution to approve the Disposals. Save as disclosed above, none of the Directors has a material interest in the Disposals and was not required to abstain from voting on the relevant Board resolution approving the Disposals.

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LETTER FROM THE BOARD

13. RECOMMENDATIONS

The Company has appointed TC Capital as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Disposals. The text of the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 17 to 35 of this circular.

The Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Meng Lihui, Mr. Fong Heung Sang and Dr. Cheung Wai Bun, Charles, J.P., has been established to give advice to the Independent Shareholders in respect of the Disposals. The letter from the Independent Board Committee, which contains its recommendation to the Independent Shareholders in respect of the Disposals, is set out on page 16 of this circular.

The Board considers that the Disposals are in the interests of the Company and the Shareholders, and the terms and conditions of the Chiyi Agreement and Beihai Shiji Agreement are fair and reasonable so far as the Company and the Shareholders taken as a whole are concerned. Accordingly, the Board recommends the Independent Shareholders to vote in favour of the relevant ordinary resolution to be proposed at the SGM for approving the Chiyi Agreement and Beihai Shiji Agreement and the transactions contemplated thereunder.

14. FURTHER INFORMATION

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

By Order of the Board UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED Lau Yeung Sang Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1026)

12 July 2012

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

We have been appointed as members of the Independent Board Committee to give our advice on the Chiyi Agreement and Beihai Shiji Agreement and the transactions contemplated thereunder, details of which are set out in the letter from the Board included in the circular to the Shareholders dated 12 July 2012 (the ‘‘Circular’’), of which this letter forms a part. Terms used herein shall have the same meanings as those defined in the Circular unless the context otherwise requires.

TC Capital has been appointed as the Independent Financial Adviser to advise us on the Chiyi Agreement and Beihai Shiji Agreement and the transactions contemplated thereunder. The letter from the Independent Financial Adviser is set out on pages 17 to 35 of the Circular.

Having considered the terms and conditions of the Chiyi Agreement and Beihai Shiji Agreement, the advice given by the Independent Financial Adviser and the principal factors and reasons taken into consideration by them in arriving at their advice, we are of the opinion that the Chiyi Agreement and the Beihai Shiji Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders taken as a whole, and the terms and conditions of the Chiyi Agreement and Beihai Shiji Agreement are fair and reasonable so far as the Company and the Shareholders taken as a whole are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM for approving the Chiyi Agreement and Beihai Shiji Agreement and the transactions contemplated thereunder.

Yours faithfully, Independent Board Committee

Mr. Meng Lihui Mr. Fong Heung Sang Dr. Cheung Wai Bun, Charles, J.P. Independent non-executive Independent non-executive Independent non-executive Director Director Director

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LETTER FROM TC CAPITAL

The following is the full text of the letter of advice to the Independent Board Committee and the Independent Shareholders from TC Capital Asia Limited dated 12 July 2012 prepared for incorporation in this circular:

==> picture [192 x 59] intentionally omitted <==

12 July 2012

The Independent Board Committee and the Independent Shareholders Universal Technologies Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTIONS PROPOSED DISPOSAL OF 17.49% EQUITY INTERESTS IN ECPAY TO TWO CONNECTED PERSONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed disposal of 9.99% and 7.5% equity interest in ECPAY to Chiyi and Beihai Shiji for a consideration of RMB12,765,500 (HK$15,678,772.77) and RMB36,750,000 (HK$45,136,884.51) respectively, as described in the letter from the Board (the ‘‘Board Letter’’) contained in the circular to the Shareholders dated 12 July 2012 (the ‘‘Circular’’). Our letter is made for incorporation into the Circular. Capitalized terms used in this letter have the same meanings as those defined in the Circular unless the context otherwise requires.

Background and reasons for the Disposals are set out in the Board Letter in the Circular. Our role as Independent Financial Adviser is to give our opinion as to whether the Disposals are in the interests of the Company and are on normal commercial terms, fair and reasonable insofar as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

As each of the Disposals was agreed on the same day and involves the disposal of the equity interests of the same entity by the Group, each of the Disposals will be aggregated under Rule 14A.25 of the Listing Rules. As the applicable percentage ratios for the Disposals under the Listing Rules, after aggregation, are more than 5% and less than 25% and the total consideration is more than HK$10,000,000, the Disposals constitute discloseable and connected transactions for the Company which are subject to the reporting, announcement and the Independent Shareholders’ approval requirements under the Listing Rules.

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LETTER FROM TC CAPITAL

In formulating our recommendation, we have considered, among other things, (i) the Chiyi Agreement and the Beihai Shiji Agreement; (ii) the Company’s 2011 annual report; (iii) information obtained from the website (www.shijinet.com.cn) of Beijing Shiji Information Technology Co., Ltd. (the ‘‘Shiji IT’’); and (iv) other information as set out in the Circular. We have also relied on information, opinions and facts supplied and represented by the Company, the Directors and the management of the Company. We have assumed that all such information, opinions, facts and representations contained or referred to in the Circular, for which the Company is fully responsible, were true and accurate in all respects as at the date hereof and may be relied upon. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Company, and the Company has confirmed that no material facts have been withheld or omitted from the information provided and referred to in the Circular, which would make any statement therein misleading.

We consider that we have reviewed sufficient information currently available to reach an informed view and to justify our reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis for our recommendation. We have not, however, carried out independent verification of the information, nor have we conducted any form of in-depth investigation into the businesses, affairs, operations, financial position or future prospects of each of the Company, eCommerce, ECPAY, Beihai Shiji and Chiyi.

