Weiye Holdings Limited — Proxy Solicitation & Information Statement 2010

Jul 26, 2010

IMPORTANT THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION

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 disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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

If you have sold all your shares in United Power Investment Limited you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

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UNITED POWER INVESTMENT LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 674)

MAJOR AND CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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A notice of a special general meeting to be held at 3:30 p.m. on 11th August, 2010 at Golden Island Bird’s Nest Chiu Chau Restaurant at 2nd Floor, East Wing, Star House, 3 Salisbury Road, Tsimshatsui, Kowloon, Hong Kong is set out on pages 33 and 34 of this circular. Whether or not you are able to attend the meeting, please complete and return the form of proxy to the principal office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting. Completion and return of the form of proxy will not prevent you from attending and voting in person should you so wish.

26th July, 2010

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from Ample. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix I — Financial information of the Group. . . . . . . . . . . . . . . . . . . . .	22
Appendix II — Valuation report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Appendix III — General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Notice of special general meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

— i —

DEFINITIONS

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

“Agreement” an agreement dated 15th October, 2007 between the Vendor and the Company relating to the sale and purchase of the Sale Shares and the Loan

“Ample” Ample Capital Limited, a licensed corporation to carry out types 4 (advising on securities), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Supplemental Agreement

“Associates” has the meaning ascribed to it in the Listing Rules “Board” board of Directors “Company” United Power Investment Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange “Completion Date” 28th November, 2007, being the date of completion of the Agreement “Directors” directors of the Company “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the PRC

“Independent Board an independent committee of the Board comprising Ms. Committee” Chan Lai Mei, Mr. Lee Yuk Sang, Angus and Mr. Tong Jingguo, formed for the purpose of advising the Independent Shareholders regarding the Supplemental Agreement “Independent Shareholders” shareholders of the Company other than Madam Ma and her associates “JV Company” 肇慶星湖俱樂部(Star-Lake Club Zhaoqing)

— ii —

DEFINITIONS

“Latest Practicable Date”	23rd July, 2010, being the practicable date prior to printing
	of this circular for ascertaining certain information for
	inclusion in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Loan”	all interest free unsecured loans advanced by the Vendor to
	Wellrich as at the Completion Date
“Madam Ma”	Madam Ma Shuk Kam, a former Director
“PRC”	People’s Republic of China
“Property”	No. 9 Duan Zhou Wu Road, Zhaoqing, Guangdong Province,
	the PRC
“Sale Shares”	the entire issued share capital of Wellrich acquired by the
	Company from the Vendor pursuant to the Agreement
“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)
“SGM”	the special general meeting of the Company to be held at
	3:30 p.m. on 11th August, 2010 at Golden Island Bird’s Nest
	Chiu Chau Restaurant at 2nd Floor, East Wing, Star House,
	3 Salisbury Road, Tsimshatsui, Kowloon, Hong Kong, notice
	of which is set out on pages 33 and 34 of this circular
“Share(s)”	ordinary share(s) of HK$0.05 each in the share capital of
	the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Supplemental Agreement”	a supplemental agreement dated 19th July, 2010 between the
	Vendor and the Company in respect of the Agreement
“Valuer”	Savills Valuation and Professional Services Limited

— iii —

DEFINITIONS

“Vendor”	Well Harvest Enterprises Limited, a company incorporated
	in British Virgin Islands with limited liability and wholly
	owned by Madam Ma
“Wellrich”	Wellrich Investments Limited, a company incorporated in
	British Virgin Islands with limited liability and a wholly
	owned subsidiary of the Company
“HK$”	Hong Kong dollar(s)
“RMB”	Renminbi, the lawful currency of the PRC
“US$”	United States dollar(s)
“sq.m.”	square meter(s)

— iv —

LETTER FROM THE BOARD

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UNITED POWER INVESTMENT LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 674)

Directors: Cheng Yang (Chairman) Liu Yu Mo Au Edmond Wah Chan Lai Mei Lee Yuk Sang, Angus Tong Jingguo *

Principal Office: 2810-11, 28th Floor Shun Tak Centre West Tower 200 Connaught Road Centre Hong Kong

* Independent non-executive Directors

26th July, 2010

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

INTRODUCTION

It was announced on 19th July, 2010 that the Company entered into the Supplemental Agreement. For the Company, the Supplemental Agreement is a major and connected transaction under the Listing Rules which requires the approval of shareholders of the Company in general meeting. An independent board committee comprising Ms. Chan Lai Mei, Mr. Lee Yuk Sang, Angus and Mr. Tong Jingguo (all being independent nonexecutive Directors), has been appointed to advise the Independent Shareholders in respect of the Supplemental Agreement. The Company has appointed Ample as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

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LETTER FROM THE BOARD

The purpose of this circular is to give you further details of the Supplemental Agreement and to convene a special general meeting to consider and, if thought fit, pass the necessary resolution to approve the Supplemental Agreement.

THE SUPPLEMENTAL AGREEMENT DATED 19TH JULY, 2010

Parties:

The Vendor, a company wholly owned by Madam Ma Shuk Kam, a former Director.

The Company

The Vendor is principally engaged in investment holding.

Terms of the Supplemental Agreement:

Pursuant to the Agreement, the Company acquired from the Vendor the Sale Shares and the benefits of the Loan for a total consideration of HK$355.6 million, HK$120 million of which was paid in cash and the balance was satisfied by the issue of 699,109,792 Shares. The Agreement was completed on 28th November, 2007.

Wellrich has 94% interest in the JV Company, which holds the land use right of the Property for a term of 70 years expiring on 14th September, 2064 for commercial and services uses. The Property has a total site area of approximately 26,198 sq.m. with various buildings completed in 1994 and 2001. It is currently occupied and operated as a hotel under the business name of Dynasty Hotel with a total gross floor area of approximately 53,844 sq.m.

Under the Supplemental Agreement, the parties have conditionally agreed to delete the provisions in the Agreement relating to the following arrangements (the “Arrangements”) and to release each other from all obligations and liabilities thereunder:

1. The Company shall procure the JV Company to proceed to apply to the relevant PRC authorities for approval for the redevelopment of the Property into a commercial/ residential complex (the “Redevelopment”).

2. If the relevant PRC authorities approve the Redevelopment and determine that a premium and/or other monies are payable by the JV Company to any PRC authorities therefor (the “Premium”), the parties shall jointly appoint an independent valuer to make a valuation of the market value of the Property on the basis of the Redevelopment subject to the terms of approval thereof by the relevant PRC authorities as at the date of such approval (the “Valuation”).

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LETTER FROM THE BOARD

1. If the Valuation is less than the aggregate of RMB360 million and the Premium, the Vendor shall:

2. (a) pay 94% of the shortfall in cash to the Company; or

3. (b) repurchase the Sale Shares and the Loan at the total cash consideration of HK$355.6 million plus a sum equal to the interest on HK$120 million at the rate of 4% per annum from the Completion Date to the date of completion of such repurchase (the “Interest”).

