Long Investment Corp — Proxy Solicitation & Information Statement 2004

Sep 27, 2004

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shui On Construction and Materials Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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.

SHUI ON CONSTRUCTION AND MATERIALS LIMITED 瑞安建業有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

DISCLOSEABLE TRANSACTION

DISPOSAL OF PROPERTY

24 September 2004

• For identification purpose only

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5

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DEFINITIONS

In this circular, the following expressions have the following meanings unless the context requires otherwise:

• “Company”

Shui On Construction and Materials Limited, a company incorporated in Bermuda and listed on the main board of the Stock Exchange

• “Director(s)” the director(s) of the Company

• “Disposal”

• “Formal Agreement”

• the proposed disposal of the Property pursuant to the terms of the Provisional Agreement

• the formal sale and purchase agreement dated 15 September 2004 entered into between the Vendor and the Purchase pursuant to the terms of the Provisional Agreement

• “Group” the Company and its subsidiaries or, where the context so requires, any of them

• “HK$” Hong Kong dollars

• “Hong Kong”

• “Independent Third Party”

• “Latest Practicable Date”

• the Hong Kong Special Administrative Region of the People's Republic of China

• an independent third party not connected with any of the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries or any of their respective associates (as defined in the Listing Rules)

• 23 September 2004, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules”

• “Property”

• the Rules Governing the Listing of Securities on the Stock Exchange

• an industrial building known as “On King Building” located at Nos. 54 and 56 Tsun Yip Street, Kwun Tong, Kowloon

• “Provisional Agreement”

• “Purchaser”

• “Shareholders”

• “SFO”

• “Stock Exchange”

• “Vendor”

• a provisional sale and purchase agreement dated 1 September 2004 entered into between the Vendor and the Purchaser in relation to the disposal of the Property

• a company which is, and each of whose beneficial owners is, an Independent Third Party

• holders of shares of par value HK$1.00 each in the issued share capital of the Company

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

The Stock Exchange of Hong Kong Limited

• Kotemax Limited, a indirect wholly owned subsidiary of the Company

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LETTER FROM THE BOARD

SHUI ON CONSTRUCTION AND MATERIALS LIMITED 瑞安建業有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors: Lo Hong Sui, Vincent (Chairman) Wong Ying Wai, Wilfred (Vice-chairman) Choi Yuk Keung, Lawrence (Vice-chairman) Wong Yuet Leung, Frankie (Chief Executive Officer) Wong Fook Lam, Raymond Lowe Hoh Wai Wan, Vivien Wong Hak Wood, Louis

Independent non-executive Directors: Griffiths, Anthony Enright, Michael John Cheung Kin Tung, Marvin

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head Office: 34th Floor, Shui On Centre 6-8 Harbour Road Hong Kong 24 September 2004

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

INTRODUCTION

By an announcement dated 3 September 2004, the Directors announced that on 1 September 2004, Kotemax Limited, an indirect wholly owned subsidiary of the Company, entered into a provisional sale and purchase agreement with an independent third party to dispose of the Property known as “On King Building” located at Nos. 54 and 56 Tsun Yip Street, Kwun Tong, Kowloon at the consideration of HK$135,000,000.

The disposal constitutes a discloseable transaction of the Company under the Listing Rules. The purpose of this circular is to provide Shareholders with further information on the Disposal and other information in compliance with the requirements of the Listing Rules.

• For identification purpose only

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LETTER FROM THE BOARD

BACKGROUND OF THE DISPOSAL OF THE PROPERTY

Date of the Provisional Agreement: 1 September 2004

Parties:

• (i) Vendor : Kotemax Limited, an indirect wholly owned subsidiary of the Company and the Group; and

• (ii) Purchaser : a company which is, and each of whose beneficial owners is, an Independent Third Party

Property to be sold (for industrial use):

(i) Address : On King Building, Nos. 54 and 56 Tsun Yip Street, Kwun Tong, Kowloon (ii) Gross floor area : a 13-storey industrial building of approximately 212,300 square feet, plus 10 lorry parks and 11 private carparks

The Vendor has to prove good title to the Purchaser. However, the Vendor gives no warranty as to the amounts of rents, licence fees or other fees recoverable from the existing tenants of the Property, and the Purchaser shall be deemed to purchase with full knowledge of those tenancies and shall take the Property subject to the rights of the tenants thereunder and shall raise no objection relating thereto.

