Long Investment Corp — Proxy Solicitation & Information Statement 2008

Jul 17, 2008

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 or other registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

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(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities 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.

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(Stock Code: 983)

DISCLOSEABLE TRANSACTION

FURTHER CASH INJECTIONS INTO LSOC IN RELATION TO PRC CEMENT OPERATIONS

*for identification purpose only

18 July 2008

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6

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DEFINITIONS

In this circular, the following expressions have the meanings respectively set opposite them unless the context otherwise requires:

“associate(s)”, “connected each has the meaning ascribed to it in the Listing Rules; person(s)” “Company” Shui On Construction and Materials Limited, a company incorporated in Bermuda whose securities are listed on the main board of the Stock Exchange;

• “Directors” directors of the Company;

• “Financiere Lafarge” Financiere Lafarge, a wholly-owned subsidiary of Lafarge S.A.;

“Further Injections” the cash injections to LSOC by Glorycrest in an aggregate amount of approximately US$45.4 million (approximately HK$354.1 million) as agreed between Glorycrest and Financiere Lafarge on 4 June 2008 and 23 June 2008; “Glorycrest” Glorycrest Holdings Limited, a wholly-owned subsidiary 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; “Injections” collectively the Previous Injections and the Further Injections;

• “Lafarge S.A.” Lafarge S.A., a company incorporated in France whose securities are listed on the Euronext Paris Stock Exchange;

• “Latest Practicable Date” 15 July 2008, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein;

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

• “LSOC” Lafarge Shui On Cement Limited, a company incorporated in Hong Kong and is a jointly controlled entity held indirectly as to 45% by the Company and 55% by Lafarge S.A.;

“LSOC Group”

LSOC and its subsidiaries;

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DEFINITIONS

“Previous Injections”	the previous cash injections contributed by Glorycrest to	the previous cash injections contributed by Glorycrest to	the previous cash injections contributed by Glorycrest to	the previous cash injections contributed by Glorycrest to
	LSOC in the 12 months preceding the	Further Injections,
	which amounted to the equivalent	of	approximately
	HK$274.5 million;
“PRC”	the People’s Republic of China, and for	the	purpose	of this
	circular, excluding Hong Kong and	the	Macau	Special
	Administrative Region;
“SFO”	Securities and Futures Ordinance (Chapter 571 of the			laws of
	Hong Kong);
“Shareholders”	holders of the shares of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“US$”	United States dollars, the lawful currency of the United States
	of America; and
“%”	per cent.

Unless otherwise specified in this circular and for the purpose of illustration only, US$ is translated into HK$ at the rate of US$1.00 = HK$7.80. No representation is made that any amounts in US$ have been or could be converted at the above rate or at any other rates or at all.

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LETTER FROM THE BOARD

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(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors:

Mr. Lo Hong Sui, Vincent (Chairman) Mr. Choi Yuk Keung, Lawrence (Vice-Chairman) Mr. Wong Yuet Leung, Frankie (Chief Executive Officer) Ms. Lau Jeny (Chief Financial Officer) Mrs. Lowe Hoh Wai Wan, Vivien

Non-executive Director: Professor Michael Enright

Independent Non-executive Directors: Mr. Anthony Griffiths Mr. Gerrit de Nys

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head Office and Principal Place of Business in Hong Kong: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

18 July 2008

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION

FURTHER CASH INJECTIONS INTO LSOC IN RELATION TO PRC CEMENT OPERATIONS

INTRODUCTION

It was announced on 3 July 2008 that Further Injections were made to LSOC in June 2008 for working capital purposes. The Further Injections together with the Previous Injections constitute a discloseable transaction of the Company. The purpose of this circular is to provide you with the details of the Injections and other information as required under the Listing Rules.

THE INJECTIONS

On 4 June 2008 and 23 June 2008, Glorycrest (a wholly-owned subsidiary of the Company) agreed to inject further cash into LSOC, a jointly controlled entity held as to 45% by Glorycrest and 55% by Financiere Lafarge, in the aggregate amount of approximately US$45.4 million (approximately HK$354.1 million) (the “ Further Injections ”) in proportion to its existing shareholding in LSOC.

• for identification purpose only

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LETTER FROM THE BOARD

Prior to the Further Injections, Glorycrest and Financiere Lafarge have made various cash injections into LSOC, which were also made in proportion to their respective shareholdings in LSOC. The total cash injections into LSOC in the 12 months preceding the Further Injections amounted to the equivalent of approximately HK$610.0 million, which were contributed by Glorycrest (as to the equivalent of approximately HK$274.5 million) (the “ Previous Injections ”, together with the Further Injections, the “ Injections ”) and Financiere Lafarge (as to the equivalent of approximately HK$335.5 million).

