Modern Land (China) Co., Limited — Proxy Solicitation & Information Statement 2002

Oct 16, 2002

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, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shougang Concord Technology Holdings Limited, you should at once hand this circular with the accompanying form of proxy to the purchaser or the transferee 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.

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���������� SHOUGANG CONCORD TECHNOLOGY HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee Shenyin Wanguo Capital (H.K.) Limited

A letter from the Independent Board Committee (as defined herein) is set out on pages 8 and 9 of this circular.

A letter from Shenyin Wanguo Capital (H.K.) Limited containing its advice to the Independent Board Committee is set out on pages 10 to 15 of this circular.

A notice convening an extraordinary general meeting of Shougang Concord Technology Holdings Limited to be held at Concord Rooms II & III, 8/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 8 November 2002 at 10:30 a.m. is set out on pages 22 and 23 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the office of the share registrars of the Company, Tengis Limited, at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the meeting or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not prevent you from attending and voting at the meeting if you so wish.

16 October 2002

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
– Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
– The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
– Reasons for the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
– Effect of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
– Connected Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
– Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
– Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
– Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from Shenyin Wanguo Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

– i –

DEFINITIONS

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

“Agreement”	the sale and purchase agreement dated 25 September 2002
	entered into between Printronics and Jinling in respect of the
	Disposal
“associate”	having the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Company”	Shougang Concord Technology Holdings Limited, a company
	incorporated in Hong Kong with limited liability, the shares of
	which are listed on the main board of the Stock Exchange
“Director(s)”	director(s) of the Company
“Disposal”	the disposal of the Company’s entire equity interest in Shanghai
	Printronics, representing 60.2% of the registered capital in
	Shanghai Printronics
“Extraordinary General Meeting”	the extraordinary general meeting of the Company to be held at
	Concord Rooms II & III, 8/F., Renaissance Harbour View Hotel
	Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 8
	November 2002 at 10:30 a.m. and any adjournment thereof, the
	notice of which is set out on pages 22 and 23 of this circular
“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
“Independent Board Committee”	the independent board committee of the Company comprising
	two of the independent non-executive Directors, being
	Mr. Chan Wah Tip, Michael and Mr. Liu Wei, appointed to
	advise the Independent Shareholders in relation to the
	Agreement

– 1 –

DEFINITIONS

“Independent Shareholders”	shareholders of the Company other than Jinling and its associates
“Jinling”	����������(Shanghai Jinling Holdings Company
	Limited), a company incorporated in the PRC with limited
	liability, is a substantial shareholder of, and interested in 39.8%
	of the registered capital of Shanghai Printronics. Jinling is a
	connected person of the Company under the Listing Rules
“Latest Practicable Date”	11 October 2002, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information in
	this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China and, for the purpose of this
	circular, excludes Hong Kong and the Macau Special
	Administrative Region of the People’s Republic of China
“Printronics”	Printronics China Limited, a company incorporated in Hong
	Kong and a wholly-owned subsidiary of the Company
“RMB”	Renminbi, the lawful currency of the PRC
“SDI Ordinance”	Securities (Disclosure of Interests) Ordinance (Chapter 396 of
	the Laws of Hong Kong)
“Shanghai Printronics”	���������Shanghai Printronics Circuit Corporation,
	a Sino-foreign co-operative joint venture established in the PRC
	and a subsidiary of the Company
“Shareholders”	holders of the Shares
“Share(s)”	shares(s) of HK$0.25 each in the share capital of the Company
“Shenyin Wanguo Capital”	Shenyin Wanguo Capital (H.K.) Limited, an investment adviser
	and a securities dealer registered with the Securities and Futures
	Commission under the Securities Ordinance (Chapter 333 of
	the Laws of Hong Kong)

– 2 –

DEFINITIONS

“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiary”	having the meaning ascribed to it under the Companies
	Ordinance (Chapter 32 of the Laws of Hong Kong)
“US$”	the United States Dollars, the lawful currency of the United
	States
“%”	per cent.

For the purpose of this circular, unless the context otherwise requires, RMB 1 = HK$0.9174 for the year 2000 and RMB 1 = HK$0.9422 for the year 2001 and thereafter.