Consideration and payment terms:

The consideration of HK$135,000,000 was agreed after arm’s length negotiations between the Vendor and the Purchaser. In determining the amount of such consideration, the Vendor took into account the current market value of properties for industrial use in the market in the area and the valuation, made by Chesterton Petty Ltd as mentioned below, of the Property of HK140,000,000 as at 31 March 2004.

The consideration shall be payable in cash as follows:

• (i) an initial deposit of HK$8,000,000 was paid on the signing of the Provisional Agreement;

• (ii) a further deposit of HK$5,500,000 was paid on the signing of the Formal Agreement on 15 September 2004; and

• (iii) the balance of HK$121,500,000 will be paid on completion of the Disposal on 1 November 2004.

The Property was valued at HK$140,000,000 as at 31 March 2004 by Chesterton Petty Ltd, an independent firm of valuers. The carrying value of the Property as at 1 September 2004 was HK$140,000,000, therefore the loss expected to accrue to the Group is HK$5,000,000. The net (loss) profit, before taxation and extraordinary items, attributable to the Property for the two financial years ended 31 March 2003 and 31 March 2004 respectively were (HK$6,900,000)

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LETTER FROM THE BOARD

and HK$23,600,000. The net (loss) profit, after taxation and extraordinary items, attributable to the Property for the two financial years ended 31 March 2003 and 31 March 2004 respectively were (HK$6,800,000) and HK$21,000,000.

Formal Agreement:

Pursuant to the terms of the Provisional Agreement, a formal sale and purchase agreement for the Disposal was signed by the parties on 15 September 2004.

Completion Date:

Pursuant to the terms of the Provisional Agreement and the Formal Agreement, completion of the Disposal shall take place on 1 November 2004.

REASONS FOR THE DISPOSAL AND USE OF SALE PROCEEDS

The Property was held by the Group for investment purposes. Property investment in Hong Kong is not a core business of the Group and the Disposal of the Property is made in view of improved property market conditions in Hong Kong. The sale proceeds will be used for development of the Group's core businesses, including the cement production and property development businesses on the Chinese Mainland.

GENERAL

The Group engages in cement operations on the Chinese Mainland, construction and construction materials in Hong Kong and the Pearl River Delta Region of the Chinese Mainland and also in housing development on the Chinese Mainland. To the best of the knowledge, information and belief of the directors of the Company, the Purchaser engages in the manufacturing business.

The Directors are of the view that the Disposal is on normal commercial terms which are fair and reasonable and is in the interest of the Company and its shareholders as a whole.

The Directors confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the Purchaser is, and each of whose beneficial owners is, an Independent Third Party.

The Disposal constitutes a discloseable transaction of the Company under the Listing Rules.

ADDITIONAL INFORMATION

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

Yours faithfully, By Order of the Board Shui On Construction and Materials Limited Janice Tam Company Secretary

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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 with regard to the Company and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts with regard to the Company, the omission of which would make any statement in this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and chief executives

As at the Latest Practicable Date, the interests and short positions of the Directors and the Company’s chief executives in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the 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), the Model Code for Securities Transactions by Directors of Listed Companies and which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

Interests in the Shares

	Number of ordinary shares	Number of ordinary shares
	in the Company
Name of Director	Personal Interests	Other Interests
Lo Hong Sui, Vincent	–	185,183,000
Wong Ying Wai, Wilfred	120,000	–
Choi Yuk Keung, Lawrence	602,000	–
Wong Yuet Leung, Frankie	–	–
Wong Fook Lam, Raymond	–	–
Lowe Hoh Wai Wan, Vivien	–	–
Wong Hak Wood, Louis	184,000	–