PRINCIPAL FACTORS AND REASONS CONSIDERED IN RELATION TO THE DISPOSALS

In arriving at our opinion regarding the Disposals in respect of the terms of the Chiyi Agreement and Beihai Shiji Agreement, we have taken into consideration the following factors and reasons:

I. Background for the Chiyi Agreement and Beihai Shiji Agreement

On 8 June 2012, after trading hours, eCommerce, a wholly-owned subsidiary of the Company, entered into (i) the Chiyi Agreement with Chiyi, pursuant to which eCommerce has conditionally agreed to dispose of 9.99% equity interests in ECPAY to Chiyi at a consideration of RMB12,765,500 (HK$15,678,772.77) (the ‘‘Chiyi Disposal’’); and (ii) the Beihai Shiji Agreement with Beihai Shiji, pursuant to which eCommerce has conditionally agreed to dispose of 7.5% equity interests in ECPAY to Beihai Shiji at a consideration of RMB36,750,000 (HK$45,136,884.51) (the ‘‘Shiji Disposal’’). The completion of the Beihai Shiji Agreement is conditional upon completion of Chiyi Agreement, but completion of the Chiyi Agreement is not conditional upon completion of the Beihai Shiji Agreement. Upon completion of the Disposals, ECPAY will remain as a subsidiary of the Company and will be owned as to 67.51% by eCommerce, 22.50% by Beihai Shiji and 9.99% by Chiyi.

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LETTER FROM TC CAPITAL

II. Chiyi Disposal

Key terms of the Chiyi Agreement

Date : 8 June 2012 Parties : (1) Chiyi, as the purchaser; and (2) eCommerce, as the vendor. Subject matter : Disposal of 9.99% equity interests in the paid-in capital of ECPAY. Consideration : RMB12,765,500 (HK$15,678,772.77) Completion : The completion of the Chiyi Agreement is not conditional upon the completion of the Beihai Shiji Agreement.

Other terms : The parties will bear their own respective costs and expenses arising from the preparation, negotiation and execution of the Chiyi Agreement, while ECPAY will bear the costs and expenses arising from the registration of the changes in shareholders of ECPAY with the SAIC.

Payment term

The consideration will be settled by Chiyi in cash within 15 days after obtaining the approval on the Chiyi Agreement and the transactions contemplated thereunder by the Independent Shareholders at the SGM. As 15 days is a reasonable time frame required to process administrative matters in relation to payment of the consideration, we are of the view that the payment term is on normal commercial terms, fair and reasonable, and in the interests of the Company and its Shareholders as a whole.

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LETTER FROM TC CAPITAL

Undertakings of ECPAY’s employees

As part of the incentive scheme under the Chiyi Agreement, each of the owners of Chiyi has given an undertaking to remain in service with ECPAY for not less than three additional years. During this three-year period, each of them undertakes not to dispose any of his/her interests in Chiyi. The majority owners of Chiyi which hold 10% or more interests in Chiyi, including Madam Luan Yumin, an executive Director, have given an additional undertaking to transfer not less than 30% of their equity interests in Chiyi to other ECPAY’s employees as determined by ECPAY as incentive within the three-year period.

We are of the opinion that the three-years period implemented under the aforesaid undertakings is in the interests of the Company as it effectively created a vesting period for the ECPAY shares under the Chiyi Disposal. This will ensure that these ECPAY employees will continue to serve for ECPAY a reasonable period of time. Furthermore, the majority owners undertaking to dispose more than 30% of their equity interests to other ECPAY’s employees can assure other employees will benefit from this equity ownership scheme if they contribute further to ECPAY. As such, we are of the opinion that these undertaking terms are on normal commercial terms, fair and reasonable, and in the interests of the Company and its Shareholders as a whole.

Contribution by owners of Chiyi and employees of ECPAY

The Company presented to us that in determining the eligible employees, they have assessed each employee’s contribution towards the success and growth of ECPAY over the years and also potential future growth of ECPAY. ECPAY was acquired by the Company back in 2008 and the owners of Chiyi, except for one of them, joined immediately after the acquisition. The Company noted that the owners of Chiyi play important strategic roles in ECPAY, such as ensuring government and regulatory compliance, employee and overall management of ECPAY, safeguarding clients’ monies and relationship with banks, and daily operation and risk control. Aside from these senior management roles, key employees of ECPAY that handles critical operation of each department are also assessed for their contributions to ECPAY.

We are of the opinion that the basis used by the Company is fair and reasonable as every employee’s reward is granted in terms of their contributions. The owners of Chiyi, who have good working relationships with banks and government departments, are of great importance to ECPAY as electronic payment involving bank cards in the PRC is a highly regulated industry with significant barrier of entry. As such, awarding the owners of Chiyi and employees of ECPAY under the Chiyi Disposal is fair and reasonable.

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LETTER FROM TC CAPITAL

III. Shiji Disposal

Key terms of the Beihai Shiji Agreement

Date : 8 June 2012 Parties : (1) Beihai Shiji, as the purchaser; and (2) eCommerce, as the vendor. Subject matters : Disposal of 7.5% equity interests in the paid-in capital of ECPAY.

Consideration : RMB36,750,000 (HK$45,136,884.51) Completion : The completion of the Beihai Shiji Agreement is conditional upon the completion of the Chiyi Agreement.

The completion of Beihai Shiji Agreement is conditional upon the obtaining of all necessary authorisation and approval on the Beihai Shiji Agreement and the transactions contemplated thereunder as required by applicable laws and regulations (including the approval of the Independent Shareholders at the SGM).

Other terms : Beihai Shiji, as an equity owner of ECPAY, acknowledges that, in order to provide incentive to ECPAY’s employees, eCommerce will transfer 9.99% equity interests to Chiyi (which is held by ECPAY’s employees) under the Chiyi Agreement and agrees to waive any pre-emptive rights in respect of such transfer.

After completion of the Beihai Shiji Agreement, Beihai Shiji is entitled to appoint one director to the board of ECPAY and an assistant finance manager to ECPAY three years thereafter.