4. If (a) the application for the Redevelopment is rejected by the relevant PRC authorities; or (b) all necessary approvals for the Redevelopment are not granted by the relevant PRC authority within five years from the Completion Date, the Vendor shall repurchase from the Company the Sale Shares and the Loan free from all encumbrances at the total consideration of HK$355.6 million plus the Interest.

The terms of the Supplemental Agreement were arrived at after arm’s length negotiations between the Company and the Vendor.

The Company will not receive or pay any compensation under the Supplemental Agreement.

Condition of the Supplemental Agreement:

The Supplemental Agreement is conditional upon the approval of the independent shareholders at a special general meeting of the Company.

If the condition is not fulfilled on or before 30th September, 2010 (or such other date as the parties may mutually agree) the Supplemental Agreement will lapse.

REASONS FOR THE TRANSACTION

It was mentioned in the announcement and the circular of the Company dated 17th October, 2007 and 7th November, 2007 respectively that the Company intended to redevelop the Property for commercial and residential uses. However a recent reassessment indicates that the Redevelopment would incur loss and it could be very difficult to obtain approval of the PRC Government for the Redevelopment. Further the PRC Government has recently taken measures to cool down the property market.

In view of the above, the Company intends to continue the current use of the Property for hotel operations for the time being. The Company may also consider disposal of its interest in Wellrich if suitable opportunity should arise. Therefore the Company entered

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LETTER FROM THE BOARD

into the Supplemental Agreement to terminate the arrangements in the Agreement relating to the Redevelopment. An extract of the results of the hotel operations, after being acquired by the Group, for the two years ended 31st March, 2009 and the six months ended 30th September, 2009 is as follows:

			Six months
			ended 30th
	Year ended	31st March	September,
	2008	2009	2009
	HK$	HK$	HK$
Turnover	30,107,201	80,732,680	35,721,177
Loss after tax	(1,634,320)	(123,592,138)	(11,155,949)

The losses suffered by the hotel operations were mainly due to depreciation of assets, impairment and amortisation of payment for the Property held under operating leases. Savills Valuation and Professional Services Limited, an independent valuer, has valued the Property on the basis of an ongoing hotel operation at RMB220 million (about HK$251,680,000) as at 31st May, 2010. An impairment loss of about HK$86 million on the Property is expected to be incurred on the basis of its current hotel operations and with reference to the above valuation. The impairment will be reflected in the financial results of the Company for the year ended 31st March, 2010.

The executive Directors consider that the terms of the Supplemental Agreement are fair and reasonable and in the interests of the shareholders as a whole. No Director has any material interest in the Supplemental Agreement.

If the Supplemental Agreement is not approved by the Independent Shareholders, the Directors presently intend not to proceed with the Redevelopment as they consider that it is not in the interest of the Company and its shareholders to lock up the Company’s resources for the Redevelopment if the Redevelopment is likely to incur loss, but will reassess the situation as appropriate. The provisions in the Agreement relating to the Arrangements will lapse if the Company does not proceed with the Redevelopment by 27th November, 2012.

The Company is expected to benefit from entering into the Supplemental Agreement as it will be released from its obligations to procure the JV Company to proceed to apply to the relevant PRC authorities for approval for the Redevelopment and to use its resources for its existing operations. The executive Directors consider that there is no disadvantage to the Company for entering into the Supplemental Agreement.

The Company has not negotiated with the Vendor to repurchase the Sale Shares and the Loan from the Company. An independent third party has expressed interest to purchase Wellrich but no agreement has been reached.

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LETTER FROM THE BOARD

FINANCIAL EFFECT ON THE GROUP

It is expected that the Supplemental Agreement will have no material adverse financial effects on the earning, assets and liabilities of the Group.

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Currently the Group is principally engaged in hotel and restaurant operations, property investments, provision of wedding services, entertainment business and collection of copyright fees for both content distribution and infrastructure in respect of karaoke music products in the PRC.

Hotel operations

The business of Dynasty Hotel in Zhaoqing, the PRC has been affected by the economic downturn in the PRC. The income is expected to be stable for the current financial year.

Restaurant operations

The business of the Group’s Chiu Chau Restaurant in Star House, Tsimshatui is stable and profitable. The Directors consider that given its established reputation in Hong Kong, the restaurant will continue to contribute profit to the Group.

Investment properties

Income from the investment properties of the Group is expected to be stable for the current financial year and will continue to contribute profit to the Group.

Wedding services

The Group’s wedding services business is operated under the trade names of “Cite Du Louvre 羅浮宮婚紗影城” in Hong Kong. This operation has been adversely affected by keen competition from local and Taiwan wedding services companies and the economic downturn in Hong Kong and its performance is not expected to improve in the current financial year. The Group closed its “Wonderful Arts Wedding Services” shop during the year ended 31st March, 2010.

Entertainment operations

The Group’s entertainment operations include provision of services relating to production and artist management in the entertainment industry and other entertainment related business. The Group also owns intellectual property rights to lyrics of various songs. It is expected that these operations will not have significant contribution to the results of the Group in the current financial year.

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LETTER FROM THE BOARD

Collection of fees for licensing of karaoke music products

The business of collection of fees for licensing of karaoke music products in the PRC has suffered substantial loss mainly as a result of possible impairment loss in respect of goodwill arising from the acquisition of Hua Rong Sheng Shi Holding Limited (“Hua Rong”). Such impairment loss was mainly due to the increase in the market price of the consideration Shares issued for the acquisition on the date of completion over their issue price and delay in rollout of service.

The Directors are optimistic about the future prospects of the entertainment industry in the PRC. The Group’s business relating to collection of fees for licensing of copyright to karaoke music products to karaoke operators in the PRC is gradually yielding income to the Group.

Apart from the existing businesses, the Group will continue to seek suitable investment opportunities.

SPECIAL GENERAL MEETING

You will find on pages 33 and 34 of this circular a notice of the SGM to be held at 3:30 p.m. on 11th August, 2010 at Golden Island Bird’s Nest Chiu Chau Restaurant at 2nd Floor, East Wing, Star House, 3 Salisbury Road, Tsimshatsui, Kowloon, Hong Kong at which an ordinary resolution will be proposed to consider, and, if thought fit, to approve the Supplemental Agreement. Voting at the SGM will be taken by poll.

There is enclosed a form of proxy for use at the SGM. You are requested to complete the form of proxy and return it to the principal office of the Company in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding the meeting, whether or not you intend to be present at the meeting. The completion and return of the form of proxy will not prevent you from attending and voting in person should you so wish.

As at the Latest Practicable Date, to the extent that the Company is aware having made all reasonable enquiries:

• (a) Madam Ma and her associates had beneficial interests in a total of 243,306,686 Shares and they will be required to abstain from voting in respect of the resolution approving the Supplemental Agreement at the SGM under the Listing Rules, and

• (b) except Madam Ma and her associates, there is no other shareholder who is required to abstain from voting at the SGM.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the Supplemental Agreement is fair and reasonable and in the best interest of the shareholders of the Company as a whole. Accordingly the Board recommends you to vote in favour of the resolution to be proposed at the SGM.

