Glory Sun Land Group Limited — Proxy Solicitation & Information Statement 2007

Aug 2, 2007

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 AND CONNECTED TRANSACTION

3 August 2007

CONTENTS

	Page
DEFINITIONS..............................................................................................................................	1
LETTER FROM THE BOARD..................................................................................................	3
APPENDIX GENERAL INFORMATION.............................................................................	8

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DEFINITIONS

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

“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;
“Directors”	the directors of the Company;
“Disposals”	the MIS IKEDA Disposal and the MIS GRS Disposal;
“Global Risk Systems”	Global Risk Systems Japan Limited, a limited liability company
	incorporated in Japan;
“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 and the holder of 244 MIS
	Shares before the completion of the MIS IKEDA Disposal;
“Independent Third Parties”	to the best of the Directors’ knowledge, information and belief,
	having made all reasonable enquiries, third parties (or in the
	case of “Independent Third Party”, a third party) independent
	of the Company and its connected persons (as defined in the
	Listing Rules);
“Latest Practicable Date”	30 July 2007, 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;
“MIS”	MIS Co., Ltd., a limited liability company incorporated in Japan;
“MIS GRS Disposal”	the disposal of the MIS GRS Disposal Shares by SinoCom BVI
	to Global Risk Systems pursuant to the MIS GRS Disposal
	Agreement;

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DEFINITIONS

“MIS GRS Disposal Agreement”	the share transfer agreement dated 13 July 2007 entered into
	between SinoCom BVI and Global Risk Systems in relation to
	the MIS GRS Disposal;
“MIS GRS Disposal Shares”	450 ordinary shares of MIS, representing 45% of the issued
	share capital of MIS;
“MIS IKEDA Disposal”	the disposal of the MIS IKEDA Disposal Shares by SinoCom
	BVI to IKEDA pursuant to the MIS IKEDA Disposal
	Agreement;
“MIS IKEDA Disposal Agreement”	the share transfer agreement dated 13 July 2007 entered into
	between SinoCom BVI and IKEDA in relation to the MIS
	IKEDA Disposal;
“MIS IKEDA Disposal Shares”	300 ordinary shares of MIS, representing 30% of the issued
	share capital of MIS;
“MIS Shares”	the ordinary share(s) of ¥50,000 each in the issued share capital
	of MIS;
“PRC”	the People’s Republic of China (which for the purposes of this
	announcement, shall not include Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan);
“RMB”	Renminbi yuan, the lawful currency of the PRC;
“Shareholder(s)”	holder(s) of the share(s) of HK$0.025 each in the issued share
	capital of the Company;
“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; and
“¥”	Japanese Yen, the lawful currency of Japan.

For the purposes of this circular, unless otherwise indicated, the exchange rate of HK$1.00 = ¥15.80 has been used for currency translation, where applicable. This is for illustration purposes only and does not constitute a representation that any amounts in HK$ or ¥ 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

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

Registered Address: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Units 1713-18 7/F Shui On Centre 6-8 Harbour Road Wanchai, Hong Kong

3 August 2007

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION AND CONNECTED TRANSACTION

INTRODUCTION

On 13 July 2007, the Board announced that SinoCom BVI, a wholly-owned subsidiary of the Company, entered into the MIS IKEDA Disposal Agreement with IKEDA, pursuant to which SinoCom BVI disposed of the MIS IKEDA Disposal Shares to IKEDA for a consideration of ¥48,000,000 (equivalent to approximately HK$3,037,975), the full amount of which has been paid in cash.

On 13 July 2007, the Board also announced that SinoCom BVI entered into the MIS GRS Disposal Agreement with Global Risk Systems, pursuant to which SinoCom BVI disposed of the MIS GRS Disposal Shares to Global Risk Systems for a consideration of ¥72,000,000 (equivalent to approximately HK$4,556,962), the full amount of which has been paid in cash.

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LETTER FROM THE BOARD

Following completion of the MIS GRS Disposal, MIS ceased to be a subsidiary of the Company, and upon completion of the MIS IKEDA Disposal, SinoCom BVI ceased to be interested in any MIS Shares.