The parties agree that, subject to shareholders’ approval of ECPAY, the annual dividends payout ratio of ECPAY should not be less than 15% of its distributable profits as permitted by laws.

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LETTER FROM TC CAPITAL

The parties will bear their own respective costs and expenses arising from the preparation, negotiation and execution of the Beihai Shiji Agreement, while ECPAY will bear the costs and expenses arising from the registration of the changes in shareholders of ECPAY with the SAIC.

Payment terms

The consideration will be settled by Beihai Shiji in cash within 15 days after obtaining the approval on the Beihai Shiji Agreement and the transactions contemplated thereunder by the Independent Shareholders at the SGM. As 15 days is a reasonable time frame required to process administrative matters in relation to payment of the consideration, we are of the view that the payment term is on normal commercial terms, fair and reasonable, and in the interests of the Company and its Shareholders as a whole.

IV. Consideration

As set out in the Board Letter, the cash consideration of the Chiyi Disposal is RMB12,765,500 (HK$15,678,772.77). The consideration was determined after arm’s length negotiation between Chiyi and eCommerce with reference to (i) the business and financial performance of ECPAY; (ii) the average prevailing price to earnings ratio of approximately 7.22 times of the 5 Comparable Companies of ECPAY in Hong Kong; and (iii) the relative illiquidity of the equity interests in ECPAY as compared to the shares of those Comparable Companies, and taking into account (i) Chiyi is owned by ECPAY’s employees; (ii) the equity transfer under the Chiyi Agreement is to provide incentive to ECPAY’s employees who have provided significant contributions to ECPAY; and (iii) the undertakings of the ECPAY employees.

While the cash consideration of the Shiji Disposal is RMB36,750,000 (HK$45,136,884.51). The consideration was determined after arm’s length negotiation between Beihai Shiji and eCommerce with reference to (i) the business and financial performance of ECPAY; (ii) the average prevailing price to earnings ratio of approximately 7.22 times of the 5 Comparable Companies of ECPAY in Hong Kong; (iii) the relative illiquidity of the equity interests in ECPAY as compared to the shares of those Comparable Companies; and (iv) the incentive scheme adopted by ECPAY which encourages the key employees to devote themselves to serve ECPAY.

In forming our opinion on the fairness and reasonableness of the considerations contemplated under the Disposals, we have conducted a research on companies listed on the Stock Exchange, whose principal activities are mainly engaged in providing internet-based e-commerce services in the PRC, which to the best of our knowledge, representing a close comparison to that of ECPAY. We have not considered companies listed on the PRC stock exchanges because the Company is listed on the Stock Exchange and any meaningful comparison should be made with the companies under a similar capital market with same market dynamics. Based on these criteria, we have

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LETTER FROM TC CAPITAL

identified a total of 7 listed companies (including the Company) on the Stock Exchange (the ‘‘Comparable Epayment Companies’’), with the intention of comparing their respective historical price to earnings ratios (the ‘‘P/E Ratio’’) to the implied P/E Ratio of ECPAY under the Chiyi Agreement and Beihai Shiji Agreement. The following table sets forth certain details of the Comparable Epayment Companies.

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Universal Technologies	1026	Provision of payment	622.2	10.2
Holdings Ltd.		solutions and related
		services, timber trading
		and furniture
		manufacturing, system
		integration and technical
		platform services, property
		investment and building
		management.
DIGITALHONGKONG.COM	8007	Provision of secured	124.5	NA
(Note 3)		electronic payment
		processing platform and
		software licensing services.
Palmpay China (Holdings) Ltd.	8047	Provision of payment	184.7	NA
(Note 3)		gateway services and
		manufacturing and trading
		of products related to
		optimal optical fibers,
		telecommunications,
		electric power network
		systems and equipment.
Sing Lee Software (Group)	8076	Development and sale of	146.1	NA
Ltd. (Note 3)		information and network
		technologies and services
		to the financial industry.
ePRO Ltd.	8086	Provision of professional	4,357.2	35.3
		information technology
		contract services and
		maintenance services; and
		re-selling of hardware and
		software.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Jian ePayment Systems Ltd.	8165	Development and	193.6	NA
(Note 3)		operation of back end
		electronic receipt/payment
		and data recording and
		processing software
		system; and manufacturing
		and distribution of the
		associated commercial
		applications in PRC.
Oriental City Group Holdings	8325	Engaged in the cards and	360.0	NA
Ltd. (Note 3)		payment related businesses,
		namely the card acceptance
		business and the co-
		branded card partnership
		business in Thailand and
		the PRC respectively.

Sources: Bloomberg, ETnet and www.hkex.com.hk

Notes:

(1) The market capitalisation of the Comparable Epayment Companies is calculated based on the respective Comparable Epayment Companies’ closing price sourced from the Bloomberg and number of issued shares of the respective Comparable Epayment Companies available from the website of the Stock Exchange as at the Latest Practicable Date.
(2) P/E Ratio is based on the market capitalisation of the respective Comparable Epayment Companies as at the Latest Practicable Date divided by the net profit of the respective Comparable Epayment Companies in their respective latest annual reports.
(3) DIGITALHONGKONG.COM, Palmpay China (Holdings) Ltd., Sing Lee Software (Group) Ltd., Jian ePayment Systems Ltd. and Oriental City Group Holdings Ltd. have recorded net loss for the year ended 31 December 2011, and therefore their P/E Ratios are not applicable.