You are advised to read carefully the letters from the Independent Board Committee and Ample respectively as contained in this circular before deciding whether or not to vote in favour of the resolution to be proposed at the SGM to approve the Supplemental Agreement.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully, Cheng Yang Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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UNITED POWER INVESTMENT LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 674)

26th July, 2010

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION

We refer to the documents dated 26th July, 2010 issued by the Company (the “Circular”), of which this letter forms part. Terms defined in the Circular shall bear the same meanings when used herein unless the context requires otherwise.

We have been appointed to constitute the Independent Board Committee to consider the Supplemental Agreement and Ample has been appointed as the financial adviser to advise us in this respect.

Your attention is drawn to the letter from the Board and the letter from Ample containing its advice to us as set out in the Circular respectively.

Taking into account the advice from Ample, we consider that the terms of the Supplemental Agreement are fair and reasonable so far as the Independent Shareholders are concerned and the Supplemental Agreement is in the interests of the Company and its shareholders as a whole, and so recommend the Independent Shareholders to vote for the resolution to be proposed at the SGM.

Yours faithfully,

Chan Lai Mei Lee Yuk Sang, Angus Tong Jingguo

Independent Board Committee

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LETTER FROM AMPLE

The following is the text of the letter of advice from Ample to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

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26th July, 2010

To the Independent Board Committee and the Independent Shareholders of United Power Investment Limited

Dear Sirs and Madams,

MAJOR AND CONNECTED TRANSACTION

INTRODUCTION

Ample Capital Limited has been appointed by the Company to act as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders, pursuant to the requirements of the Listing Rules, in respect of the terms of the Supplemental Agreement, details of which are set out in the circular issued by the Company (the “Circular”) to the shareholders of the Company dated 26th July, 2010.

This letter sets out our advice in respect of the terms of the Supplemental Agreement for inclusion in the Circular. Unless otherwise defined or the context otherwise requires, all terms defined in the Circular shall have the same meaning when used in this letter.

On 19th July, 2010, the Company entered into the Supplemental Agreement with the Vendor to amend the Agreement dated 15th October, 2007 for the sale and purchase of shares in, and the benefits of all shareholder’s loans to, Wellrich, by deleting the provisions on post-completion arrangements in respect of the Redevelopment and releasing each other from all obligations and liabilities thereunder (the “Variation”) upon the Supplemental Agreement becoming unconditional. The Supplemental Agreement is conditional upon the approval of the Independent Shareholders at the SGM. If the condition is not fulfilled on or before 30th September, 2010 (or such other date as the parties may mutually agree) the Supplemental Agreement will lapse.

The Vendor is wholly and beneficially owned by Madam Ma, a former Director within 12 months from the date of the Supplemental Agreement and hence, a connected person of the Company within the meaning of the Listing Rules. The Variation contemplated under the Supplemental Agreement is a connected transaction under the Listing Rules which requires the approval of the Independent Shareholders pursuant to Rule 14A.48 of the Listing Rules.

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LETTER FROM AMPLE

The Supplemental Agreement also constituted a major transaction under the Listing Rules.

The Independent Board Committee comprising three independent non-executive Directors, namely Madam Chan Lai Mei, Messrs. Lee Yuk Sang, Angus and Tong Jingguo has been established to advise the Independent Shareholders in respect of the Variation and to give recommendation on how to vote in respect of the resolution to approve the Supplemental Agreement.

BASIS OF ADVICE

In formulating our opinions and recommendations, we have relied on the information supplied to us by the Company and the opinions expressed by, and the representations of, the Directors and the management of the Company, including those set out in the Circular. We have assumed that all the information and representations so supplied by the Directors and/or the management of the Company and all information, opinions and representations referred to or contained in the Circular, for which the Directors and the Company are solely and wholly responsible, were true, accurate, complete and not misleading at the time they were supplied, expressed or made, and remained so up to the date of the Circular. No representation or warranty, expressed or implied, is made by us on the accuracy, truth or completeness of such information, opinions and/or representations. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors.

We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. The Directors, having made all reasonable inquiries, confirm that to the best of their knowledge and belief the information contained in the 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 in the Circular misleading.

While we have taken reasonable steps to satisfy the requirements under the Listing Rules, we have not carried out any independent verification of the information, opinions or representations given or made by or on behalf of the Company, nor have we conducted an independent investigation into the business affairs or assets and liabilities of the Group or any of the other parties involved in the Supplemental Agreement.

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LETTER FROM AMPLE

In the event of inconsistency, the English text of this letter shall prevail over the Chinese translation of this letter.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion regarding the terms of the Supplemental Agreement, we have taken into consideration the following principal factors and reasons:

A. Background Information

1. Business Information

The Group

According to the interim report 2009/10 of the Company, the Group is principally organized into six operating divisions namely, (i) restaurant operations; (ii) property investment; (iii) wedding services; (iv) entertainment business; (v) licence fee collection business; and (vi) hotel operations (the “Hotel Operations”).

Based on information available to us, we observe that the following relevant events have taken place since 1st April, 2010:

• (a) Mr. Cheng Yang (“Mr. Cheng”) was appointed as a Director on 30th April, 2010 and Mr. Cheng subsequently became a substantial shareholder of the Company upon the acquisition of 1,786 million Shares on 20th May, 2010.

• (b) On 18th June, 2010, Madam Ma, Mr. Yeung Chi Hang and Mr. Lee Wai Loun resigned as Directors whereas Mr. Cheng was appointed as the chairman and chief executive officer and Mr. Tong Jingguo was appointed as the independent non-executive Director.

Wellrich and JV Company （肇慶星湖俱樂部）

Wellrich is a company incorporated in the British Virgin Islands on 21st June, 1993 and the major asset of Wellrich is its 94% interest in the JV Company. The JV Company is a sino-foreign cooperative joint venture established in the PRC on 8th December, 1993 with an operation period up to 7th December, 2043. The major assets of the JV Company are the land use right of the Property at No.9 Duan Zhou Wu Road, Zhaoqing, Guangdong Province, the

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LETTER FROM AMPLE

PRC for a term of 70 years expiring on 14th September, 2064 for commercial services uses. It is currently occupied and operated as a hotel under the business name of Dynasty Hotel.

When the Group acquired Wellrich in 2007, the company planned to redevelop the Property into a commercial/residential complex. As such, the Property has been valued at RMB360 million (approximately HK$374.47 million) based on the assumptions that it had been granted with a term of 70 years for residential uses and 40 years for commercial uses from 31st August, 2007, being the date of valuation, with a total redevelopment plot ratio of 3 and that the land use rights premium and other relevant fees for that had been fully settled and the grantee had free and uninterrupted rights to use the property and was entitled to transfer the property interest with the residual terms without payment of any further premium or onerous fee to the government. Further details of the acquisition of Wellrich could be found in the circular of the Company dated 7th November, 2007.