– 3 –

LETTER FROM THE BOARD

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���������� SHOUGANG CONCORD TECHNOLOGY HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

Directors: Cao Zhong (Chairman) Yu Jian (President) Xu Xianghua Leung Shun Sang, Tony Tse Chun Sing Chan Wah Tip, Michael Liu Wei Choy Hok Man, Constance*

Registered office: Units 4-9 & 15-18 10th Floor, Honour Industrial Centre 6 Sun Yip Street Chai Wan Hong Kong

* Independent Non-executive Director

16 October 2002

To the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION

INTRODUCTION

The Board announced that on 25 September 2002, Printronics had entered into the Agreement with Jinling which is a substantial shareholder of, and which is interested in 39.8% of the registered capital of Shanghai Printronics, a subsidiary of the Company. Jinling is a connected person of the Company under the Listing Rules. Pursuant to the Agreement, Printronics agreed to sell to Jinling its entire equity interest in Shanghai Printronics, representing 60.2% of the registered capital of Shanghai Printronics, subject to fulfilment of certain conditions set out below.

THE AGREEMENT

Date of the Agreement : 25 September 2002 Parties : Printronics (as vendor) and Jinling (as purchaser) Investment to be sold : Printronics’ entire equity interest in Shanghai Printronics, representing 60.2% of the registered capital of Shanghai Printronics

– 4 –

LETTER FROM THE BOARD

Consideration

• : RMB48 million (equivalent to approximately HK$45.2 million) will be paid in cash in the following manner:–

• (i) an amount of RMB8 million (equivalent to approximately HK$7.5 million) will be received by Printronics on the tenth day following the date on which all conditions precedent as set out below have been fulfilled; and

• (ii) the balance of an amount of RMB40 million (equivalent to approximately HK$37.7 million) will be paid to Printronics on or before September 2003.

Conditions precedent : Completion of the Agreement is conditional upon, amongst others:

• (a) the approval by the board of directors of Shanghai Printronics of the Disposal as contemplated under the Agreement in accordance with the articles of association of Shanghai Printronics;

• (b) the approval by the relevant PRC authorities of the Disposal as contemplated under the Agreement; and

• (c) the approval of the Agreement and the transactions contemplated thereunder by the Independent Shareholders at the Extraordinary General Meeting.

REASONS FOR THE DISPOSAL

Shanghai Printronics is a Sino-foreign co-operative joint venture established in the PRC engaged principally in the manufacture and sale of printed circuit boards. The Company, through Printronics, has been holding the equity interest in Shanghai Printronics for investment purpose since 1986. However, following the set up of many large printed circuit board factories with monthly production capacity exceeding the annual output of Shanghai Printronics, in Shanghai and cities in the vicinity, Shanghai Printronics was under strong pressure in sustaining of its business and selling price. Turnover of Shanghai Printronics dropped in 2001 and a net loss before and after tax and extraordinary items in the amount of approximately RMB749,000 (equivalent to approximately HK$706,000) and approximately RMB864,000 (equivalent to approximately HK$814,000) respectively for the year ended 31 December 2001 was recorded.

– 5 –

LETTER FROM THE BOARD

As Shanghai Printronics has been loss-making under fierce competition, the Directors have been seeking opportunities to streamline its businesses and to divest the Group’s non-performing asset.

The Agreement was reached between Jinling and Printronics after arm’s length negotiation. The Directors consider that the terms of the Agreement are on normal commercial terms which are fair and reasonable so far as the Independent Shareholders are concerned.

The proceeds from the Disposal would increase the Company’s liquidity and enable the Company to engage in new investment projects in the future when opportunities arise in accordance with the Company’s investment objectives, as well as for general working capital and the proceeds not yet deployed for the aforesaid uses will be placed on interest bearing deposit. As at the Latest Practicable Date, the Company has not entered into any agreements in relation to future investment projects, nor has the Company made any final decisions on any future investment projects.