Based on the comparison table above, only the Company and ePRO Ltd. have meaningful P/E Ratios. In the absence of sufficient P/E Ratios, the common practice is to use price-to-book ratio (the ‘‘P/B Ratio’’) in determining the average of Comparable Epayment Companies. However, due to the nature of the software development industry, whereby assets requirements are light and limited to computers, the P/B Ratios are not meaningful and could be subjected to skewing particularly if these Comparable Epayment Companies decide to acquire fixed assets such as investment properties. While there are other valuation methods used in determining a company’s value, we have determined that P/E Ratio would be the most appropriate as it is not an asset-based valuation, which could be skewed as explained above, and does not involve projected incomes, which is based on a multitude of future assumptions.

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LETTER FROM TC CAPITAL

With such limited comparison size, we are of the opinion that the above comparison table is not statistically meaningful. As such, we have considered a wider scope of companies to include those companies listed on the Stock Exchange, whose principal activities are mainly engaged in all forms of software development instead of software development in relation to electronic payment systems only. The basis for such extension of scope is that all software development operations are almost similar in nature, and in the form of an office with employees and intellectual property as their key valued assets, while fixed assets are limited to a number of computers. Albeit their clients’ industries may be different, the software engineers’ duties and roles in these companies are similar.

Based on this widen scope of industry, we managed to shortlist a total of 83 companies of which only 39 companies are profitable and have meaningful P/E Ratios (the ‘‘Comparable Software Companies’’).The following table sets forth certain details of the Comparable Software Companies.

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Computer And Technologies	46	Provision of system and	418.3	8.1
Holdings Ltd.		network integration
		services, application
		development services, IT
		solutions implementation
		and outsourcing; enterprise
		software applications and
		outsourcing and e-business
		services; property and
		treasury investments.
Champion Technology	92	Sale of general system	600.3	8.5
Holdings Ltd.		product; provision of
		service; software licensing,
		lease of system product,
		investment in
		telecommunication
		network, e-commerce
		project; strategic
		investment in advanced
		technology product
		development companies.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Beijing Development (Hong	154	Provide IT related services	833.3	15.2
Kong) Ltd.		included system
		integration; construction of
		information networks and
		sale of related equipment;
		IT technical support and
		consultation services;
		develop and sale of
		software.
Kingdee International Software	268	Develop, manufacture and	3,120.2	17.7
Group Co. Ltd.		sell of software products
		and provision of software-
		related technical services.
SinoCom Software Group Ltd.	299	Provision of outsourcing	1,193.9	6.4
		software development
		services and technical
		support services.
PAX Global Technology Ltd.	327	Development and sales of	1,255.7	6.9
		electronic fund transfer
		point-of-sale (EFT-POS)
		products and provision of
		related services.
Chinasoft International Ltd.	354	Development and	2,968.0	18.1
		provision of information
		technology (IT) solutions
		services, IT outsourcing
		services, consulting
		services, mobile internet
		technology services and
		training services.
Founder Holdings Ltd.	418	Software development and	255.4	5.1
		systems integration.
HyComm Wireless Ltd.	499	Leasing of properties, car	758.9	25.7
		park management and loan
		financing.
Tradelink Electronic	536	Provision of front-end	853.2	11.9
Commerce Ltd.		Government Electronic
		Trading Services (GETS)
		for processing certain
		official trade-related
		documents.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Pacific Online Ltd.	543	Provision of internet	2,911.3	10.3
		advertising services for
		different commodities.
China Automation Group Ltd.	569	System design, integration	1,837.0	7.6
		and sale of safety and
		critical control systems for
		petrochemical, railway
		industries and others,
		provision of maintenance
		and engineering services,
		trading of equipment,
		software design and sales.
Inspur International Ltd.	596	IT components, software	938.3	17.0
		development and provision
		of outsourcing software
		services.
TravelSky Technology Ltd.	696	Provision of aviation	3,665.0	9.0
		information technology
		service, distribution of
		information technology
		service, as well as
		accounting, settlement and
		clearing services.
Tencent Holdings Ltd.	700	Provision of internet and	422,296.6	33.6
(Note 3)		mobile value-added
		services and online
		advertising services.
Automated Systems Holdings	771	IT Products and	327.0	7.3
Ltd.		Information Technology
		Services.
NetDragonWebsoft Inc.	777	Online game development,	3,198.0	20.1
		including game design,
		programming and graphics
		and online game operation
		as well as mobile Internet
		business.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Universal Technologies	1026	Provision of payment	622.2	10.2
Holdings Ltd.		solutions and related
		services, timber trading
		and furniture
		manufacturing, system
		integration and technical
		platform services, property
		investment and building
		management.
Kantone Holdings Ltd.	1059	Sale of general system	457.8	4.2
		product; provision of
		service, software licensing,
		lease of system product,
		development; IT solution
		for e-gaming, leisure and
		entertainment; strategic
		investment in advanced
		technology product
		development companies.
Capinfo Co. Ltd.	1075	Provision of information	216.9	8.6
		technologies and services
		supply including system
		integration, software
		development, IT planning
		and consultancy, IT
		operation and
		maintenance, etc.
Qianlong Technology	1236	Research, development and	156.6	6.1
International Holdings Ltd.		distribution of software,
		and the provision of
		related maintenance, usage
		and information services.
International Elite Ltd.	1328	Provision of customer	2,664.5	1.5
(Note 3)		hotline services and built-
		in secretarial services,
		telesales services and
		market research services,
		research and development,
		production and sales of
		RF-SIM products;
		licensing of the RF-SIM
		operation rights.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Nanjing Sample Technology	1708	Provision of visual	899.6	12.4
Co. Ltd.		identification and RFID
		technologies based full
		solutions to intelligent
		traffic, customs logistics
		and health care and other
		application areas.
Enterprise Development	1808	Providing integrated	410.9	23.0
Holdings Ltd.		business software
		solutions; and manufacture
		and sale of bare copper
		wires and magnet wires.
Kingsoft Corporation Ltd.	3888	Research, development,	3,960.5	9.6
		operation and distribution
		of online game, mobile
		game and casual game
		services, internet security
		software, dictionary
		software and office
		application software online
		and offline products.
China.com Inc.	8006	Operation of portal sites,	203.6	29.5
		the provision of content
		and internet services,
		advertising services
		through the internet and
		travel magazines, event
		organizing services and
		magazine publication.
Asian Capital Resources	8025	Provision of online content	541.3	625.0
(Holdings) Ltd. (Note 3)		information and related
		technical services, business
		consultation services and
		internet protocol television
		services.
Prosten Technology Holdings	8026	Provide wireless mobile	121.0	94.1
Ltd. (Note 3)		value-added services and
		related business.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Sun International Resources	8029	Provision of computer	593.7	8.8
Ltd.		hardware and software
		services, hotel operation
		and management services,
		mining iron ores and
		minerals, production and
		distribution of motion
		pictures and model agency
		services, and other film
		related services.
Vodatel Networks Holdings	8033	Provision of network and	147.3	5.5
Ltd.		systems infrastructure and
		applications, CNMS and
		customized software
		solutions.
Jiangsu Nandasoft Technology	8045	Develop, manufacture and	109.5	3.5
Co. Ltd.		marketing of network
		security software, internet
		application software,
		educational software,
		business application
		software and provides IT
		consulting services and
		sales of computer hardware
		products and equipment.
Heng Xin China Holdings Ltd.	8046	Wireless digital terrestrial	800.4	3.0
		TV network equipment,
		digital cable TV two-way
		conversion, research,
		design, develop and
		manufacture of electronic
		message security products,
		integrated circuits, related
		solutions and services.
Excel Technology International	8048	Sale of enterprise software	222.3	84.2
Holdings Ltd. (Note 3)		products and provision of
		maintenance services,
		systems integration services
		and resale of
		complementary hardware
		and software products,
		consultancy services, and
		services in respect of ASP
		business.