2. Financial Information

Based on information provided by the Company, we have summarized below for ease of reference information on the financial results for the two financial years ended 31st March, 2009, six months ended 30th September, 2008 and six months ended 30th September, 2009 of the Hotel Operations:

Revenue Segment Results (Loss before tax) After charging: (i) Depreciation Charges (ii) Amortisation of /Impairment loss on payments for lease- hold land held for own use under operating leases Total of (i) and (ii)	Year Ended 31.03.2008 31.03 2009 HK$’000 HK$’000 30,107 80,733 (611) (123,592) (5,766) (20,368) (1,850) (116,761) (7,616) (137,129)	Six Months Ended 30.09.2008 30.09.2009 HK$’000 HK$’000 39,803 35,721 (7,245) (11,156) (8,608) (10,521) (2,296) (2,628) (10,904) (13,149)

Source: Annual Report 2009 and interim results announcement of the Company dated 11th December, 2009

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LETTER FROM AMPLE

From the above table, it could be seen that the revenue from the Hotel Operations increased by approximately 168% to approximately HK$80.7 million for the year ended 31st March, 2009 as compared with the previous year reflecting the full year results since the acquisition of Wellrich in November 2007. The economic turmoil triggered by the sub-prime mortgage crisis in the United States of America has affected the Hotel Operations causing a decrease of approximately 10.3% in the revenue for the six months ended 30th September, 2009 to approximately HK$35.7 million as compared with the same period for 2008. We further noted that although the Hotel Operations were not profitable over the years, the losses were mainly due to non-cash items such as depreciation charges and amortisation of/impairment loss on payments for lease-hold land held for own use under operating leases. Indeed, if excluding those non-cash charges, one would notice that the Hotel Operations have been making continual contribution to the Group’s cash flows from operating activities.

B. Reasons

With the recent appointment of Mr. Cheng as chairman and chief executive officer of the Company and the changes in the composition of the Board, details of which are set out in subsection A1 headed “Business Information” of this letter, we understand that new management has conducted a review of the business operations of the Group. In the letter from the Board contained in the Circular, it is stated that a recent reassessment indicates that the Redevelopment would incur a loss and it could be difficult to obtain approval of the PRC Government for the Redevelopment. Furthermore, the PRC Government has recently taken measures to cool down the property market. We note that the Company intends to continue the current use of the Property for Hotel Operations for the time being and may consider disposal of the interest in Wellrich if suitable opportunity should arise. An independent third party has expressed interest to purchase Wellrich but no agreement has been reached. Therefore the Company entered into the Supplemental Agreement to terminate the Arrangements.

We also notice that if the Supplemental Agreement is not approved by the Independent Shareholders, the Directors presently intend not to proceed with the Redevelopment, but will reassess the situation as appropriate. The provisions in the Agreement relating to the Arrangements will lapse if the Company does not proceed with the Redevelopment by 27th November, 2012.

In order to assess the reasonableness in terminating the Arrangements, we would look into the property market in Zhaoqing and the benefits in continuing the Hotel Operations.

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LETTER FROM AMPLE

1. Property market in Zhaoqing

Referring to the downturn in the market sentiment of the property market in Zhaoqing, we observed from a statistical analysis (統計分析) article released by the Zhaoqing Municipal Bureau of Statistics (肇慶市統計局) on 10th May, 2010 that both the floor space sold and sales volume of commercial buildings (商品房) which includes residential buildings (住宅), office buildings (辦公樓) and commercial business buildings (商業營業房), for the first quarter of 2010 for Zhaoqing have slowed down.

Based on data released by the Zhaoqing Municipal Bureau of Statistics, we have summarized below for ease of reference information on the commercial buildings (商品房) market of Zhaoqing for 2009 and first quarter of 2010:

2009 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Full Year 2010 1st Quarter	Floor Space Sold sq.m. 305,300 550,600 754,700 1,142,500 2,753,100 450,600	Sales Volume RMB in million 1,124.00 1,560.69 2,565.60 4,099.05
		9,349.34
		1,809.00

Notwithstanding that the floor space sold of approximately 450,600 sq.m. for the first quarter of 2010 representing an increase of approximately 47.6% as compared with the figure for the same period in 2009 whereas the sales volume of approximately RMB1,809 million representing an increase of approximately 61.0% as compared with the figure for the same period in 2009, we have to take into account that the figures for the first quarter of 2009 were recorded in the aftermath of the global recession commenced in the fourth quarter of 2008. On the other hand, if we compare the floor area sold and

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LETTER FROM AMPLE

the sales volume for the first quarter of 2010 with the relevant figures for the fourth quarter of 2009, we immediately observe a decrease of approximately 60.6% and 55.9% respectively. While there may be seasonal factors affecting the pattern of property transactions such as the Chinese New Year holidays usually fall in January or February of each year, we actually note from an article released by the Zhaoqing Municipal Bureau of Statistics on 29th April, 2010 that the year-on-year growth rate for the month of March 2010 for the floor space sold and sales volume have dropped drastically by 158.9 percentage points and 214.1 percentage points respectively as compared with the year-on-year growth rate for the two months of January-February 2010. As such, it is doubtful if the increasing trend in 2009 is sustainable.

In the course of our analysis, we note from an article released by the Zhaoqing Municipal Bureau of Statistics on 28th January, 2010 in relation to the supply and demand of property in Zhaoqing that the PRC authority would be highly concerned whether the progressive abolition of exemption of various property related tax charges in 2010 would lead to a drastic decrease in property transactions. We further notice from an article released by the Zhaoqing Municipal Bureau of Statistics on 3rd March, 2010 that the exponential growth in 2009 was mainly due to the implementation of a series of preferential policies such as the lowering of property assignment deed tax, the exemption of payment of business tax on transfer of residential property held for more than two years, the exemption of property tax（房產稅）and the credit support for in-progress construction projects by the Zhaoqing Government.

In general, we understand that in order to dampen the effect of the economic tsunami originated from the United States of America in the fourth quarter of 2008, the PRC Government implemented various programme under the RMB4 trillion rescue package to reactivate the economy and to maintain a GDP growth rate of 8% per annum. With the availability of funding in the financial market, we note from data released by the National Bureau of Statistics of China (中華人民共和國國家統計局) that the property market in the PRC turned around in June 2009 and prices picked up rapidly, achieving double digit year-on-year growth rate in early 2010. To check the property boom and to prevent the burst of the property bubble, the PRC Government promulgated a series of regulations to cool down the overheated property market such as the tightening of funds available for lending by banks, the confiscation of land without development within the time limit set by the relevant authority and the raising of the initial deposit payment for the second or other residential buildings of a buyer. On 17th April, 2010, the State Council (國務院) of the

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LETTER FROM AMPLE

PRC released the Notice of Curbing Excessive Growth of House Prices in Some Cities (Guo Fa (2010) No.10) (國務院關於堅決遏制部分城市房價過快上漲 的通知) (國發(2010)10號) to reinstate its determination to curb the increasing property prices. The effect of the above measures was reflected in the slow down in growth rate in the property prices being recorded for both May and June 2010.