EFFECT OF THE DISPOSAL

Based on the unaudited accounts of Shanghai Printronics, Shanghai Printronics recorded a net profit before and after tax and extraordinary items in the amount of approximately RMB14,646,000 (equivalent to approximately HK$13,436,000) and approximately RMB12,449,000 (equivalent to approximately HK$11,421,000) respectively for the year ended 31 December 2000 and a net loss before and after tax and extraordinary items in the amount of approximately RMB749,000 (equivalent to approximately HK$706,000) and approximately RMB864,000 (equivalent to approximately HK$814,000) respectively for the year ended 31 December 2001. The net assets of Shanghai Printronics as at 31 December 2000 and 2001 were approximately RMB82,291,000 (equivalent to approximately HK$75,494,000) and approximately RMB71,466,000 (equivalent to approximately HK$67,335,000) respectively. The estimated gain arising from the Disposal would be approximately HK$5,608,000 before the deduction of the related expenses, based on the unaudited net asset value of Shanghai Printronics as at 30 June 2002.

The Directors consider that the Disposal will also strengthen the cash position of the Group.

CONNECTED PERSON

Jinling is a substantial shareholder of, and is interested in 39.8% of the registered capital of Shanghai Printronics which is a subsidiary of the Company. Jinling is a connected person of the Company under the Listing Rules and the Disposal constitutes a connected transaction of the Company under Rule 14.26 of the Listing Rules and is subject to approval by the Independent Shareholders.

– 6 –

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

There is set out on pages 22 and 23 of this circular a notice convening the Extraordinary General Meeting to be held at Concord Rooms II & III, 8/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 8 November 2002 at 10:30 a.m. at which an ordinary resolution will be proposed to consider and, if thought fit, to be passed by the Independent Shareholders to approve the Agreement. According to the Listing Rules, Jinling and its associates will abstain from voting at the Extraordinary General Meeting.

RECOMMENDATION

The Board has appointed Mr. Chan Wah Tip, Michael and Mr. Liu Wei, who are independent non-executive Directors, to constitute the Independent Board Committee to consider the Agreement. In view that Ms. Choy Hok Man, Constance, one of the independent non-executive Directors, is a partner of Sidley Austin Brown & Wood which has been appointed by the Company as its legal advisers in relation to the Disposal, Ms. Choy Hok Man, Constance does not constitute a member of the Independent Board Committee. Shenyin Wanguo Capital has been appointed as the independent financial adviser to advise the Independent Board Committee. The Independent Board Committee, having taken into account the advice of Shenyin Wanguo Capital, considers that the terms of the Agreement are fair and reasonable so far as the Independent Shareholders as a whole are concerned and that they are in the interests of the Company and the Shareholders as a whole. Your attention is also drawn to the letter from Shenyin Wanguo Capital to the Independent Board Committee set out on pages 10 to 15 of this circular as regards the Agreement, and the principal factors and reasons considered in arriving at its advice.

ADDITIONAL INFORMATION

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

By Order of the Board Shougang Concord Technology Holdings Limited Yu Jian President

– 7 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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���������� SHOUGANG CONCORD TECHNOLOGY HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

Directors: Cao Zhong (Chairman) Yu Jian (President) Xu Xianghua Leung Shun Sang, Tony Tse Chun Sing Chan Wah Tip, Michael Liu Wei Choy Hok Man, Constance*

Registered office: Units 4-9 & 15-18 10th Floor, Honour Industrial Centre 6 Sun Yip Street Chai Wan Hong Kong

• Independent Non-executive Directors

16 October 2002

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION

We refer to the circular of Shougang Concord Technology Holdings Limited dated 16 October 2002 (“Circular”) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used in this letter unless the context otherwise requires.

We are independent non-executive Directors and have been appointed as the members of the Independent Board Committee by the Board to advise you as to whether, in our opinion, the terms of the Agreement are fair and reasonable so far as the Independent Shareholders as a whole are concerned.

The Independent Board Committee has appointed Shenyin Wanguo Capital to advise it on the Agreement. The text of the letter from Shenyin Wanguo Capital containing its advice, together with the principal factors and reasons taken into consideration in arriving at such advice, are set out on pages 10 to 15 of the Circular.

– 8 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the advice from Shenyin Wanguo Capital, we are of the view that the terms of the connected transaction in relation to the Agreement are fair and reasonable so far as the Independent Shareholders as a whole are concerned and that they are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution in respect of the Agreement to be proposed at the Extraordinary General Meeting.