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LETTER FROM TC CAPITAL

			Current market
Company name	Stock code	Principal business	capitalization	P/E Ratio
			(Note 1)	(Note 2)
			(HK$ million)	(times)
Global Link Communications	8060	Supply, development and	95.1	3.0
Holdings Ltd.		integration of message
		communication systems
		and passenger information
		management system.
ePRO Ltd.	8086	Provision of professional	4,357.2	35.3
		information technology
		contract services and
		maintenance services; and
		re-selling of hardware and
		software.
Beijing Beida Jade Bird	8095	Marketing and sale of	162.4	9.2
Universal Sci-Tech Co. Ltd.		embedded system products
		and related products.
Creative Energy Solutions	8109	Provision of energy	508.0	4.9
Holdings Ltd.		efficiency solutions and
		engineering consulting
		services.
China LotSynergy Holdings	8161	Provision of lottery gaming	655.8	9.8
Ltd.		system, terminal equipment
		and relevant technologies
		and consultancy services
		for the public welfare
		lottery market in China.
Shanghai Jiaoda Withub	8205	Development and	24.3	56.0
Information Industrial Co		provision of business
Ltd (Note 3)		application solutions which
		include business solutions,
		application software,
		network and data security
		products, sales and
		distribution of computers
		and electrical products.

Sources: Bloomberg, ETnet and www.hkex.com.hk

Notes:

(1) The market capitalisation of the Comparable Software Companies is calculated based on the respective Comparable Software Companies’ closing price sourced from the Bloomberg and number of issued shares of the respective Comparable Software Companies available from the website of the Stock Exchange as at the Latest Practicable Date.

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LETTER FROM TC CAPITAL

(2) P/E Ratio is based on the market capitalisation of the respective Comparable Software Companies as at the Latest Practicable Date divided by the net profit of the respective Comparable Software Companies in their respective latest annual reports.
(3) The P/E Ratio of the Company has been excluded from the calculation of the average P/E Ratio of the Comparable Software Companies.

Based on the comparison table above, the P/E Ratios of the Comparable Software Companies range from 1.5 to 625. With such extreme values, we have applied statistical methodologies to identify outlying values under a normal distribution curve. As such, we have excluded the lowest value, being 1.5 times and the P/E Ratios in the high range, being 56.0 times or higher, as extreme outlying values outside of the normal distribution curve. We have also considered the extreme values of the market capitalization of the Comparable Software Companies in the same manner as aforesaid for exclusion, as their scale of operations exceeds that of ECPAY significantly. As a result, Tencent Holdings Limited which has a HK$422 billion market capitalization, was excluded from the calculation of the average P/E Ratio of the Comparable Software Companies.

Having made the aforesaid adjustments, the remaining 33 companies among the Comparable Software Companies have an average, median and range of the P/E Ratios as follows:

Average:	11.6
Median:	9.0
Maximum:	35.3
Minimum:	3.0

In comparison to the average P/E Ratio of the Comparable Software Companies of approximately 11.6 times, the implied P/E Ratio of the Chiyi Disposal of approximately 5.4 times, representing a discount of approximately 53%. The implied P/E Ratio of Chiyi Disposal is calculated based on the consideration of the Chiyi Disposal divided by the profit attributable to the owners of the ECPAY for the financial year ended 31 December 2011 sourced from the 2011 audited report of ECPAY multiply by a 9.99% interest in ECPAY. According to the Beihai Shiji agreement, the Shiji Disposal being conditional upon the Chiyi Disposal, which implies that Beihai Shiji is of the opinion that the Chiyi Disposal is of high importance in their assessment of the value and the future of ECPAY. Furthermore, based on our understanding from the Company, the another important purpose of the Chiyi Disposal is to provide an opportunity for the senior management of ECPAY to participate in the growth of ECPAY, and thereby providing the incentive to retain quality employees in ECPAY. Therefore, the amount of discount under the Chiyi Disposal should not be considered on its own, but should be considered as part of a remuneration package to incentivise the employees of ECPAY, and also as the conditional requirement for the completion of the Beihai Shiji agreement as aforesaid.