Besides, the market is expecting that other stringent measures such as the tightened enforcement of property tax (房產稅) and land appreciation tax (土地 增值稅) and the acceleration of construction of affordable housing (經濟適用 房) and other types of social security housing (保障性住房) are in the pipeline. In fact, quite a number of analysts including those from Barclays Capital Asia Ltd, Nomura International (Hong Kong) Ltd, Morgan Stanley Asia Ltd, The Royal Bank of Scotland and Standard Chartered have already projected a further decrease ranging from 5% to 30% in property price in the PRC in the coming 12 months.

In light of the above analysis, we do not envisage that the prospect of the property market in Zhaoqing will be promising.

As compared with the Hotel Operations, the property development sector is a very capital intensive industry. During the development stage, we understand that a substantial amount of capital would be locked-up for a relatively long period which may take years to complete. It is a unique feature that a majority of the funds invested in the project would only be returned to the developer upon the sales of the completed apartments, shops or offices. Therefore, the developer is exposed to various risks such as market risks, price risks, cash flow risks and interest rate risks (if partly financed by borrowings) during the development stage. We have discussions with management of the Company and are advised that various plans and feasibility studies have to be prepared by professionals for submission to the relevant authorities of the PRC and it is uncertain when the application would be approved or if approved at all. To enable the management to reassess the Redevelopment, the JV Company has prepared an in-house preliminary feasibility studies report (“FS Report”) on the Redevelopment. We have reviewed the FS Report including the assumptions made therein. Although the FS Report is not prepared

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LETTER FROM AMPLE

by independent professionals and the computed figures may not be good enough for any particular reference, it is worthy to note the following major indications:

• (a) The Redevelopment project is located at the old city region of Zhaoqing. As the detailed plan for the control of the old city region has not yet been finalized by the Bureau of Planning of Zhaoqing (肇慶規劃局), it is uncertain if the application for a change in usage of the land under the Redevelopment would be easily approved. The detailed plan is expected to be confirmed by end of 2010.

• (b) By the same token, it is uncertain if the total redevelopment plot ratio could easily be relaxed from 2 to 3.

• (c) If based on a plot ratio of 3 and referring to the statistical figures published by the Zhaoqing Government and/or latest available market information on various types of construction costs, sales price of residential buildings etc., it is broadly concluded that the Redevelopment project will not be profitable.

As the detailed plan for the control of the old city region is only expected to be confirmed by end of 2010 there is no guarantee that it will be ready by that time and it is uncertain what the outcome will be. We are advised that since the new management has decided not to proceed with the Redevelopment, they have not considered any postponement until the detailed plan is confirmed. Any postponement may affect other commercial decisions such as the renewal of some tenancies of the commercial section of the Property that will gradually expire in the coming months. Terms of the new tenancies would affect the amount of compensation payable for early termination if the Property has to be demolished for the Redevelopment. We concur with management of the Company that any postponement would subject the Group to the abovementioned uncertainties.

To proceed with the Redevelopment under the current market conditions would expose the Group to risks that are not in the interests of the Company and the shareholders of the Company as a whole.

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LETTER FROM AMPLE

2. Continuing the Hotel Operations for the time being

Based on our analysis as set our in subsection A2 headed “Financial Information” of this letter, we notice that the Hotel Operations were running smoothly in the past couple of years. It was also expected to generate stable income for the current financial year as set out in the letter from the Board contained in the Circular. Although the Hotel Operations have not been profitable after acquisition, we notice that the losses were mainly due to the non cash items such as depreciation charges, amortisation of and impairment loss on the payments for the Property held under operating leases which were not uncommon for the hotel industry. The Hotel Operations have actually been generating cash inflow for the Group over the past years. The Group would no longer benefit from such cash inflow especially during the development stage if the Redevelopment is to proceed.

In view of the above, we are of the opinion that the continuation of the current use of the Property for Hotel Operations for the time being and the consideration of disposal of the interest in Wellrich if suitable opportunity should arise are fair and reasonable and in the interest of the Company and the shareholders of the Company as a whole.

It is also stated in the letter from the Board contained in the Circular that apart from the existing businesses, the Group would continue to look for suitable investment opportunities.

C. Payment of shortfall/Repurchase under the Agreement

Having reviewed the reasons for the termination of the Arrangements, we now turn to the possible payment of shortfall/repurchase of Sale Shares and Loan plus the payment of the Interest by the Vendor under the Agreement details of which were set out in the letter from the Board contained in the Circular.

Purely for illustrative purposes, we assume that the Group proceeds to make an application for the Redevelopment and the Valuation turned out to be less than the aggregate of RMB360 million and the Premium. We are given to understand that, under such circumstances, the Vendor has the right to elect either to pay the shortfall or to repurchase the Sale Shares and the Loan plus the payment of the Interest. If based solely on the amount of fund to be involved under each of the aforesaid two modes of compensation, we believe there is great tendency that the Vendor would elect to pay the shortfall instead of repurchasing the Sale Shares and

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LETTER FROM AMPLE

the Loan plus the payment of the Interest. After receipt of the shortfall, the Group has to proceed with the Redevelopment and it would be exposed to the risks as mentioned in section B headed “Reasons” of this letter.

It is uncertain at this stage the amount of the shortfall, if any, to be received by the Group if the Redevelopment is to proceed as both the Premium and the Valuation are unknown. We note that the Premium could only be ascertained after the application for Redevelopment is lodged with the relevant authority. Hence, there is no guarantee that the amount of the shortfall receivable by the Group would be sufficient for the funding of the Redevelopment and the Group’s resources would be locked up during the development stage. As such, we consider that the termination of the Arrangements and to release all parties from all obligations and the liabilities thereunder would reduce the Group’s exposure to such uncertainties. We note that in the absence of the Supplemental Agreement, the Group is under the obligation to make an application for the Redevelopment before 27th November, 2012. The provisions relating to the Arrangements will only lapse by 27th November, 2012 if the Company does not proceed with the Redevelopment and the obligations of the Company under the Agreement in respect of the Arrangements would remain till 27th November, 2012. As long as the Company is under such obligations, the Company will be exposed to the abovementioned uncertainties.

