12 June, 2009

Dear Shareholder

Chief Executive’s Update 12 June 2009

The General Meeting held on 4th June was most successful. Prior to the business of the meeting your Chairman, Jack Wigglesworth, read the following statement:

“Since we wrote to shareholders convening this General Meeting and summarising the terms of the arrangements with China IPO and its directors, a number of discussions have taken place between the Company and certain of its larger shareholders regarding the structure of those arrangements and the requirements of those institutions which would need to be fulfilled in order for the proposals to be supported by them. The majority of the institutions that we have been in contact with have indicated that their preference would be to seek a return of cash to shareholders rather than seek a relisting for the Company and it has been agreed by way of the variation to the agreement to be made between the Company and China IPO that, China IPO will only be rewarded by payments of fees (as described in the summary sent under cover of your Chief Executive’s letter) on the return of cash (as dividends of profit on liquidation or sale of the Company) whether or not this is accompanied by or follows a relisting. There will also be no entitlement to fees on a distribution in specie. The entitlement to fees will therefore continue after any relisting but no fees will be payable as a result of a relisting being achieved and it is not anticipated that a relisting will in fact take place.

Furthermore, major institutional shareholders we have spoken to indicated their strong preference that China IPO should be rewarded with cash in satisfaction of their entitlement to fees rather than with an equity stake in the Company. Accordingly, it has therefore been agreed by way of a further variation to the Agreement that only in respect of the first £5 million in each returned to shareholders shall China IPO receive shares in satisfaction of its entitlement to fees and that fees due on returns of cash exceeding that amount will be paid in cash only. China IPO has therefore irrevocably undertaken that its discretion to accept shares in lieu of cash fees shall be removed in respect of the excess above £5 million of cash returned to shareholders. The basis of calculation for entitlements to fees otherwise remains as described in my letter to you.

The Board is grateful for the expressions of their views by the larger institutional shareholders and believes that these are generally reflective of the views of shareholders generally. Both the Company and China IPO are pleased to be able to accommodate those views by way of changes to the agreements between the Company and China IPO.

It has further been agreed with China IPO that, pending further discussions with shareholders, it is not necessary at present for them to be issued with their options to acquire shares as described in my letter to you nor for the Company to have the free allotment authorities contained in the special resolutions (Resolutions 9 and 10) of the notice convening this meeting, this pending further discussions with institutional shareholders. Accordingly, those two resolutions are being withdrawn notwithstanding that the Company has received sufficient support in terms of the proxy votes cast to ensure that they are adopted by the shareholders. Pending the outcome of further discussions with China IPO and larger shareholders the Company may return to shareholders to seek those authorities.

The formal part of the meeting will therefore consist only of the consideration and, if thought, fit the passing of resolutions 1 to 8 only.”

In the event, resolutions 1 to 8 were unanimously approved by the meeting, as a result of which the appointments to your Board of The Earl of Cromer, Professor Gardin, Mr Bailey, Mr Parker and I were confirmed. We would like to express our thanks to Shareholders for this overwhelming indication of your support.

There was ample opportunity for shareholders to question the Board and a useful and constructive discussion lasted for quite some time. One notable point which became clear from shareholder comments was that not all shareholders have the same aspirations with regard to their holding. While this should not be a surprise, it was helpful to hear that some private and institutional shareholders would sooner see the Company take advantage of post-recession opportunities in China than have cash returned to them. Bearing this in mind your Board is seeking mechanisms which may meet the requirements of both Shareholders of points of view.

Your Board’s primary objective remains to finalise and file the accounts. It is our aim that these should be circulated by the end of August with the AGM held in September.

Your sincerely

Keith Negal

Chief Executive