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LETTER FROM TC CAPITAL

We have discussed with the Company with regards to the 5 Comparable Companies referred to in their basis and determination of the consideration. Based on the Company’s knowledge and belief, the 5 Comparable Companies are the closest comparable in terms of their industry and size. While the 5 Comparable Companies are not within our list of Comparable Epayment Companies, all of them are within our Comparable Software Companies. As such, we are of the opinion that their sample size of the 5 Comparable Companies maybe insufficient and non-exhaustive. Although the sample size maybe insufficient, the use of prevailing P/E Ratios in determining the consideration is fair and reasonable as explained above, where other alternative valuation methods may not be as reliable as the P/E Ratio method.

We have noted that several companies, in particular those involved in software development in the PRC, have initiated similar remuneration plans whereby they have sold, allocated or funded the acquisition of a portion of their subsidiaries for their employees. In view of companies such as, Kingdee International Software Group Company Limited (0268), Pacific Online Limited (0543), Tencent Holdings Limited (0700), NetDragon Websoft Inc. (0777), Alibaba.com Limited (1688), and Kingsoft Corporation Limited (3888), have either a share award scheme, whereby shares of the respective companies were given free to their employees, or share purchase scheme, whereby shares of companies or subsidiaries where purchased with loans provided by the listed companies without definite repayment terms, the discount of approximately 53% from average P/E Ratio of the Chiyi Disposal compared to these reward schemes is fair and reasonable.

As such, we are of the view that consideration for the Chiyi Disposal is fair and reasonable so far as the Company and its Independent Shareholders are concerned, with the view that the purpose of the Chiyi Disposal is to incentivise employees for long-term future gains and profits of ECPAY instead of a short-term disposal gain.

With regards to the Shiji Disposal, the implied P/E Ratio of the Shiji Disposal is approximately 20.9 times, representing a significant premium of approximately 80% over the average of the Comparable Software Companies. The implied P/E Ratio of Shiji Disposal is calculated based on the consideration of the Beihai Disposal divided by the profit attributable to the owners of the ECPAY for the financial year ended 31 December 2011 sourced from the 2011 audited report of ECPAY multiply by a 7.5% interest in ECPAY. As such, we are of the view that the consideration for Shiji Disposal, is fair and reasonable so far as the Company and its Independent Shareholders are concerned.

V. Other Factors Considered for the Chiyi Disposal and Shiji Disposal

1. Rewarding contributions of the employees

The employees who own Chiyi have made significant contributions to ECPAY over the years. In order to reward and provide incentive to these valuable employees and set an example within the Company, whereby that employees’ contributions will be rewarded, it is pertinent that an equity-based employee

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LETTER FROM TC CAPITAL

incentive plan is implemented. The Company is also facing a highly competitive labour market in China, where talented software engineers are now demanding more rewards in light of a shortage of quality employees in the industry.

2. Reward accountability of the employees

While the Company has a share option scheme, this holding company level option scheme lacks the ability to reward employees based on their performance and profit contribution from each business segment. Hence, it does not provide a more direct incentive to employees, particularly when certain business segments outperform the other and yet every employee within the Group benefits equally. As such, distributing a small portion of the equity at the subsidiary level can provide a more direct reward scheme to those employees within each subsidiary, so that their efforts and rewarded in building the subsidiary is highly correlated.

3. Closer working relationship with Beihai Shiji and Shiji IT

Beihai Shiji is the wholly-owned subsidiary of Shiji IT, which is listed on the Shenzhen Stock Exchange. The core business of Shiji IT is the provision of a complete information technology and operation system to hotels in the PRC, particularly five stars and high-end international hotel chain groups. Shiji IT clientele number over 400 and among them are mostly four to five stars hotels, with many international hotel chains appointing them as a preferred vendor. Solutions provided by Shiji IT covers all aspect of a hotel operation, including but not limited to, front end reservation and room management system, hospitality system, and back end systems such as accounting, human resource management, purchasing and inventory control system. In 2003, Shiji IT was appointed as the exclusive agent in the PRC for Micros-Fidelio, a global leading provider for enterprise applications for the hospitality and retail industries worldwide.

While the Company currently does not have any business arrangement with Beihai Shiji or Shiji IT, the Company hopes that by offering a slightly larger share of ECPAY to Beihai Shiji, the Company would be able to tap into and establish a working relationship with Shiji IT. The partnership with Shiji IT is crucial in ensuring the future growth of ECPAY, particularly when Shiji IT has such established reputation in the market and a large network of high end hotel chain that ECPAY could easily benefit from by offering ECPAY’s services to the clients of Shiji IT. Closer working relationship with Shiji IT could also lead to ECPAY system working better with the products offered by Shiji IT, thereby enhancing the demand and value of ECPAY’s services.

Opportunity to venture into other industry requiring online payment

With Beihai Shiji having a bigger stake in ECPAY, it provides an opportunity for the Company to focus on other industries requiring online payment system and settlement services, and less in the hospitality industry as it would have established its reputation in that segment of the industry, from the partnership with Beihai Shiji.

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LETTER FROM TC CAPITAL

Furthermore, the increase in interest of ECPAY by Beihai Shiji provides a certain vote of confidence in ECPAY’s payment system, making ECPAY’s products more marketable to other industries requiring such services.

RECOMMENDATION

Having considered the principal factors and reasons as discussed above, we are of the view that the consideration of the Chiyi Agreement, while lower than the Comparable Software Companies, was done to incentivise employees for the long-term benefit of the Company. While, the consideration of Beihai Shiji Agreement reflects a true and fair price of ECPAY’s shares on an arm’s length negotiated basis.

