Glory Sun Land Group Limited — Proxy Solicitation & Information Statement 2006

Aug 21, 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in SinoCom Software Group Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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

SINOCOM SOFTWARE GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 299)

DISCLOSEABLE TRANSACTION

21 August 2006

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

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DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

• “associate(s)” has the meaning ascribed to it under the Listing Rules; “Board” the board of Directors;

“Company” SinoCom Software Group Limited, a company incorporated in the Cayman Islands, the issued shares of which are listed on the Stock Exchange;

• “connected person(s)” has the meaning ascribed to it under the Listing Rules;

• “Directors” the directors of the Company;

• “Group” the Company and its subsidiaries;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC;

• “IKEDA” IKEDA TERUO, a Japanese national, the holder of the MIS Shares before completion of the MIS Acquisition;

• “Independent Third Party(ies)”

to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, third party(ies) independent of the Company and its connected persons;

• “Latest Practicable Date” 17 August 2006, being the latest practicable date prior to the printing of this circular for ascertaining certain information referred to in this circular;

• “Listing Rules”

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited;

• “MIS”

• MIS Co., Ltd., a limited liability company incorporated in Japan;

• “MIS Acquisition”

the acquisition of the MIS Shares by SinoCom BVI from IKEDA pursuant to the MIS Agreement;

• “MIS Agreement”

the share transfer agreement dated 1 August 2006 entered into between SinoCom BVI and IKEDA in relation to the MIS Acquisition;

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DEFINITIONS

“MIS Shares”	750 ordinary shares of MIS, representing 75% of the
	issued share capital of MIS;
“PRC”	the People’s Republic of China (which for the purposes
	of this circular, shall not include Hong Kong, Macau
	and Taiwan);
“SFO”	the Securities and Futures Ordinance (Chapter 571 of
	the Laws of Hong Kong);
“Share(s)”	ordinary share(s) of HK$0.025 each in the capital of
	the Company;
“Shareholder(s)”	holder(s) of the Share(s);
“SinoCom BVI”	SinoCom Holdings (BVI) Limited, a company
	incorporated in the British Virgin Islands and a
	wholly-owned subsidiary of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“subsidiary”	has the meaning ascribed to it under the Listing Rules;
“substantial shareholder”	has the meaning ascribed to it under the Listing Rules;
	and
“Yen”	Japanese Yen, the lawful currency of Japan.

For the purposes of this circular, unless otherwise indicated, the exchange rate of HK$1.00 = Yen14.71 has been used for currency translation, where applicable. This is for illustration purpose only and does not constitute a representation that any amounts in HK$ or Yen have been, could have been, or may be converted, at these or such other rates.

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LETTER FROM THE BOARD

SINOCOM SOFTWARE GROUP LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 299)

Executive Directors: Mr. Wang Zhiqiang (Chairman) Mr. Wang Xubing Dr. Shi Chongming Mr. Siu Kwok Leung

Non-executive Director: Mr. Wang Nengguang

Registered Address: Century Yard Cricket Square Hutchins Drive P.O. Box 2681 GT George Town Grand Cayman British West Indies

Independent Non-executive Directors: Mr. Pang Chor Fu Professor Li Weian Mr. Lee Kit Wah

Principal place of business in Hong Kong: Units 1713-18 17/F Shui On Centre 6-8 Harbour Road Wanchai, Hong Kong

21 August 2006

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

INTRODUCTION

On 1 August 2006, the Board announced, among other things, that SinoCom BVI, a wholly-owned subsidiary of the Company, entered into the MIS Agreement with IKEDA on 1 August 2006, pursuant to which SinoCom BVI acquired from IKEDA 750 ordinary shares of MIS (representing 75% of the issued share capital of MIS) for a consideration of Yen120,000,000 (equivalent to approximately HK$8,157,716). The consideration for the MIS Acquisition had been satisfied in full by SinoCom BVI in cash.

Following completion of the MIS Acquisition, SinoCom BVI became a shareholder of MIS holding 75% of the issued share capital of MIS, and MIS became a non wholly-owned subsidiary of the Company. Based on the “five-tests” calculation set out in rule 14.07 of the Listing Rules, the applicable percentage ratios in respect of the MIS Acquisition exceed 5% but are less than 25%. The MIS Acquisition therefore constitutes a discloseable transaction of the Company under rule 14.06(2) of the Listing Rules. The purpose of this circular is to provide you with further information in relation to the MIS Acquisition.

