UNITED ENVIROTECH LTD AND UE NOVO (MALAYSIA) SDN. BHD. TO ACQUIRE DATARAN TENAGA (M) SDN. BHD.

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1 UNITED ENVIROTECH LTD AND UE NOVO (MALAYSIA) SDN. BHD. TO ACQUIRE DATARAN TENAGA (M) SDN. BHD. Establish strong presence in Malaysia Promote synergy and operation efficiency Increase source of recurring income 1. Introduction The Board of Directors of United Envirotech Ltd ( UEL" or the "Company, and together with its subsidiaries, the "Group") is pleased to announce that both the Company and UE Novo (Malaysia) Sdn. Bhd. ("UE Novo") have on 31 May 2006 entered into a conditional sale and purchase agreement (the "Sale and Purchase Agreement") for the acquisition by UE Novo of the entire issued and paid-up share capital (the "Sale Shares") of Dataran Tenaga (M) Sdn. Bhd. ( Dataran ) (the "Acquisition"). The Sale and Purchase Agreement was made between (i) Chua Kuang Chin, Law Chuan Faat, and Lim Puea Keng (collectively the "Vendors") as vendors, (ii) UE Novo as purchaser (the "Purchaser"), (iii) Dataran, and (iv) the Company. UE Novo is a wholly-owned subsidiary of the Company incorporated in Malaysia, which was a Ringgit Malaysia Two (RM2) shell company acquired by the Company for a consideration of Ringgit Malaysia Two (RM2), for the purposes of acquiring Dataran. Under the Sale and Purchase Agreement, the Vendors have agreed to sell to UE Novo the Sale Shares for a consideration of Ringgit Malaysia Five Million (RM5,000,000) (the "Purchase Consideration"), to be satisfied by the allotment and issue by the Company of 5,365,000 new ordinary shares in the capital of the Company (the "UEL Shares"). The UEL Shares, when issued as fully paid, will rank pari passu in all respects with the existing ordinary shares in the capital of the Company (the "Shares"). This announcement is made pursuant to Rule 1010 of the Listing Manual of the Singapore Exchange Securities Trading Limited (the "SGX-ST") (the "Listing Manual"). 2. Information on Dataran Dataran was established in Malaysia in Dataran is mainly involved in the business of providing, developing and selling water and sewage treatment products and services and sewage treatment system on a turnkey basis. Dataran s principal activities include the trading of pumps and rendering of engineering services for water or sewerage treatment. The current staff strength of Dataran, which consists mainly of engineers, is approximately 15. Dataran is the sole agent for Grundfos, a well-known European pumps manufacturer in Denmark, for Johor, Malaysia. Currently, in addition to the recurring income from the trading of pumps, Dataran has an order book of approximately RM10 million for its engineering projects. The information on Dataran herein is based on information made available to the Company by the Vendors.

2 3. The Purchase Consideration The Purchase Consideration is to be satisfied in full by the allotment and issue by the Company of 5,365,000 UEL Shares at an issue price of S$0.407 (the "Issue Price") for each of the UEL Shares. The Issue Price and the number of UEL Shares to be issued to the Vendors are based on the following: i. the exchange rate for the conversion of the Purchase Consideration in Ringgit Malaysia to Singapore Dollar ("SGD") being the average exchange rate as published at for a period of fourteen (14) days prior to the date of the Sale and Purchase Agreement (the Rate of Exchange"), which is SGD 1 to RM 2.29 (based on which the SGD value of the Purchase Consideration is S$2,183,406.11); and ii. the Issue Price is ascertained by determining the average SGD closing price of the Shares on the SGX-ST over the period of one (1) month prior to 23 May 2006, which is S$ The number of 5,365,000 UEL Shares is hence derived from dividing the SGD value of the Purchase Consideration by the Issue Price. The Purchase Consideration was agreed upon based on arms length negotiations between the parties to the Sale and Purchase Agreement on a willing buyer and willing seller basis, and after taking into consideration the unaudited net tangible asset value of Dataran as at 28 February 2006 and the provision by the Vendors of a guarantee and indemnity to the Purchaser in the Sale and Purchase Agreement that Dataran will post a profit after tax of Ringgit Malaysia two million (RM2,000,000) for the financial year of Dataran from 1 March 2006 to 28 Feb 2007, and collection of Dataran's debts as at the Completion Date (as defined in the Sale and Purchase Agreement). 4. Material Conditions The sale and purchase of the Sale Shares is conditional upon the following Conditions Precedent being obtained and complied with, within ninety (90) days from the date of the Sale and Purchase Agreement or such other period as the parties to the Sale and Purchase Agreement may mutually agree in writing:- (a) (b) (c) (d) (e) the receipt by the Purchaser of the approval of the Foreign Investment Committee in Malaysia for the acquisition of the Sale Shares by the Purchaser and/or Dataran's manufacturing licence to be issued by the relevant authorities; the receipt by the Company of the approval in principle of the SGX-ST for the listing and quotation of the UEL Shares; the financial due diligence of Dataran s accounts by an auditor approved by the Purchaser (the "Appointed Auditor ) which shall take into account that the 2 nd and 3 rd Properties (as defined in the Sale and Purchase Agreement) are to be divested by the Company, if they have so been effected; the receipt by the Purchaser of the approval of its shareholders in general meeting and the Directors of Dataran approving the transfer of the Sale Shares pursuant to the Sale and Purchase Agreement and authorising the registration of the transfer subject to the stamping thereof; and the receipt by the Purchasers of the approval of any other relevant Authority (as defined in the Sale and Purchase Agreement), if necessary. Other materials conditions in the Sale and Purchase Agreement are: (i) the Company shall pay the Vendors a deposit of Ringgit Malaysia Five Hundred Thousand (RM500,000) in the form of a bank guarantee in favour of the Vendors;