Based on the “five-tests” calculation set out in rule 14.07 of the Listing Rules, the applicable percentage ratios in respect of each of the Disposals individually and both of the Disposals in aggregate exceeded 5% but were less than 25%. The Disposals, therefore, constituted a discloseable transaction of the Company under rule 14.06(2) of the Listing Rules.

Immediately before completion of the Disposals, IKEDA was a connected person of the Company within the meaning of the Listing Rules by virtue of being a substantial shareholder and a director of MIS, a subsidiary of the Company. Since IKEDA was a connected person of the Company under the Listing Rules, the MIS IKEDA Disposal constituted a connected transaction 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 IKEDA Disposal exceeded 2.5% but were less than 25% and the consideration in respect of the MIS IKEDA Disposal was less than HK$10,000,000. The MIS IKEDA Disposal, therefore, constituted a connected transaction that was subject to the reporting and announcement requirements under Rule 14A.32 of the Listing Rules but was exempt from the independent shareholders’ approval requirements.

The purpose of this circular is to provide you with further information in relation to the MIS IKEDA Disposal and the MIS GRS Disposal.

THE MIS IKEDA DISPOSAL

The MIS IKEDA Disposal Agreement

Date of the agreement : 13 July 2007 Parties : (1) IKEDA (as purchaser) (2) SinoCom BVI (as vendor) Assets disposed of : the MIS IKEDA Disposal Shares

Consideration

The consideration for the MIS IKEDA Disposal was ¥48,000,000 (equivalent to approximately HK$3,037,975), the full amount of which has been paid in cash by IKEDA. The transfer of the MIS IKEDA Disposal Shares was completed on 13 July 2007.

The consideration for the MIS IKEDA Disposal 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 December 2006.

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LETTER FROM THE BOARD

THE MIS GRS DISPOSAL

The MIS GRS Disposal Agreement

• Date of the agreement : 13 July 2007 Parties : (1) Global Risk Systems (as purchaser), an Independent Third Party (and to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the ultimate beneficial owners of Global Risk Systems were also Independent Third Parties as at the Latest Practicable Date)

• (2) SinoCom BVI (as vendor)

• Assets disposed of : the MIS GRS Disposal Shares

Consideration

The consideration for the MIS GRS Disposal was ¥72,000,000 (equivalent to approximately HK$4,556,962), the full amount of which has been paid in cash by Global Risk Systems. The transfer of the MIS GRS Disposal Shares was completed on 13 July 2007.

The consideration for the MIS GRS Disposal 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 December 2006.

INFORMATION ON MIS

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 Disposals, the shareholding structure of MIS was as follows:

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LETTER FROM THE BOARD

Following completion of the Disposals and as at the Latest Practicable Date, the shareholding structure of MIS was as follows:

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Following completion of the MIS GRS Disposal, MIS ceased to be a subsidiary of the Company, and upon completion of the MIS IKEDA Disposal, SinoCom BVI ceased to be interested in any MIS Shares.

As at 31 December 2006, the unaudited net asset value of MIS was approximately ¥150,657,019 (equivalent to approximately HK$9,535,254), while the unaudited net asset value of MIS attributed to the MIS IKEDA Disposal Shares and the MIS GRS Disposal Shares was approximately ¥112,992,765 (equivalent to approximately HK$7,151,441).

The unaudited net profits of MIS before and after taxation and extraordinary items for the financial year ended 31 December 2006 amounted to approximately ¥11,586,151 (equivalent to approximately HK$733,301) and approximately ¥7,286,151 (equivalent to approximately HK$461,149), respectively, while the unaudited net profits of MIS before and after taxation and extraordinary items attributed to the MIS IKEDA Disposal Shares and the MIS GRS Disposal Shares for the same financial year amounted to approximately ¥8,689,613 (equivalent to approximately HK$549,976) and approximately ¥5,464,613 (equivalent to approximately HK$345,862), respectively. For the financial year which commenced on 1 April 2005 and ended on 31 March 2006, the unaudited net profits of MIS before and after taxation and extraordinary items amounted to approximately ¥2,716,100 (equivalent to approximately HK$171,905) and approximately ¥1,202,832 (equivalent to approximately HK$76,129), respectively, while the unaudited net profits of MIS before and after taxation and extraordinary items attributed to the MIS IKEDA Disposal Shares and the MIS GRS Disposal Shares for the same financial year amounted to approximately ¥2,037,075 (equivalent to approximately HK$128,929) and approximately ¥902,124 (equivalent to approximately HK$57,096), respectively.