The Injections have been funded by internal resources and unutilised banking facilities of the Company. Such injections have taken the form of capital injections by Glorycrest and Financiere Lafarge in proportion to their existing shareholdings in LSOC. After the Injections, LSOC will continue to be accounted for by the Company as a jointly controlled entity, and the respective interests of the Company and Lafarge S.A. in LSOC will remain unchanged.

FINANCIAL INFORMATION OF THE LSOC GROUP

The audited consolidated net profits (losses) before and after tax and extraordinary items for the years ended 31 December 2007 and 31 December 2006, and audited consolidated net asset value at 31 December 2007 of the LSOC Group are approximately as follows:

Consolidated net profit (loss)	Consolidated net profit (loss)
before tax and extraordinary	after tax and extraordinary	Consolidated net
items for the year ended	items for the year ended	asset value at
31 December	31 December	31 December
2007 2006	2007 2006	2007
HK$ million HK$ million	HK$ million HK$ million	HK$ million
239.9 (71.6)	224.2 (147.7)	6,475.9

REASONS FOR THE INJECTIONS

LSOC is principally engaged in the manufacturing and sale of cement and associated products in the PRC, and is the flagship of the Group’s cement business in the PRC. The Directors (including the independent non-executive Directors) expect that the Injections will provide LSOC with additional working capital for expanding its cement operations in the PRC and further strengthen the capital base of LSOC.

The Directors (including the independent non-executive Directors) consider that the Injections are on normal commercial terms and in the ordinary and usual course of business of the Group, and that the terms of the Injections are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

It is expected that the Injections will not have material impact on the total assets, total liabilities and existing earnings of the Group.

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LETTER FROM THE BOARD

IMPLICATIONS OF THE LISTING RULES

The applicable percentage ratios for the Injections as defined in Rule 14.07 of the Listing Rules are more than 5% but less than 25% for the Company. Accordingly, the Injections constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

GENERAL INFORMATION

The Group is principally engaged in property development, asset management, cement production, construction, investment in property development and venture capital investment in Hong Kong and the PRC.

Lafarge S.A. is a world leader in building materials and is highly regarded in the manufacturing of cement, aggregates and concrete, and gypsum. Financiere Lafarge is an investment holding company for holding the interest in LSOC.

Save that Financiere Lafarge holds 55% of the issued shares in LSOC, Financiere Lafarge and Lafarge S.A. are, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, third parties independent of the Company and connected persons of the Company.

FURTHER INFORMATION

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

Yours faithfully For and on behalf of Shui On Construction and Materials Limited Lo Hong Sui, Vincent 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 not contained in this circular, the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(A) Interests of Directors and chief executive

At the Latest Practicable Date, the interests and 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 were taken or deemed to have been taken under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Issuers or which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

(a) Long position in the shares of the Company

	Number of ordinary	Number of ordinary	Approximate
	shares in the Company		percentage of
	Personal	Other	shareholding
Name of Director	interests	interests	in the Company
Lo Hong Sui, Vincent	�	181,981,000	56.56%
		(Note)
Choi Yuk Keung, Lawrence	1,100,000	�	0.34%
Wong Yuet Leung, Frankie	800,000	�	0.24%
Lowe Hoh Wai Wan, Vivien	720,000	�	0.22%

Note: Among 181,981,000 shares beneficially owned by Shui On Company Limited (“SOCL”), 166,148,000 shares and 15,833,000 shares were held respectively by SOCL and Shui On Finance Company Limited, which is an indirect wholly-owned subsidiary of SOCL. SOCL is owned by the Bosrich Unit Trust, the trustee of which is Bosrich Holdings Inc. 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 and HSBC International Trustee Limited is the trustee. Accordingly, Mr. Lo Hong Sui, Vincent, HSBC International Trustee Limited and Bosrich Holdings Inc. are deemed to be interested in such shares under the SFO.

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GENERAL INFORMATION

APPENDIX

• (b) Short position in the shares of the Company

	Number of ordinary	Number of ordinary	Approximate
	shares in the Company		percentage of
	Personal	Other	shareholding
Name of Director	interests	interests	in the Company
Lo Hong Sui, Vincent	�	1,600,000	0.49%
		(Note)

Note: These shares represent the call option granted by SOCL on 27 August 2002 to Mr. Wong Yuet Leung, Frankie as part of the incentive reward to his services to the Company. Mr. Lo Hong Sui, Vincent, HSBC International Trustee Limited and Bosrich Holdings Inc. are deemed to have short position in these shares under the SFO.