3 (ii) (iii) (iv) (v) (vi) (vii) the Vendors have provided a guarantee and indemnity to the Purchaser in the Sale and Purchase Agreement that Dataran will post a profit after tax of Ringgit Malaysia Two million (RM2,000,000) for the financial year of Dataran from 1 March 2006 to 28 Feb 2007, and collection of Dataran's debts as at the Completion Date (as defined in the Sale and Purchase Agreement); the UEL Shares shall be issued at the Issue Price and registered in the name of the Vendors within 30 days from the date the last of the abovementioned Conditions Precedent is fulfilled, to be deposited with the Vendors' solicitors as stakeholder and the Vendors'solicitors are authorised to release the UEL Shares to the Vendors in two tranches: (a) the first 50% of the total UEL Shares within six (6) months from the date of the Sale and Purchase Agreement or three (3) months from the Completion Date (as defined in the Sale and Purchase Agreement), whichever is later; and (b) the remaining 50% of the total UEL Shares upon confirmation in writing by the Purchaser that the Vendors have fully complied with the condition stated in (ii) directly above or twelve (12) months from the date of the Sale and Purchase Agreement, whichever is later; the Vendors shall not dispose of the UEL Shares within the first six (6) months of the registration of the same in their names, and thereafter may dispose of only 50% of their respective UEL Shares; and for the Vendors' balance 50% of the UEL Shares, only upon confirmation in writing by the Purchaser that the Vendors have fully complied with the condition stated in (ii) directly above or twelve (12) months from the date of the Sale and Purchase Agreement, whichever is later; the 2 nd and 3 rd Properties (as defined in the Sale and Purchase Agreement) of Dataran shall not form part of the assets of Dataran to be acquired, and Dataran shall transfer such properties to two of the Vendors Chua Kuang Chin (the 2 nd Property) and Law Chuan Faat (the 3 rd Property) and/or their nominees; two of the Vendors Chua Kuang Chin and Law Chuan Faat shall remain in the employ of Dataran, on the same terms of employment for a period of one year after the Completion Date (as defined in the Sale and Purchase Agreement); and the Vendors shall procure Dataran to repay the loan of Ringgit Malaysia Eight Hundred and Thirty Seven Thousand, Eight Hundred and Thirty Six (RM837,836-00) advanced by the Vendors to Dataran, by way of Twelve (12) monthly instalments of RM69, commencing from the Completion Date (as defined in the Sale and Purchase Agreement). In this respect the Company shall guarantee the due repayment of the said installments to the Vendors. 5. Value of Sale Shares to be acquired The unaudited net tangible asset value of Dataran for its financial year ended 28 February 2006 is RM2,374,871 or approximately S$1,037,062 (based on an exchange rate of S$1 to RM2.29). The unaudited net profits of Dataran for its financial year ended 28 February 2006 is RM1,027,770 or approximately S$448, Financial Effects The source of funds for the Acquisition is the UEL Shares, which will be issued pursuant to the General Mandate approved by the shareholders of the Company at the Company s Annual General Meeting held on 27 April Based on the Group s audited financials for FY2005 announced on 1 March 2006, and Dataran's unaudited financials for the financial year ended 28 February 2006, the transaction is expected to increase the net tangible asset per share of the Group by 0.6 %, and increase the earnings per share of the Group by 7.1 %. 7. Relative Figures computed on the bases set out in Rule 1006 of the Listing Manual Net Asset Value Test