• Note: The 185,183,000 shares are held as to 166,148,000 shares and 19,035,000 shares by the ultimate holding company, Shui On Company Limited (“SOCL”) and Shui On Finance Company Limited respectively, which is an indirect wholly-owned subsidiary of SOCL. SOCL is owned by the Bosrich Unit Trust. The units of the Bosrich Unit Trust are the property of a discretionary trust of which Mr. Lo Hong Sui, Vincent is a discretionary beneficiary. Accordingly, Mr. Lo Hong Sui, Vincent is deemed to be interested in such shares.

(b) Share Options of the Company

Following the amendments of Chapter 17 of the Listing Rules on 1st September 2001, the employee share option scheme adopted on 20th January 1997 (the “ Old Scheme ”) has been terminated and replaced by a new share option scheme on 27th August 2002 (the “ New Scheme ”). All options granted previously under the Old Scheme continue to be valid and exercisable.

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GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, the following Directors had interests in right of options granted under the Old Scheme and the New Scheme:

			Period during	Number of
		Subscription	which options	ordinary
	Date	price per	outstanding	shares subject
Name of Director	of grant	share	are exercisable	to the options
		HK$
Wong Ying Wai,	27.08.2002	6.00	27.2.2003 to	80,000
Wilfred			26.8.2007
	27.08.2002	6.00	27.8.2005 to	5,000,000**
			26.8.2010
Choi Yuk Keung,	4.7.2000	9.56	4.1.2001 to	70,000
Lawrence			3.7.2005
	17.7.2001	9.30	17.1.2002 to	140,000
			16.7.2006
	27.8.2002	6.00	27.2.2003 to	168,000
			26.8.2007
	27.8.2002	6.00	27.8.2005 to	5,000,000**
			26.8.2010
Wong Yuet Leung,	4.7.2000	9.56	4.1.2001 to	200,000
Frankie			3.7.2005
	17.7.2001	9.30	17.1.2002 to	200,000
			16.7.2006
	27.8.2002	6.00	27.2.2003 to	160,000
			26.8.2007
	27.8.2002	6.00	27.8.2005 to	2,000,000**
			26.8.2010
Wong Fook Lam,	4.7.2000	9.56	4.1.2001 to	160,000
Raymond			3.7.2005
	17.7.2001	9.30	17.1.2002 to	160,000
			16.7.2006
	27.8.2002	6.00	27.2.2003 to	110,000
			26.8.2007
	27.8.2002	6.00	27.8.2005 to	2,000,000**
			26.8.2010

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GENERAL INFORMATION

APPENDIX

			Period during	Number of
		Subscription	which options	ordinary
	Date	price per	outstanding	shares subject
Name of Director	of grant	share	are exercisable	to the options
		HK$
Lowe Hoh Wai Wan	4.7.2000	9.56	4.1.2001 to	160,000
Vivien			3.7.2005
	17.7.2001	9.30	17.1.2002 to	160,000
			16.7.2006
	27.8.2002	6.00	27.2.2003 to	66,000
			26.8.2007
	27.8.2002	6.00	27.8.2005 to	2,000,000**
			26.8.2010
Wong Hak Wood,	4.7.2000	9.56	4.1.2001 to	280,000
Louis			3.7.2005
	17.7.2001	9.30	17.1.2002 to	280,000
			16.7.2006
	27.8.2002	6.00	27.2.2003 to	132,000
			26.8.2007
	27.8.2002	6.00	27.8.2005 to	2,000,000**
			26.8.2010

• ** These options were granted under the mega grant as stipulated in the circular dated 30 July 2002. Certain financial and performance targets must be achieved before the options granted will vest and be exercisable.