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LETTER FROM THE BOARD

THE MIS AGREEMENT

Date of the agreement : 1 August 2006

Parties : (1) SinoCom BVI (as purchaser) (2) IKEDA (as vendor), an Independent Third Party Assets acquired : 750 ordinary shares of MIS, representing 75% of the issued share capital of MIS

• Completion of the MIS : SinoCom BVI became the holder of the MIS Shares Acquisition following the approval by the board of directors of MIS for registration of SinoCom BVI as the holder of the MIS Shares in the register of members of MIS on the same date as the date of the MIS Agreement

The MIS Agreement does not contain any provision which restrict SinoCom BVI from disposing of the MIS Shares acquired by it pursuant to the MIS Agreement.

Consideration

The consideration for the MIS Acquisition of Yen120,000,000 (equivalent to approximately HK$8,157,716) had been satisfied in full in cash by SinoCom BVI in accordance with the MIS Agreement.

The consideration for the MIS Acquisition was determined after arms’ length negotiations and on normal commercial terms with reference to (i) the size and scale of operation of MIS and (ii) the unaudited financial statements of MIS for the financial year ended 31 March 2006.

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LETTER FROM THE BOARD

INFORMATION ON IKEDA AND MIS

IKEDA is a Japanese national and is an Independent Third Party.

MIS is a limited liability company incorporated in Japan which is principally engaged in the provision of software integration, integrated solutions and the distribution of software products. Immediately before the completion of the MIS Acquisition, the issued share capital of MIS was owned as to 99.4% by IKEDA and as to 0.6% by two other Independent Third Parties. As at the Latest Practicable Date, MIS does not hold any shareholding interest in other companies.

Immediately before the completion of the MIS Acquisition, the shareholding structure of MIS was as follows:

==> picture [218 x 80] intentionally omitted <==

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

Two other
IKEDA
Independent Third Parties
0.6% 99.4%
MIS
----- End of picture text -----

Following completion of the MIS Acquisition and as at the date of this circular, the shareholding structure of MIS is as follows:

==> picture [241 x 118] intentionally omitted <==

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

The Company
100%
Two other SinoCom
IKEDA
Independent Third Parties BVI
0.6% 24.4% 75%
MIS
----- End of picture text -----

Based on the financial statements of MIS prepared in accordance with the corporate accounting principles prescribed under the relevant Japanese laws, as at 31 March 2006, the unaudited net asset value of MIS attributed to the MIS Shares was approximately Yen93,643,340 (equivalent to approximately HK$6,365,965). The unaudited net profits of MIS before and after taxation and extraordinary items attributed to the MIS Shares for the financial year ended 31 March 2006 amounted to Yen2,327,124 (equivalent to approximately HK$158,200) and Yen902,124 (equivalent to approximately HK$61,327) respectively. For the financial year ended 31 March 2005, the unaudited net profits of MIS before and after taxation and extraordinary items attributed to the MIS Shares amounted to Yen1,451,552 (equivalent to approximately HK$98,678) and Yen926,552 (equivalent to approximately HK$62,988) respectively.

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LETTER FROM THE BOARD

REASONS AND BENEFITS FOR THE MIS ACQUISITION

MIS is principally engaged in the provision of software integration, integrated solutions and the distribution of software products which is similar to the business carried on by the Group. MIS became a subsidiary of the Company and hence a member of the Group following the completion of the MIS Acquisition. The Directors consider that the Group will benefit from MIS’s software development outsourcing business operation in China and the additional software development staff from MIS for the further expansion of the Group’s business.

Following completion of the MIS Acquisition, MIS will be accounted for as a subsidiary of the Company in the financial statements of the Group and the financial results of MIS will be consolidated in the consolidated accounts of the Group. The MIS Acquisition is expected to enhance the earnings base of the Group and with reference to the unaudited net asset value of MIS attributed to the MIS Shares as at 31 March 2006, the MIS Acquisition had not resulted in any material financial effect on the assets and liabilities of the Group as a whole.

The Directors, including the independent non-executive Directors, consider that the MIS Agreement was on normal commercial terms which were fair and reasonable and in the best interests of the Group and the Shareholders as a whole.

GENERAL

SinoCom BVI is an investment holding company and a wholly-owned subsidiary of the Company.

The Company is an investment holding company and the Group is principally engaged in the provision of software development outsourcing services.

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

By order of the Board SinoCom Software Group Limited Wang Zhiqiang Chairman

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests or short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) 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 and short positions which they are taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (“Model Code”) were as follows:

(a) Interests in the Company

				Approx.
	Capacity/Nature	No. of shares of		percentage of
Name of Director	of Interest	the Company	Notes	shareholding
Mr. Wang Xubing	Interest of a controlled	563,000,000 (L)	1	51.38%
	corporation
Mr. Wang Zhiqiang	Interest of a controlled	563,000,000 (L)	2	51.38%
	corporation
Dr. Shi Chongming	Beneficial owner	4,043,200 (L)		0.37%
Mr. Siu Kwok Leung	Beneficial owner	4,280,000 (L)		0.39%

Notes:

• 1 These shares are beneficially owned by China Way International Limited (“China Way”). By virtue of his 51% shareholding interest in China Way, Mr. Wang Xubing is deemed or taken to be interested in the 563,000,000 shares of the Company owned by China Way for the purpose of the SFO.