In addition, management of the Company has confirmed to us that if no application for the Redevelopment is made by the Group there would be no question of whether the Redevelopment is rejected or approvals not being granted and thus, the subsequent repurchase by the Vendor pursuant to the Agreement would not be triggered. We do not consider that it is in the interests of the Company and its shareholders as a whole if the Group proceeds with the Redevelopment with a view that if the application is eventually rejected or not all approvals are being granted within five years from 28th November, 2007 (being the date of completion of the Agreement), the Vendor would have to repurchase the Sale Shares and Loan plus the payment of the Interest pursuant to the Agreement. By that time, the Group would have utilised its valuable resources whether in terms of manpower, time or capital (approximately RMB3 million equivalent to approximately HK$3.43 million) for the application of the Redevelopment which may have been spent for other alternatives that are free from the risks and uncertainties associated with the Redevelopment. If the Redevelopment is approved, the Group is obliged to proceed and would then be placed in the predicament as set out in the second paragraph of this section. We are also given to understand that if the application is approved by the relevant authorities, the JV Company has to pay the premium and complete a series of documents. If it fails to comply with the conditions to develop, the relevant authorities can give warnings, impose a fine or confiscate the land.

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LETTER FROM AMPLE

It should be noted that even if the Supplemental Agreement does not become unconditional, the provisions in the Agreement relating to the Arrangements will lapse if the Company does not proceed with the Redevelopment by 27th November, 2012.

D. Consideration

It is stated in the letter from the Board contained in the Circular that the terms of the Supplemental Agreement were arrived at after arm’s length negotiations between the Company and the Vendor. We note that no compensation is payable or receivable by the Group under the Supplemental Agreement even though it is a change in intention by the Company not to proceed with the application for approval for the Redevelopment. In view of the above, we consider that the terms of the Supplemental Agreement are fair and reasonable and in the interest of the Company and the shareholders of the Company as a whole.

E. Financial Effects

According to the letter from the Board contained in the Circular, it is expected that the Supplemental Agreement would have no material adverse financial effects on the earnings, assets and liabilities of the Group.

Given the independent valuation of the Property by the Valuer on the basis of an ongoing hotel operation at RMB220 million (about HK$251.7 million) as at 31st May, 2010 details of which are set out in the valuation report in Appendix II of the Circular, an impairment loss of about HK$86 million is expected to be incurred on the basis of the current hotel operations and with reference to such professional valuation. The impairment loss will be reflected in the financial results of the Group for the year ended 31st March, 2010.

We are given to understand that the impairment loss of about HK$86 million would be made irrespective of the Supplemental Agreement, as it was a result of the review of the current Hotel Operations and with reference to the valuation by the Valuer.

For the above reason and taking into account that no compensation is payable or receivable by the Group pursuant to the Supplemental Agreement, we concur with the Directors that the Supplemental Agreement would not have any material adverse effect on the earnings, assets and liabilities of the Group.

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LETTER FROM AMPLE

ADVICE

To summarise, in arriving at our advice, we have taken into consideration all the reasons and factors discussed above, in particular the following:

• the prospect of the property market in Zhaoqing is not promising as discussed under subsection B1 headed “Property market in Zhaoqing” of this letter;

• the exposure of the Group to risks and uncertainties under current market sentiments in the PRC if the Redevelopment is to proceed;

• the provisions in the Agreement relating to the Arrangements will lapse if the Company does not proceed with the Redevelopment by 27th November, 2012; and

• no compensation is payable or receivable by the Group under the Supplemental Agreement.

As the termination of the Arrangements is a variation to the Agreement, we are of the opinion that the Variation is conducted in the ordinary and usual course of business of the Company.

Having considered the above principal factors and reasons, we consider that the terms of the Supplemental Agreement are on normal commercial terms and fair and reasonable so far as the shareholders of the Company are concerned and in the interests of the Company and its shareholders as a whole. Accordingly, we would advise the Independent Shareholders, and also the Independent Board Committee to recommend to the Independent Shareholders, to vote in favour of the ordinary resolution to approve the Supplemental Agreement at the SGM to be held for the purpose of considering and, if thought fit, approving the Supplemental Agreement.

Yours faithfully, For and on behalf of

Ample Capital Limited

Fiona M.Y. Lau

Senior Vice President

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(A) INDEBTEDNESS

As at the close of business on 31st May, 2010, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had HK$100,176,150 due to minority shareholders (which were contributed as shareholders’ loans to the relevant subsidiaries of the Company).

Save as aforesaid and apart from intra-group liabilities, none of the companies in the Group had outstanding at the close of business on 31st May, 2010 any mortgages, charges or debentures, loan capital, bank overdrafts, loans debt securities or other similar indebtedness or any finance lease commitments, liabilities under acceptances or acceptances credits or any guarantees or other material contingent liabilities.

(B) WORKING CAPITAL

The Directors are of the opinion that after taking into account the financial effect of the Supplemental Agreement, the Group has sufficient working capital for its present requirements for at least 12 months from the date of this circular after taking into account its internal resources, available banking facilities and loans from minority shareholders to the relevant subsidiaries of the Company.

(C) MATERIAL CHANGE

Save as disclosed in the interim report of the Company for the six month ended 30th September, 2009 and the announcement of the Company dated 20th July, 2010 in respect of the substantial impairment loss on goodwill arising from the acquisition of Hua Rong, and in the section headed “Financial and trading prospects of the Group” in the letter from the Board contained in this circular, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31st March, 2009, being the date to which its latest published audited financial statements were made up.

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VALUATION REPORT

APPENDIX II

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited, an independent valuer, in connection with their valuation as of 31st May, 2010 of the Property.

==> picture [78 x 78] intentionally omitted <==

The Directors United Power Investment Limited Units 2810-11, 28th Floor Shun Tak Centre West Tower Nos. 168-200 Connaught Road Central Sheung Wan Hong Kong

==> picture [101 x 90] intentionally omitted <==

19th July, 2010

Dear Sirs,

In accordance with the instructions from United Power Investment Limited (the “Company”) for us to value the property at Dynasty Hotel, No. 9 Duan Zhou Wu Road, Zhaoqing, Guangdong Province (the “Property”) held by a joint venture of a subsidiary of United Power Investment Limited in the People’s Republic of China (the “PRC”), we confirm that we have carried out an inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of value of the Property as at 31st May, 2010 for inclusion in a circular issued by the Company.

Our valuation of the Property is our opinion of its market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures,

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VALUATION REPORT

APPENDIX II

management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

In valuing the Property, we have assumed that transferable land use rights in respect of the Property for its specific terms at nominal land use fee have been granted and that all requisite land premium payable has been fully settled. We have also assumed that the owner of the Property has enforceable title to the Property and has free and uninterrupted rights to use, occupy or assign the Property for the whole of the unexpired term as granted.

We have valued the Property, which is held for owner occupation, by direct comparison method with reference to sales evidence as available on the market.

We have been provided with copies of extracts of title documents relating to the Property. However, we have not searched the original documents to ascertain the existence of any amendments which may not appear on the copies handed to us. We have relied to a very considerable extent on information given by the Company’s PRC legal adviser regarding the title to the Property. We have also accepted advice given to us on such matters as planning approvals, statutory notices, easements, tenure, particulars of occupancy, identification of the Property, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been made. We have had no reason to doubt the truth and accuracy of the information provided to us by the Company which is material to our valuation. We have also advised by the Company that no material facts have been omitted from the information provided.