As at the Latest Practicable Date, 30,408,000 Shares may be issued upon exercise of all outstanding options granted. This represents approximately 11% of the Shares in issue.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or the Company’s chief executives, had, under Divisions 7 and 8 of Part XV of the SFO, nor were they taken to or deemed to have under such provisions of the SFO, any interests or short positions in the shares, underlying shares or debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) or any interests which are required to be entered into the register kept by the Company pursuant to section 352 of the SFO or any interests which are required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies in the Listing Rules.

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GENERAL INFORMATION

APPENDIX

(c) Interests of shareholders discloseable pursuant to the SFO

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, had an interest or short position in the shares or 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:

		Percentage of
	Number of ordinary	shareholding
Name	shares in the Company	in the Company
Cheah Cheng Hye	16,666,000	6.22%

Of the 16,666,000 shares, 16,204,000 shares are held by Value Partners Limited which is controlled by Mr. Cheah Cheng Hye.

(d) Substantial shareholding in other members of the Group

Save as disclosed below, the Directors are not aware of any other person (other than a Director or chief executive of the Company or his/her respective associate(s)) who, as at the Latest Practicable Date, was directly or indirectly interested in 10 per cent. 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:

Name of owner of shares		Effective
or equity interest		% equity
(as the case may be)	Name of subsidiary	interest held
番禺市廣鋁實業總公司	Panyu Dynamic Mark Steel	20%
	& Aluminium Engineering
	Co. Ltd.
Eversound Enterprise Ltd.	Panyu Dynamic Mark	16%
	Steel & Aluminium
	Engineering Co. Ltd.
Lung Shing Construction &	Lamma Concrete Products Ltd.	40%
Materials Company Ltd.
Lung Shing Construction &	Guangdong Lamma	40%
Materials Company Ltd.	Concrete Products Limited

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GENERAL INFORMATION

APPENDIX

Name of owner of shares		Effective
or equity interest		% equity
(as the case may be)	Name of subsidiary	interest held
番禺市廣鋁實業總公司	Panyu Shui Fai Metal Works	22.5%
	Engineering Company Limited
Hip Kwan Engineering Co. Ltd.	Panyu Shui Fai Metal Works	22.5%
	Engineering Company Limited
Eversound Enterprises Ltd.	Dynamic Mark Limited	20%
番禺市廣鋁實業總公司	Guang Rui Construction	25%
	Materials (Panyu) Ltd.
Hip Kwan Engineering	Shui Fai Metal Works	22.5%
Co. Ltd.	Engineering Co. Ltd.
Eversound Enterprise Ltd.	Shui Fai Metal Works	22.5%
	Engineering Co. Ltd.
Jadson Construction Ltd.	Pacific Extend Ltd.	33%

(e) Material Interests

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have since 31 March 2004 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to the Company or any of its subsidiaries.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries, which was subsisting and was significant in relation to the business of the Group.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors and their respective associates have any interest in a business apart from the Group’s business, which competes or is likely to compete, directly or indirectly, with the Group’s business and would require disclosure under Rule 8.10 of the Listing Rules.

3. MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2004, the date to which the latest published audited financial statements of the Company were made up.

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GENERAL INFORMATION

APPENDIX

4. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and, so far as the Directors are aware, no litigation or claim of material importance is pending or threatened against the Company or any of its subsidiaries.

5. SERVICE CONTRACTS

There is no existing or proposed service contracts between any of the Directors and the Company or any of its subsidiaries, other than contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

6. GENERAL

• (a) The Qualified Accountant of the Company is Mr. Raymond F L Wong, FCA, FHKSA, CPA.

• (b) The secretary of the Company is Ms. Tam Ching Wah, Janice M.Sc, FCCA, AHKSA.

• (c) The principal share registrar and the transfer office of the Company is the Bank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda.

• (d) The Hong Kong branch share registrar and transfer office is Standard Registrars Limited, 28th Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong.

• (e) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company is at 34th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong.

• (f) The English text of this circular shall prevail over the Chinese text.

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