Your attention is drawn to the letter from the Board set out on pages 4 to 7 of the Circular and the additional information set out in the appendix to the Circular.

Yours faithfully,

For and on behalf of

the Independent Board Committee Chan Wah Tip, Michael Liu Wei Independent non-executive Directors

– 9 –

LETTER FROM SHENYIN WANGUO CAPITAL

Set out below is a letter from Shenyin Wanguo Capital prepared for the purpose of inclusion into this circular.

SHENYIN WANGUO CAPITAL (H.K.) LIMITED

28th Floor Citibank Tower Citibank Plaza 3 Garden Road Central Hong Kong.

16 October 2002

The Independent Board Committee Shougang Concord Technology Holdings Limited Units 4-9 & 15-18 10th Floor, Honour Industrial Centre 6 Sun Yip Street Chai Wan Hong Kong

Dear Sirs,

CONNECTED TRANSACTION DISPOSAL OF 60.2% INTEREST IN SHANGHAI PRINTRONICS

INTRODUCTION

We refer to our engagement by the Company as independent financial adviser to advise the Independent Board Committee in respect of the terms of the Agreement, details of which are contained in the letter from the Board set out in the circular dated 16 October 2002 to the Shareholders (the “Circular”) of which this letter forms part. Terms used in this letter shall bear the same meanings as defined in the Circular unless the context otherwise requires. This letter contains our advice to the Independent Board Committee.

– 10 –

LETTER FROM SHENYIN WANGUO CAPITAL

On 25 September 2002, Printronics entered into the Agreement with Jinling which is a substantial shareholder, and which is interested in 39.8% of, the registered capital of Shanghai Printronics, a subsidiary of the Company. Jinling is therefore a connected person of the Company under the Listing Rules. The Disposal thus constitutes a connected transaction of the Company under Rule 14.26 of the Listing Rules and is subject to approval by the Independent Shareholders. In this connection, the Circular containing, inter alia, the information relating to the Disposal and the terms of the Agreement, the recommendation from the Independent Board Committee and this advice letter, is despatched to the Shareholders.

Our role as the independent financial adviser to the Independent Board Committee is to express our opinion on whether the Disposal is in the interests of the Group and the terms of the Agreement are fair and reasonable in so far as the Shareholders are concerned.

In formulating our recommendations, we have relied on the accuracy of the information and representations contained in the Circular, which have been provided by the Directors who have assumed that all information and representations made or referred to in the Circular were true and correct in all respects at the time when they were made and continued to be true and correct in all respects as at the date of despatch of the Circular. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular are reasonably made after due and careful enquiry and based on honestly held opinion. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and have been advised by the Directors that no material facts have been omitted from the information and representations provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify our reliance on the accuracy of the information and representations contained in the Circular and to provide a reasonable basis for our advice. We have not, however, carried out any independent verification of the information provided by the Directors, nor have we conducted an independent in-depth investigation into the business and affairs or the future prospects of the Group.

THE DISPOSAL

Pursuant to the Agreement, Printronics has conditionally agreed to dispose of its entire equity interest in Shanghai Printronics, representing 60.2% of the registered capital of Shanghai Printronics to Jinling for a cash consideration of RMB48 million (equivalent to approximately HK$45.2 million) (“Consideration”). As at the Latest Practicable Date, Shanghai Printronics was owned as to 60.2% by Printronics and as to 39.8% by Jinling. Following completion of the Disposal, Shanghai Printronics will be wholly owned by Jinling.

Based on the unaudited accounts of Shanghai Printronics, Shanghai Printronics recorded a net profit before and after tax and extraordinary items in the amount of approximately RMB14,646,000 (equivalent to approximately HK$13,436,000) and approximately RMB12,449,000 (equivalent to

– 11 –

LETTER FROM SHENYIN WANGUO CAPITAL

approximately HK$11,421,000) respectively for the year ended 31 December 2000 and a net loss before and after tax and extraordinary items in the amount of approximately RMB749,000 (equivalent to approximately HK$706,000) and approximately RMB864,000 (equivalent to approximately HK$814,000) respectively for the year ended 31 December 2001. The net assets of Shanghai Printronics as at 31 December 2000 and 2001 were approximately RMB82,291,000 (equivalent to approximately HK$75,494,000) and approximately RMB71,466,000 (equivalent to approximately HK$67,335,000) respectively.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our advice, we have taken into account the following principal factors and reasons.