4 This test is not applicable as this transaction is an acquisition and not a disposal of assets. Net Profits Test Adopting the basis set out in Rule 1006(b) of the Listing Manual, the net profit (unaudited) attributable to Dataran for its financial year ended 28 February 2006 is RM1,027,770 or approximately S$448,808. The Group made a net profit after tax of S$4,866,000 for the financial year ended 31 December Based on the above, the ratio is approximately 9.2%. Consideration Test Adopting the basis set out in Rule 1006(c) of the Listing Manual, the ratio of the Purchase Consideration for the Acquisition of RM5,000,000 as compared with the market capitalisation of the Company of approximately S$107 million as at 31 May 2006 is approximately 2.0%. Equity Securities Test Adopting the basis set out in Rule 1006(d) of the Listing Manual, the number of UEL Shares represent approximately 1.94% of the issued share capital of the Company (as at 31 May 2006) of 276,315,000 Shares. 8. Rationale The Group intends to use Dataran to penetrate the Malaysian market. Said Dr Lin Yucheng, Chairman and CEO of the Company, Our team has been working very hard to get a firm foothold into Malaysia, hence we are very excited about Dataran joining the UEL family. We believe that by incorporating Dataran s expertise and capitalizing on the market reach of Dataran, it will expedite the process of UEL becoming a prominent player in the Malaysia market. Added Dr Lin, We see a business synergy and increased operation efficiency following the acquisition. As Dataran already has several years of experience in water treatment, it will give us a good head start to the operations in Malaysia. UEL believes that the potential for the Malaysian water treatment market is huge and there are many sectors that would require advanced membrane technology. These sectors include palm oil refineries, petrochemical, textile and sewerage wastewater treatment. The membrane technology is still not widely applied in Malaysia as most of the water treatment companies are using traditional or basic water treatment processes. The Group hopes to seize the opportunity to penetrate the Malaysian market early and gain a first mover advantage. The strength of UEL is that we are able to provide our advanced membrane technology to our customers at a competitive price. The effectiveness of this process will in turn give the users cost savings that will enhance their profitability and operational efficiencies. Said Dr Lin. In considering the acquisition, UEL took into account Dataran s exclusive agency for a well-known European pump manufacturer, Grundfos of Denmark. This will bring with it a stream of recurring income from the sale and maintenance of water pump. Added Dr Lin, Pumps are a necessity in our trade. By purchasing the pumps within our group of companies, we are able to reduce our cost of materials and thus improve on our profit margins across the projects in PRC, Singapore and Malaysia. Grundfos of Denmark is internationally recognized as one of the most efficient water pumps in the industry. 9. Interests of Directors and Controlling Shareholders None of the Directors or controlling shareholders of the Company has any interests, direct or indirect, in the Acquisition.

5 10. Service Contracts of Directors There are no directors who are proposed to be appointed to the Company in connection with the Acquisition. 11. Inspection A copy of the Sale and Purchase Agreement is available for inspection during normal business hours at the Company s registered office at 8 Cross Street, #11-00 PWC Building, Singapore , for three months from the date of this announcement About United Envirotech Ltd Mainboard-listed United Envirotech Ltd., specializing in water treatment and reclamation using advanced membrane technology, provides environmental engineering solutions to a wide range of customers in the chemical, petrochemical, pharmaceutical, and wastewater treatment industries. The Group was founded by Dr Lin Yucheng, a China-born Singapore citizen, who has about 20 years experience in the environmental industry. The Group s track record includes building what it believes to be the largest Newater plant in the PRC that uses its Continuous Microfiltration ( CMF ) membrane and Reverse Osmosis ( RO ) technology, as well as what it believes to be one of the largest industrial wastewater treatment plant in Asia, in terms of treatment capacity, using its Membrane Bioreactor ( MBR ) technology. Through the years, United Envirotech has established strong working relations with their customers, which enables them to secure future contracts or referrals to new customers. Some of United Envirotech s major customers includes China Petrochemical Corporation ( Sinopec ), China National Petroleum Corporation ( CNPC ), China National Offshore Oil Corporation ( CNOOC ) and Sembcorp. About Our Technologies Membrane Bioreactor ( MBR ) is a wastewater treatment technology which combines membrane separation and biological wastewater treatment. MBR revolutionalised the traditional biological treatment process, drastically shortens the time and reduces the space for the treatment process. MBR is also more resilient to the sudden increase in contaminant concentration and variances in wastewater quality, hence delivering reliable and good treatment performance. Continuous Microfiltration ( CMF ), is a water treatment technology that utilises microfiltration process to achieve removal of submicron contaminants in water. Reverse Osmosis ( RO ) is a process that reverses (by application of pressure) the flow of water in the natural process of osmosis so that it passes from the more concentrated to the more diluted solution.