• 2 These shares are beneficially owned by China Way. By virtue of his 49% shareholding interest in China Way, Mr. Wang Zhiqiang is deemed or taken to be interested in the 563,000,000 shares of the Company owned by China Way for the purpose of the SFO.

• 3 The letter “L” denotes a long position in shares.

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GENERAL INFORMATION

APPENDIX

(b) Interests in associated corporations of the Company

				No. of
**Name **	of			ordinary
associated		Name of director of	Capacity/Nature	shares of	Percentage of
corporation		the Company	of interest	US$1.00 each	shareholding
China	Way	Mr. Wang Xubing	Beneficial owner	51 (L)	51%
China	Way	Mr. Wang Zhiqiang	Beneficial owner	49 (L)	49%
Note:	The letter	“L” denotes a long position in shares.

Save as disclosed herein, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) 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 and short positions which they were taken or deemed to have under such provisions of SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

3. DISCLOSURE OF SUBSTANTIAL SHAREHOLDERS’ INTERESTS

(a) Interests in Company

				Approx.
Name of	Capacity/Nature	No. of shares of		percentage of
shareholder	of Interest	the Company	Notes	shareholding
China Way	Beneficial owner	563,000,000 (L)	1	51.38%
Madam Zhang Yue	Interest of spouse	563,000,000 (L)	2	51.38%
Madam Yuan Yue	Interest of spouse	563,000,000 (L)	3	51.38%
Ling

Notes:

• (1) Mr. Wang Xubing and Mr. Wang Zhiqiang, directors of the Company, are also the directors of China Way.

• (2) Madam Zhang Yue is the wife of Mr. Wang Xubing and is deemed to be interested in the 563,000,000 shares in which Mr. Wang Xubing is deemed or taken to be interested for the purposes of the SFO.

• (3) Madam Yuan Yue Ling is the wife of Mr. Wang Zhiqiang and is deemed to be interested in the 563,000,000 shares in which Mr. Wang Zhiqiang is deemed or taken to be interested for the purposes of the SFO.

• (4) The letter “L” denotes a long position in shares.

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GENERAL INFORMATION

APPENDIX

(b) Interests in other members of the Group

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following person (other than a Director or the chief executive of the Company) was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of other members of the Group:

		Approx.
		percentage of
		registered/issued
	Name of member of the	capital of the
Name of shareholder	Group	company
Beijing Asia Pacific	SinoCom-Art M	16% (Note 1)
Communications Technology	Technology Co., Ltd.
Development Co., Ltd.
Mr. Han Dong Hui	SinoCom-Art M	24% (Note 1)
	Technology Co., Ltd.
Shensoft	Sinocom Shensoft	45%
Pan Hong	Sinocom Shensoft	(Note 2)

Note:

1. As at the Latest Practicable Date and before completion of the acquisition of an aggregate 20% equity interest in SinoCom-Art M Technology Co., Ltd. by SinoCom BVI from Beijing Asia Pacific Communications Technology Development Co., Ltd. and Mr. Han Dong Hui as disclosed in the announcement of the Company dated 1 August 2006.

2. Pan Hong is interested in approximately 77% issued share capital of Shensoft Holdings (BVI) Ltd. (“Shensoft”). By virtue of his 77% interest in Shensoft, he is indirectly interested in 10% or more of the shares in Sinocom Shensoft Holdings (BVI) Ltd. (“Sinocom ShenSoft”).

Save as disclosed herein, as at the Latest Practicable Date, so far as is known to any Directors or chief executive of the Company, no other person (other than a Director or the chief executive of the Company) had an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract with the Company or any of its subsidiaries which was not determinable by the Group within one year without payment of compensation, other than statutory compensation.

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GENERAL INFORMATION

APPENDIX

5. MATERIAL LITIGATION

As at the Latest Practicable Date, no member of the Group was 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 any member of the Group.

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of Directors or their respective associates (as defined in the Listing Rules) had any interests in a business which competes or may compete with the business of the Group.

7. MISCELLANEOUS

• (a) The qualified accountant and secretary of the Company is Mr. Siu Kwok Leung, an associate member of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants.

• (b) The registered office of the Company is located at Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, British West Indies. The head office and principal place of business of the Company in Hong Kong is located at Units 1713-18, 17/F, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong.

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

• (d) The English text of this circular shall prevail over the Chinese text, in case of any inconsistency.

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