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

No allowance has been made in our valuation for any charges, mortgages or amounts owing on the Property nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

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VALUATION REPORT

APPENDIX II

In valuing the Property, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited and the Valuation Standards on Properties published by the Hong Kong Institute of Surveyors.

Unless otherwise stated, all money amounts stated in this report are in Renminbi.

We enclosed herewith our valuation certificate.

Yours faithfully,

For and on behalf of Savills Valuation and Professional Services Limited Charles C K Chan MSc FRICS FHKIS MCIArb RPS(GP) Managing Director

Note: Mr. Charles C K Chan is a qualified surveyor and has about 25 years’ experience in the valuation of properties in Hong Kong and has about 20 years’ experience in the valuation of properties in the PRC.

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VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Property

Dynasty Hotel, No. 9 Duan Zhou Wu Road, Zhaoqing, Guangdong Province, PRC

Description and tenure

The Property comprises a site with an area of approximately 26,197.50 sq.m, (281,990 sq.ft.) on which various buildings completed in 1994 and 2001 are erected.

The Property comprises a hotel with 312 guest rooms, retail shops, restaurants, banquet room, health club, staff quarters, facilities houses, together with amenities including tennis court and swimming pool.

The total gross floor area of the property is approximately 53,843.59 sq.m. (579,572 sq. ft.).

Particulars of occupancy

The Property is occupied and operated as a hotel under the business name of Dynasty Hotel.

A portion of the Property with a total gross floor area of approximately 8,101.03 sq.m. and exterior advertising panels are subject to various tenancies with most of them for terms of 2 years and the latest one expiring in March 2020 at a total monthly rent of approximately RMB584,000.

Market value in existing state as at 31st May, 2010

RMB220,000,000

The land use rights of the Property have been granted for a term expiring on 14th September, 2064 for commercial services uses.

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VALUATION REPORT

APPENDIX II

Notes:

• (1) Pursuant to a State-owned Land Use Rights Certificate No. Zhao Fu Guo Yong (1996) Zi Di 00231 issued by the People’s Government of Zhaoqing on 1st July, 1996, the land use rights of the Property with a site area of approximately 26,197.50 sq.m. have been granted to Star-Lake Club Zhaoqing（肇慶 星湖俱樂部）for a term of 70 years expiring on 14th September, 2064 for commercial services uses.

• (2) Pursuant to the 8 Real Estate Title Certificates issued by the People’s Government of Zhaoqing, the building ownership of the Property is vested in Star-Lake Club Zhaoqing for a term expiring on 14th September, 2064. Details of the certificates are as follows:

Building Certificate No. Facility House Yue Fang Di Zheng Zi Di 0151665 Staff Quarters Yue Fang Di Zheng Zi Di 0151666 Boiler House Yue Fang Di Zheng Zi Di 0151667 Comprehensive Building Yue Fang Di Zheng Zi Di 0151668 Comprehensive Building Yue Fang Di Zheng Zi Di 0151669 Comprehensive Building Yue Fang Di Zheng Zi Di 0151670 Comprehensive Building Yue Fang Di Zheng Zi Di 0151672 Meeting Center Yue Fang Di Zheng Zi Di C1099705 Total

Gross floor area (sq.m.) Usage 980.14 Commercial services 3,965.88 Commercial services 148.15 Commercial services 11,808.97 Commercial services 16,390.31 Commercial services 7,438.47 Commercial services 9,899.28 Commercial services 3,212.39 Commercial services 53,843.59

• (3) We have been provided with a legal opinion on the title to the Property issued by the Company’s PRC legal adviser, Hills & Co.（君道律師事務所）, which contains, inter alia, the following information:

• (i) 香港偉富投資有限公司 (Weifu Investment Co., Ltd.) (Party A) and 肇慶市粵西園林建築工程公 司 (Zhaoqing Shi Yuexi Yuanlin Construction Works Company) (Party B) established a joint venture (the “JV”), Star-Lake Club Zhaoqing on 8th December, 1993 for an operating period up to 7th December, 2043. Zhaoqing City Foreign Economy and Trading Committee has approved the change of investor from Party A to Wellrich Investments Limited (Party C) on 6th October, 1994. Party B and Party C have interests in 6% and 94% of the registered capital of the JV respectively;

• (ii) the JV has obtained the land use rights certificate of the Property and has the rights to occupy the piece of land and is entitled to transfer, lease and mortgage the land use rights in accordance with the relevant regulations;

• (iii) the JV has obtained the building ownership certificates for the buildings erected on the Property and has the rights to occupy the buildings and is entitled to transfer, lease and mortgage the buildings in accordance with the relevant regulations;

• (iv) the tenancy agreements that the JV entered into are binding, valid and enforceable. The effectiveness of the agreements is not affected by their non-registration with the relevant government authorities; and

• (v) the Property is free from any encumbrances.

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GENERAL INFORMATION

APPENDIX III

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 Group. The Directors, having made all reasonable inquiries, 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.

DISCLOSURE OF INTERESTS

Interests of Directors

As at the Latest Practicable Date, the interests of the Directors in the share capital of the Company which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests which they were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

			Percentage of
Name	Number of Shares	Nature of interest	shareholding
Cheng Yang	1,786,980,000	Personal and family_(Note 1)_	18.01
Liu Yu Mo	1,048,000	Personal	0.01
Au Edmond Wah	1,000,000	Personal	0.01
	(Note 2)

Notes:

1. 1,786,000,000 Shares are beneficially owned by Mr. Cheng Yang personally and 980,000 Shares are beneficially owned by his wife.

2. This relates to the options granted to Mr. Au Edmond Wah to subscribe for 1,000,000 Shares at the exercise price of HK$0.2254 per Share from 13th December, 2005 to 30th August, 2012.

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GENERAL INFORMATION

APPENDIX III

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or any chief executive of the Company had an interest or short position in any shares, underlying shares or debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO) or which was required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules to be notified to the Company and the Stock Exchange.

Interests of experts in the Group

None of the experts named in the paragraph headed “Qualifications of experts” in this appendix has any shareholding in any company in the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any company in the Group.

Interests in contract or arrangement

None of the Directors has any material interests in contract or arrangement subsisting at the date of this circular which is significant in relation to the business of the Group taken as a whole.

Interests in assets

None of the Directors or experts named in the paragraph headed “Qualifications of experts” in this appendix has any direct or indirect interest in any assets acquired or disposed of by or leased to any member of the Group or is proposed to be acquired or disposed of by or leased to any member of the Group since 31st March, 2009, being the date to which the latest published audited accounts of the Company were made up.

Service contracts

There is no existing or proposed service contract between any member of the Group and any Director or proposed Director (excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensations)).