Therefore, we are of the opinion that the Chiyi Agreement and the Beihai Shiji Agreement and are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend that the Independent Board Committee advise the Independent Shareholders to vote in favour of the resolution to approve the Chiyi Agreement and Beihai Shiji Agreement at the forthcoming SGM.

Yours faithfully, For and on behalf of TC Capital Asia Limited Edward Wu Managing Director

– 35 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interest in the Company

As at the Latest Practicable Date, the interests or short position of the Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any associated corporation (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 and Section 347 of the SFO (including interests or short positions which is taken or deemed to have taken under such provisions of the SFO); or are required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or as required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

					Total
					interests in		% of the
	Interests in Shares			Total	underlying		Company’s
	Personal	Family	Corporate	interests in	Shares	Aggregate	issued share
Name of Directors	interests	interests	interests	Shares	(Note 2)	interests	capital
Mr. Lau Yeung Sang
(Note 1)	1,500,000	—	269,320,000	270,820,000	—	270,820,000	15.89%
Mr. Chen Runqiang
(Note 2)	—	—	—	—	6,000,000	6,000,000	0.35%
Mr. Chang Hung Lun	5,000,000	—	—	5,000,000	—	5,000,000	0.29%
Mr. Chow Cheuk Lap
(Note 3)	67,540,000	—	—	67,540,000	—	67,540,000	3.96%

Notes:

The corporate interests of Mr. Lau Yeung Sang in the Shares are held by World One Investments Limited (‘‘World One’’). The entire issued share capital of World One is wholly and beneficially owned by Mr. Lau Yeung Sang. Mr. Lau Yeung Sang is therefore deemed to be interested in these ordinary shares.
The interests of Mr. Chen Runqiang in underlying shares of the Company represent the interests in share options granted to him under the share option schemes of the Company.

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APPENDIX

GENERAL INFORMATION

Total interests of Mr. Chow Cheuk Lap in issued ordinary shares of the Company include 67,540,000 shares held by Top Nation International Limited (‘‘Top Nation’’). Mr. Chow owns 50% beneficial interests in Top Nation and he is deemed to be interested in these ordinary shares held by Top Nation.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors as well as the chief executives of the Group had any interests or short positions in the Shares, underlying Shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept 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 of the Listing Rules.

As at the Latest Practicable Date, none of the Directors or proposed Directors had any direct or indirect interests in any assets which had since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group.

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

(b) Interest of substantial Shareholders and others

As at the Latest Practicable Date, so far as is known to the Directors, the following persons, not being Directors or chief executive of the Company had, or were deemed to have, interests or short position in the Shares or underlying Shares 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 is expected, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

(i) Interest in the Company:

				Percentage of the
			Number/	Company’s issued
			amount of	share capital as at
	Capacity and	Shares/equity	Shares/equity	the Latest
Name	nature of interest	derivatives	derivates held	Practicable Date
World One (Note 1)	Beneficial owner	Shares	269,320,000	15.80%
Mr. Lau Sik Suen (Note 2)	Beneficial Owner	Shares	231,900,000	13.60%
Ever City Industrial Limited (Note 3)	Beneficial owner	Shares	106,000,000	6.22%

– 37 –

APPENDIX

GENERAL INFORMATION

Notes:

The entire issued share capital of World One is beneficially owned by Mr. Lau Yeung Sang. Mr. Lau Yeung Sang is a director of World One.
Mr. Lau Sik Suen is the son of Mr. Lau Yeung Sang.
The entire issued share capital of Ever City Industrial Limited is beneficially held by Mr. Yang Zhimao and Mr. Zhu Fenglian in equal shares.
(ii) Interest in other members of the Group:

Percentage of the member’s issued share Name of capital as at the Latest Name of member of the Group shareholder Practicable Date ECPAY Beihai Shiji 15%

Save as disclosed above, as at the Latest Practicable Date, the Directors are not aware of any other person, other than the Directors and the chief executive of the Company who had, or was deemed to have, interest or short position in the Shares or underlying Shares 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 is expected, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

3. SERVICE CONTRACTS OF DIRECTORS

As at the Latest Practicable Date, none of the Directors had or proposed to enter any service contract with the Company or any other member of the Group which is not expiring or determinable by the Group within one year without payment of compensation, other than statutory compensation.

4. LITIGATION

As at the Latest Practicable Date, no member of the Group is engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

5. COMPETING INTEREST

As at the Latest Practicable Date, in so far as the Directors are aware, none of the Directors or their respective associates (as defined in the Listing Rules) had any interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

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APPENDIX

GENERAL INFORMATION

6. EXPERT

The following is the qualifications of the expert who has been named in this circular or has given opinion or advice contained in this circular:

Name Qualification TC Capital Asia a corporation licensed to carry on Type 1 (dealing in Limited securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

TC Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its opinion or letter and the reference to its name in the form and context in which it respectively appears. TC Capital has no shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group. TC Capital has no direct or indirect interest in any assets which have since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been 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.

7. MISCELLANEOUS

(a) The registered office of the Company is at Cricket Square, Hutchins Drive P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.
(b) The head office and principal place of business of the Company is at Units 601 to 608, 6/F, Harbour View Two, Phase Two, Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong.
(c) The company secretary of the Company is Mr. Tang Chi Wai who is the qualified accountant and one of the authorised representatives of the Company. Mr. Tang joined the Company as Financial Controller in June 2008. Mr. Tang is a fellow member of the Hong Kong Institute of Certificate Public Accountants, a fellow member of the Association of Chartered Certified Accountants and a member of the Chinese Institute of Certified Public Accountants.
(d) The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

8. MATERIAL ADVERSE CHANGE

Save as disclosed in this circular and in the Company’s profit warning announcement dated 24 May 2012, as at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, the date to which the latest published audited consolidated financial statements of the Company were made up.

