Dear Shareholder,

We have been requested by a number of shareholders to set out our view as to the Net Asset Value (NAV) attributable per share today.

NAV represents the net assets of the company divided by the 229,508,590 shares in issue.

It is not a simple task, and in view of the various imponderables, we can only indicate a range, as set out in the four scenarios below.

A. Net asset value today, with no further obligation to subscribe RMB 30m for shares in Zhongying (ZY).

Cash	£4.5m
Quoted	£5.5m
Cash or cash equivalent	£10.0m
ZY Cost	£12.5m
Total Net Assets	£22.5m
NAV per share	£0.10p

B. Net asset value today, with no further obligation to subscribe RMB 30m for shares in Zhongying (ZY) and uplift in ZY value to initial investment of RMB 170m.

Cash	£4.5m
Quoted	£5.5m
Cash or cash equivalent	£10.0m
ZY Cost	£12.5m
ZY revaluation to RMB 170m	£4.5m
Total Net Assets	£27.0m
NAV per share	£0.12p

C. Net asset value today, with no further obligation to subscribe RMB 30m for shares in Zhongying (ZY) and uplift in ZY value to initial investment of RMB 170m together with uplift in value of 17% shareholding in ZY net assets of RMB 1.6billion.

Cash	£4.5m
Quoted	£5.5m
Cash or cash equivalent	£10.0m
ZY Cost	£12.5m
ZY revaluation to RMB 170m	£4.5m
ZY revaluation to 17% of RMB1.6b	£10.2m
Total Net Assets	£37.2m
NAV per share	£0.16p

D. Net asset value today, with no further obligation to subscribe RMB 30m for shares in Zhongying (ZY) and uplift in ZY value to initial investment of RMB 170m together with uplift in value of 17% shareholding in ZY net assets of RMB 1.6billion, together with litigation recoveries of £10.0m.

Cash	£4.5m
Quoted	£5.5m
Cash or cash equivalent	£10.0m
ZY Cost	£12.5m
ZY revaluation to RMB 170m	£4.5m
ZY revaluation to 17% of RMB1.6b	£10.2m
Litigation assets	£10.0m
Total Net Assets	£47.2m
NAV per share	£0.21p

We have today been informed of the following:

“In the public announcement released by Kaidi Electric on July 19th 2010, Kaidi Electric plans to transfer its 25% of ZY’s shareholding to Wuhan Kaidi Holding at a price of RMB 400 m, payable by the end of December 2010. The preceding share transfer agreement has yet to be signed and executed, and the shareholders of Kaidi Electric are expected to vote on this matter shortly.

To conclude, after this connected transaction, Wuhan Kaidi Holding will become ZY’s 60% controlling shareholder.”

We have also received information from China that suggests that “the LAC investment in ZY may be nullified under China Ruling”. However, the latest legal opinion that we have received strongly suggests that there are no grounds to nullify our investment.

You will note the significant difference between scenario A and scenario D makes it extremely difficult for your board to advise on what each share is worth today or could be worth tomorrow. In addition, there are further possible uplifts in value to be realised from investments and loans made by the company, and fully written off, as detailed in the 2009 Accounts.

We continue in our endeavours to both secure and return value to our shareholders.

Your sincerely

Toby J C Parker
Finance Director
London Asia Capital plc