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GENERAL INFORMATION

APPENDIX III

Competing business

None of the Directors has any interest in any business which competes or is likely to complete, either directly or indirectly, with the Group’s business.

LITIGATION

Neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

QUALIFICATION OF EXPERTS

The qualifications of the experts who have given opinions in this circular are as follows:

Name Qualification Savills Valuation and Property Valuer Professional Services Limited

Ample Capital Limited a licensed corporation to carry out types 4 (advising on securities), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO

CONSENTS

The experts named in the paragraph headed “Qualifications of experts” in this appendix have given and have not withdrawn their respective written consents to the issue of this circular with copies of their reports, valuation or letters (as the case may be) and the references to their names included herein in the form and context in which they are respectively included.

MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group within the two years preceding the date of this circular and are or may be material:

• (a) an agreement dated 30th September, 2008 between (i) Winkler Profits Limited, a wholly owned subsidiary of the Company, (as vendor); and (ii) Mr. Yuen Tak Yau, Daniel (as purchaser) relating to the sale and purchase of 51% of the issued share

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GENERAL INFORMATION

APPENDIX III

capital of, and the benefit of loans of HK$5,941,241.10 advanced to, Witty Ventures Limited, and 51% of the registered capital of HMS Watches Company Limited, for an aggregate cash consideration of HK$9,870,982.14;

• (b) an agreement made on 21st November, 2008 between (i) Welly Champ International Limited (“Welly Champ”) (a subsidiary of the Company); and (ii) the Company relating to the subscription of 42.88 shares of US$1 each of Welly Champ by the Company at HK$25.4 million as evidenced by an application for shares dated 21st November, 2008;

• (c) an agreement made on 21st November, 2008 between (i) Well Allied Investments Limited (“Well Allied”); and (ii) Welly Champ relating to the subscription of 21.873 shares of US$1 each of Well Allied by Welly Champ at HK$25.4 million as evidenced by an application for shares dated 21st November, 2008;

• (d) an agreement made on 21st November, 2008 between (i) Well Allied; and (ii) Tak Full Group Limited relating to the subscription of 3.96 shares of US$1 each of Well Allied by Tak Full Group Limited at HK$4.6 million as evidenced by an application for shares dated 21st November, 2008;

• (e) an agreement made on 23rd December, 2008 between (i) Welly Champ; and (ii) the Company relating to the subscription of 13.47 shares of US$1 each of Welly Champ by the Company at HK$8 million as evidenced by an application for shares dated 23rd December, 2008;

• (f) an agreement dated 13th February, 2009 between (i) Mr. Yeung Chi Hang (“Mr. Yeung”), a former director of the Company, and Mr. Chu Ying Man (as vendors); and (ii) the Company (as purchaser) relating to the sale and purchase of the entire issued share capital of, and the benefits of loans to, Hua Rong Sheng Shi Holding Limited for a total consideration of HK$750,000,000, which was satisfied by the issue of 1,431,818,182 convertible preference shares and 4,568,181,818 Shares and cash of HK$90,000,000;

• (g) an agreement dated 6th August, 2009 between (i) Mr. Yeung; and (ii) the Company relating to the subscription of up to 679,644,000 Shares at HK$0.36 per Share;

• (h) an agreement dated 12th September, 2009 between (i) Win Sea Group Limited (a wholly owned subsidiary of the Company), (as vendor); and (ii) 北京金英馬影視 文化有限責任公司 (as purchaser) relating to the sale and purchase of 60% of the equity capital in 北京金英馬國際文化交流有限公司 for a total cash consideration of RMB25,982,472;

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GENERAL INFORMATION

APPENDIX III

• (i) an agreement made on 12th January, 2010 between (i) Welly Champ; and (ii) the Company relating to the subscription of 13.66 shares of US$1 each of Welly Champ at HK$8 million as evidenced by an application for shares dated 12th January, 2010;

• (j) an agreement dated 18th May, 2010 between (i) the JV Company (as vendor); and (ii) 梁珍 (as purchaser) relating to the sale and purchase of the land portion of a car parking workshop located to the north of Yingbin Dadao, Zhaoqing, Guangdong Province, the PRC at RMB3,300,000; and

• (k) the Supplemental Agreement.

GENERAL

• (a) The secretary of the Company is Ms. Cheung Mei Ha, Jennifer. She is a solicitor practising in Hong Kong.

• (b) The registered office of the Company is at Clarendon House, Church Street, Hamilton HM11, Bermuda.

• (c) The Hong Kong share registrar of the Company is Tricor Secretaries Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of Jennifer Cheung & Co. at Unit A, 19th Floor, Two Chinachem Plaza, 68 Connaught Road Central, Hong Kong during normal business hours up to and including 9th August, 2010:

• (a) the Memorandum of Association and the Bye-laws of the Company;

• (b) the annual reports of the Company for the two years ended 31st March, 2009 and the interim report of the Company for the six months ended 30th September, 2009;

• (c) the letter and valuation certificate relating to the Property prepared by the Valuer, the texts of which are set out in appendix II;

• (d) the Agreement;

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

• (f) the written consents referred to in the paragraph headed “Consents” in this appendix.

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NOTICE OF SPECIAL GENERAL MEETING

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UNITED POWER INVESTMENT LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 674)

NOTICE IS HEREBY GIVEN that a special general meeting of the above mentioned company (the “Company”) will be held at Golden Island Bird’s Nest Chiu Chau Restaurant at 2nd Floor, East Wing, Star House, 3 Salisbury Road, Tsimshatsui, Kowloon, Hong Kong on 11th August, 2010 at 3:30 p.m. for the purpose of considering and, if thought fit, passing the following resolution as an ordinary resolution:

ORDINARY RESOLUTION

“ THAT the supplemental agreement dated 19th July, 2010 between (i) Well Harvest Enterprises Limited (the “Vendor”) and (ii) the Company relating to amendment of an agreement dated 15th October, 2007 between the Vendor and the Company in respect of the Company’s acquisition of the entire issued share capital of, and the benefits of all shareholder’s loans to, Wellrich Investments Limited (a copy of which is tabled at the meeting and signed by the Chairman for the purpose of identification) be and is hereby approved and that the directors of the Company be and are hereby authorised to implement the same (with any amendments to the terms of such supplemental agreement as may be approved by the directors of the Company).”

By Order of the Board Jennifer Cheung Mei Ha

Company Secretary

Hong Kong, 26th July, 2010

Principal Office:

2810-11, 28th Floor Shun Tak Centre West Tower 200 Connaught Road Centre

Hong Kong

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NOTICE OF SPECIAL GENERAL MEETING

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint a proxy (or proxies if the member holds more than two shares) to attend and vote in his stead. A proxy need not be a member of the Company.

2. A form of proxy for the meeting is enclosed. In order to be valid the form of proxy must be deposited at the Company’s principal office together with a power of attorney or other attorney, if any, under which it is signed or a certified copy of that power of attorney, not less than 48 hours before the time for holding the meeting or adjourned meeting.

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