REASONS FOR THE DISPOSALS

The accounting practices and policies of MIS were not compatible with the accounting practices and policies of the Group. As a result, the Directors were unable to consolidate, among other things, the financial results of MIS into the consolidated financial statements of the Group to comply with the relevant financial reporting standards issued by the Hong Kong Institute of Certified Public Accountants, and consequently, the auditors of the Company had to issue a qualified audit opinion on the consolidated financial statements of the Group for the year ended 31 December 2006. After the completion of the Disposals, the Company ceased to hold any MIS Shares and ceased to be subject to the issues arising from consolidation as described above.

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LETTER FROM THE BOARD

Furthermore, when the Group acquired its shareholding in MIS, one of its primary objectives was to utilise the expertise of MIS’s senior engineers to improve the quality of the services provided by the Group to Japanese customers. However, this objective has not been attained to the Group’s satisfaction. Hence, the Directors believe that it is in the best interests of the Group and the Shareholders as a whole for the Group to dispose of its shareholding in MIS.

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

FINANCIAL EFFECT OF THE DISPOSALS

SinoCom BVI acquired the MIS IKEDA Disposal Shares and the MIS GRS Disposal Shares from IKEDA in August 2006 at the consideration of ¥120,000,000 (equivalent to approximately HK$7,594,937). The Disposals resulted in a nil gain/loss position which will not have any financial impact on the Group’s consolidated accounts for the financial year ending 31 December 2007. The financial results of MIS have not been consolidated into the Group’s consolidated accounts since its acquisition according to the Hong Kong Financial Reporting Standards and the equity interest in MIS has been recorded as an investment in the consolidated balance sheet of the Group. Upon completion of the Disposals, the Group will treat the Disposals as disposals of investments with nil gain/loss on disposals of investments in its consolidated accounts for the financial year ending 31 December 2007.

Furthermore, the Disposals did not have any effect on the assets and liabilities of the Group.

The net proceeds from the Disposals will be used as general working capital of the Group.

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.

Global Risk Systems is a limited liability company incorporated in Japan which is principally engaged in the provision of business planning, global investment and fund management 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 regards 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

		No. of shares		Approx.
	Capacity/Nature	of the Company		percentage of
Name of Director	of Interest	(Note 3)	Notes	shareholding
Mr. Wang Xubing	Interest of a	563,000,000 (L)	1	51.04%
	controlled corporation
Mr. Wang Zhiqiang	Interest of a	563,000,000 (L)	2	51.04%
	controlled 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 shares
associated	Name of director	Capacity/Nature	of US$1.00 each	Percentage of
corporation	of the Company	of interest	(Note)	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 & 8 of Part XV of the SFO (including interests and short positions which they were 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.

3. DISCLOSURE OF SUBSTANTIAL SHAREHOLDERS’ INTERESTS

(a) Interests in the Company

As at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons (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:

				Approx.
	Capacity/Nature	No. of shares		percentage of
Name of shareholder	of Interest	of the Company	Notes	shareholding
China Way	Beneficial owner	563,000,000 (L)	1	51.04%
Madam Zhang Yue	Interest of spouse	563,000,000 (L)	2	51.04%
Madam Yuan Yue Ling	Interest of spouse	563,000,000 (L)	3	51.04%

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GENERAL INFORMATION

APPENDIX

Notes:

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

• (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. Madam Zhang Yue is also a director of China Way, a substantial shareholder of the Company.

• (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.

(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 persons (other than a Director or the chief executive of the Company) were 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
	Name of member	registered/issued
Name of shareholder	of the Group	capital of the company
Beijing Asia Pacific	SinoCom-ArtM Technology	8%
Communications	Co., Ltd.
Technology
Development
Co., Ltd.
Mr. Han Dong Hui	SinoCom-ArtM Technology	12%
	Co., Ltd.
Shirai Takao	NOH Co., Ltd.	25%

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.

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GENERAL INFORMATION

APPENDIX

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.

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 the 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 Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands. The head office of the Company is located at 9/F, Tengda Building, No. 168 Xizhimenwai Street, Haidian District, Beiing, PRC. The 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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