(c) Share options of the Company

At the Latest Practicable Date, the following Directors had interests in the share options granted by the Company under the share option scheme adopted by the Company on 27 August 2002:

			Period during	Number
		Subscription	which options	of ordinary
		price per	outstanding are	shares subject
Name of Director	Date of grant	share	exercisable	to the options
		HK$
Choi Yuk Keung,	3-1-2007	16.78	3-1-2010 to	700,000
Lawrence			2-1-2017
	14-6-2007	20.96	14-12-2007 to	250,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	250,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	1,000,000
			6-5-2018
Wong Yuet Leung,	1-8-2006	14.00	1-2-2007 to	2,000,000
Frankie			31-7-2011
	3-1-2007	16.78	3-1-2010 to	1,500,000
			2-1-2017
	14-6-2007	20.96	14-12-2007 to	500,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	500,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	2,000,000
			6-5-2018

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APPENDIX

GENERAL INFORMATION

			Period during	Number
		Subscription	which options	of ordinary
		price per	outstanding are	shares subject
Name of Director	Date of grant	share	exercisable	to the options
		HK$
Lau Jeny	7-5-2008	19.76	7-5-2011 to	1,000,000
			6-5-2018
Lowe Hoh Wai Wan,	1-8-2006	14.00	1-2-2007 to	120,000
Vivien			31-7-2011
	3-1-2007	16.78	3-1-2010 to	625,000
			2-1-2017
	14-6-2007	20.96	14-12-2007 to	176,000
			13-6-2012
	7-5-2008	19.76	7-11-2008 to	200,000
			6-5-2013
	7-5-2008	19.76	7-5-2011 to	750,000
			6-5-2018

(d) Call option over the shares of the Company

At the Latest Practicable Date, the following Director had a call option granted by SOCL over the shares of the Company pursuant to the arrangement mentioned in the note to item (b) above:

				Number
				of ordinary
			Exercise	shares subject to
**Name **	of Director	Exercise price	period	the call option
		HK$
Wong	Yuet Leung, Frankie	6.00	27-8-2005 to	1,600,000
			26-8-2010

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GENERAL INFORMATION

APPENDIX

• (e) Long position in the shares of Shui On Land Limited (“SOL”)

	Number of ordinary	Number of ordinary	Approximate
	shares in SOL		percentage of
	Personal	Other	shareholding
Name of Director	interests	interests	in SOL
Lo Hong Sui, Vincent	�	2,277,750,225	54.41%
		(Note)

• Note: These shares are directly held by subsidiaries of SOCL, namely, Shui On Investment Company Limited, Shui On Properties Limited and New Rainbow Investments Limited. SOCL is owned by the Bosrich Unit Trust, the trustee of which is Bosrich Holdings Inc. 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 and HSBC International Trustee Limited is the trustee. Accordingly, Mr. Lo Hong Sui, Vincent is deemed to be interested in such shares under the SFO.

• (f) Long position in the shares of China Central Properties Limited (“CCP”)

	Number of ordinary	Approximate
	shares in CCP	percentage of
	Personal Other	shareholding
Name of Director	interests interests	in CCP
Anthony Griffiths	6,000 �	0.002%

Save as disclosed above, 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 were taken or deemed to have been taken under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Issuers or which were required to be entered in the register required to be kept under section 352 of the SFO.

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GENERAL INFORMATION

APPENDIX

(B) Interests of Shareholders discloseable pursuant to the SFO

Save as disclosed below and under the section “Interests of Directors and chief executive” above, 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, 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:

				Approximate
			Number of	percentage of
			ordinary shares/	shareholding
	Class of		underlying	in the
Name of Shareholders	shares	Capacity	shares held	Company
John Zwaanstra	Ordinary	Interest of	54,938,248 (L)	17.07%
		controlled	(Note 2)
		corporation
Penta Investment	Ordinary	Investment	54,938,248 (L)	17.07%
Advisers Limited		manager	(Note 2)
Mercurius GP LLC	Ordinary	Founder of	25,755,951 (L)	8.00%
		discretionary trust	(Note 2)
Todd Zwaanstra	Ordinary	Trustee	25,755,951 (L)	8.00%
			(Note 2)
Penta Asia Fund, Ltd.	Ordinary	Interest of	25,755,951 (L)	8.00%
		controlled	(Note 2)
		corporation
Cheah Cheng Hye	Ordinary	Founder of	25,554,000 (L)	7.94%
		discretionary trust
To Hau Yin	Ordinary	Interest of spouse	25,554,000 (L)	7.94%
Hang Seng Bank Trustee	Ordinary	Trustee	25,554,000 (L)	7.94%
International Limited
Cheah Company Limited	Ordinary	Interest of	25,554,000 (L)	7.94%
		controlled
		corporation
Cheah Capital	Ordinary	Interest of	25,554,000 (L)	7.94%
Management Limited		controlled
		corporation
Value Partners Group	Ordinary	Interest of	25,554,000 (L)	7.94%
Limited		controlled
		corporation
Value Partners Limited	Ordinary	Investment	25,554,000 (L)	7.94%
		manager

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GENERAL INFORMATION

APPENDIX

				Approximate
			Number of	percentage of
			ordinary shares/	shareholding
	Class of		underlying	in the
Name of Shareholders	shares	Capacity	shares held	Company
Citigroup Inc.	Ordinary	Interest of	17,131,561 (L)	5.32%
		controlled	150,000 (S)	0.04%
		corporation/	757,840 (P)	0.23%
		custodian	(Note 3)
		corporation/
		approved lending
		agent

Notes:

1. “L” denotes a long position, “S” denotes a short position and “P” denotes interest in a lending pool.