– 39 –

APPENDIX

GENERAL INFORMATION

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Chiyi Agreement and Beihai Shiji Agreement are available for inspection during normal business hours at the Company’s principal place of business in Hong Kong at Units 601 to 608, 6/F, Harbour View Two, Phase Two, Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong on any weekday (except public holidays) for a period of 14 days from the date hereof.

– 40 –

NOTICE OF SGM

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1026)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the ‘‘SGM’’) of Universal Technologies Holdings Limited (the ‘‘Company’’) will be held at Units 601 to 608, 6/F, Harbour View Two, Phase Two, Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong on Friday, 27 July 2012 at 11: 00 a.m. for the following purpose:

To consider and, if thought fit, pass (with or without amendments) the following resolution as ordinary resolution:

ORDINARY RESOLUTION

‘‘THAT the Chiyi Agreement and Beihai Shiji Agreement both dated 8 June 2012 (the ‘‘Agreements’’, copies of which have been produced to the meeting marked ‘‘A’’ and signed by the chairman of the meeting for the purpose of identification) and all transactions contemplated thereunder be and are hereby approved, confirmed and ratified and any one director of the Company (save and except Madam Luan Yumin) be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments, agreements and deeds and do all such acts, matters and things as he/she may in his/her absolute discretion consider necessary, desirable or expedient for the purposes of or in connection with implementing, completing and giving effect to the Agreements and the transactions contemplated thereunder and to agree to such variations of the terms of the Agreements as he/she may in his/her absolute discretion consider necessary or desirable.’’

By Order of the Board Universal Technologies Holdings Limited Lau Yeung Sang Chairman

Hong Kong, 12 July 2012

– 41 –

NOTICE OF SGM

Notes:

(1) Any member entitled to attend and vote at the SGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A member who is the holder of two or more shares of the Company may appoint one or more proxies to attend and vote instead of him/her.
(2) A form of proxy for use at the SGM is enclosed in the circular of the Company of the same date of this notice. The form of proxy must be signed by you or your attorney duly authorised in writing or, in the case of a corporation, must be under its seal or the hand of an officer, attorney or the person duly authorised.
(3) The form of proxy and the power of attorney or other authority, if any, under which it is signed or a certified copy thereof must be lodged at the Company’s branch share register in Hong Kong, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than 48 hours before the time for holding of the SGM or any adjournment thereof (as the case may be) and in default the proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the meeting or at any adjournment thereof (as the case may be) should they so wish.
(4) Where there are joint registered holders of any share, any one of such persons may vote at the SGM, either in person or by proxy, in respect of such share as if he/she was solely entitled thereto; but if more than one of such joint holders be present at the SGM personally or by proxy, the vote of that one of the said persons so present whose name stands first on the register of members in respect of such share shall be accepted to the exclusion of the votes of the other joint holders.

– 42 –

AI assistant

Universal Technologies Holdings Limited — Proxy Solicitation & Information Statement 2012

49633_rns_2012-07-11_72890e83-01b5-4be9-a454-ec6336d564d5.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球 實 業 科 技 控 股 有 限 公 司

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

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

DEFINITIONS

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球 實 業 科 技 控 股 有 限 公 司

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

1. INTRODUCTION

LETTER FROM THE BOARD

2. CHIYI AGREEMENT

Date

Parties

Assets to be disposed

Consideration and payment

Completion

Other terms

3. UNDERTAKINGS OF ECPAY’S EMPLOYEES

LETTER FROM THE BOARD

4. BEIHAI SHIJI AGREEMENT

Date

Parties

Assets to be disposed

Consideration and payment

Completion

Other terms

5. DIFFERENCES BETWEEN CHIYI AGREEMENT AND BEIHAI SHIJI AGREEMENT

6. INFORMATION ON ECPAY

LETTER FROM THE BOARD

7. USE OF PROCEEDS

8. REASONS FOR THE DISPOSALS

LETTER FROM THE BOARD

9. EFFECTS OF THE DISPOSALS

10. INFORMATION ON CHIYI & BEIHAI SHIJI

11. LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

12. SGM

13. RECOMMENDATIONS

14. FURTHER INFORMATION

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球 實 業 科 技 控 股 有 限 公 司

DISCLOSEABLE & CONNECTED TRANSACTIONS Proposed disposal of 17.49% equity interests in ECPAY to two connected persons

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTIONS PROPOSED DISPOSAL OF 17.49% EQUITY INTERESTS IN ECPAY TO TWO CONNECTED PERSONS

INTRODUCTION

LETTER FROM TC CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED IN RELATION TO THE DISPOSALS

I. Background for the Chiyi Agreement and Beihai Shiji Agreement

II. Chiyi Disposal

Undertakings of ECPAY’s employees

Contribution by owners of Chiyi and employees of ECPAY

III. Shiji Disposal

Payment terms

IV. Consideration

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

LETTER FROM TC CAPITAL

V. Other Factors Considered for the Chiyi Disposal and Shiji Disposal

1. Rewarding contributions of the employees

2. Reward accountability of the employees

3. Closer working relationship with Beihai Shiji and Shiji IT

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interest in the Company

(b) Interest of substantial Shareholders and others

3. SERVICE CONTRACTS OF DIRECTORS

4. LITIGATION

5. COMPETING INTEREST

6. EXPERT

7. MISCELLANEOUS

8. MATERIAL ADVERSE CHANGE

9. DOCUMENTS AVAILABLE FOR INSPECTION

Universal Technologies Holdings Limited Proxy Solicitation & Information Statement 2012

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司

UNIVERSAL TECHNOLOGIES HOLDINGS LIMITED 環球實業科技控股有限公司