2. Among the interests owned by these shareholders, 5,560,000 shares are derivative interests.

3. Among the interests owned by this shareholder, 3,385,083 shares are derivative interests.

(C) 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, at the Latest Practicable Date, 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:

		Effective
Name of owner of shares or equity		% equity
interest (as the case may be)	Name of subsidiary	interest held
廣州市番禺廣鋁實業有限公司	Panyu Dynamic Mark Steel and	20%
(Guangzhou Panyu Guanglu	Aluminium Engineering Co. Ltd.
Industrial Co., Ltd.)
Eversound Enterprise Limited	Panyu Dynamic Mark Steel and	16%
	Aluminium Engineering Co. Ltd.
Metro Materials Engineering	Lamma Concrete Products Limited	40%
Company Limited
Metro Materials Engineering	廣東南丫混凝土構件有限公司	40%
Company Limited
廣州市番禺廣鋁實業有限公司	Panyu Rui Hui Metal Works	22.5%
(Guangzhou Panyu Guanglu	Engineering Co. Ltd.
Industrial Co., Ltd.)

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GENERAL INFORMATION

APPENDIX

		Effective
Name of owner of shares or equity		% equity
interest (as the case may be)	Name of subsidiary	interest held
Hip Kwan Engineering	Panyu Rui Hui Metal Works	22.5%
Company Limited	Engineering Co. Ltd.
Eversound Enterprise Limited	Dynamic Mark Limited	20%
Hip Kwan Engineering	Shui Fai Metal Works Engineering	22.5%
Company Limited	Company Limited
Eversound Enterprise Limited	Shui Fai Metal Works Engineering	22.5%
	Company Limited
Ecomat (Hong Kong) Limited	Pacific Extend Limited	18%*
Win Media Limited	Pacific Extend Limited	10%#
上海建五實業有限公司	Shanghai Shui On Construction Co., Ltd.	15%
上海國際集團投資管理有限公司	Shanghai Shui On Construction Co., Ltd.	15%
江蘇昆山德普設備租賃有限公司	重慶騰輝德晟工程技術有限公司	20%
上海和晟機械成套設備有限公司	重慶騰輝德晟工程技術有限公司	20%
重慶市第二建築材料廠	Chongqing T.H. White Cement Co. Ltd.	40%
重慶建工集團有限責任公司	重慶騰建石材開發有限責任公司	45%
Hangshing Limited	Honour Link Development Limited	24%
Glory Prospect International	Honour Link Development Limited	24%
Company Limited
Shenzhen Yue Jie Concrete	Lamma Yue Jie Company Limited	40%
Products Co., Ltd.

• The 18% equity interest held by Ecomat (Hong Kong) Limited represents 18% of the issued ordinary shares and carries voting right of 11.25% of the total issued share capital comprising ordinary shares and special shares.

The 10% equity interest held by Win Media Limited represents 10% of the issued ordinary shares and carries voting right of 6.25% of the total issued share capital comprising ordinary shares and special shares.

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GENERAL INFORMATION

APPENDIX

3. SERVICE CONTRACTS

At the Latest Practicable Date, none of the Directors had entered into any service contract with the Company other than contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation).

4. LITIGATION

At the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against the Group.

5. COMPETING BUSINESS INTERESTS OF DIRECTORS

At the Latest Practicable Date, Mr. Lo Hong Sui, Vincent was the chairman and the controlling shareholder of SOL which is engaged in property development in the PRC.

Save as referred to herein, at the Latest Practicable Date, none of the Directors or their respective associates had any interest in a business which competes or may compete with the business of the Group.

6. GENERAL

• (a) The qualified accountant of the Company is Ms. Lau Jeny, a member of The American Institute of Certified Public Accountants, the Hong Kong Institute of Certified Public Accountants and the Hong Kong Securities Institute.

• (b) The secretary of the Company is Ms. Tsang Yuet Kwai, an Associate of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.

• (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 of the Company is Tricor Standard Limited, 26th Floor, Tesbury Centre, 28 Queen’s Road East, 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, Hong Kong.

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

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