Background of and Reasons for the Disposal

The Company is an investment holding company and its principal subsidiaries are engaged in the manufacture and sale of a wide range of electronics components and products including telephone accessories and power cords, adapters and electronic products, printed circuit boards, high precision metal components and copper wire. In recent years, the Group has consistently restructured its business assets and product mix in order to enhance the quality of its investment portfolio and its overall financial performance.

Shanghai Printronics is a Sino-foreign co-operative joint venture established in the PRC which is engaged principally in the manufacture and sale of printed circuit boards. The Group has been holding its equity interest in Shanghai Printronics for investment purposes since 1986. However, the operating environment for the business of Shanghai Printronics become difficult recently due to fierce competition from many large printed circuit board manufacturers in Shanghai and cities in the vicinity. As a result, there were signs that its market share was shrinking and the selling price of its products under pressures, its turnover dropped by more than 20% in 2001 when comparing to previous years and recorded net loss before tax and extraordinary items of approximately RMB749,000 (equivalent to approximately HK$706,000) for the year ended 31 December 2001 comparing to a net profit before tax and extraordinary items of approximately RMB14.6 million for the financial year ended 31 December 2000. As disclosed in the 2001 annual report, the Directors have been seeking opportunities to streamline its businesses and to divest the Group’s non-performing asset.

We consider that the Disposal is consistent with the Group’s business development strategy of streamlining its business operations by divesting its non-performing assets and would enhance the overall financial performance of the Group.

– 12 –

LETTER FROM SHENYIN WANGUO CAPITAL

Consideration

The Directors confirm that the terms of the Agreement are on normal commercial terms and the Consideration has been arrived at after arm’s length negotiations between Jinling and Printronics with reference to the net asset value of Shanghai Printronics which amounted to RMB71,466,000 (equivalent to approximately HK$67,335,000) as at 31 December 2001. As Shanghai Printronics has been loss-making, we consider that the adoption of net asset value as a valuation method is appropriate.

We noted that the Consideration represents a premium of approximately 11.6% to the amount of approximately RMB43,023,000 (equivalent to approximately HK$40,536,000) representing 60.2% of the unaudited net asset value of Shanghai Printronics as at 31 December 2001. We have further compared the Consideration against the amount of approximately RMB41,660,000 (equivalent to approximately HK$39,252,000), representing 60.2% of the unaudited net asset value of Shanghai Printronics as at 30 June 2002 and noted that the Consideration represents a premium of approximately 15.2%.

In assessing the fairness and reasonableness of the Consideration, we have also made reference to the relationship between the share prices and the net asset values of six Hong Kong listed companies (the “Market Comparables”) which are principally engaged in the business of manufacturing and sale of printed circuit boards and related products.

The following table sets out such relationships:

	Premium/(Discount) of share
Company Names	price to net asset value
Elec & Eltek International Holdings Limited (33)	37.2%
Fu Cheong International Holdings Limited (916)	22.4%
QPL International Holdings Ltd (243)	3.3%
Same Time Holdings Limited (451)	(57.2)%
Suwa International Holdings Limited (567)	(24.8)%
Zida Computer Technologies Ltd (859)	42.9%

( Note: The calculation of the percentage was based on the latest published annual accounts of the relevant companies and the closing price per share as at 25 September 2002, being the date of the Agreement.)

As at 25 September 2002, being the date of the Agreement, the shares of the Market Comparables traded with a range at a premium to the net asset value of 42.9% to a discount to the net asset value of 57.2%. In view of the foregoing and after taking into account that Shanghai

– 13 –

LETTER FROM SHENYIN WANGUO CAPITAL

Printronics is a private company with no open market for transfer of its shareholding interest, we are of the view that the Consideration is fair and reasonable in so far as the Independent Shareholders are concerned.

Financial Effects

1. Profitability

The Directors estimate that the Disposal will generate a gain of approximately HK$5.6 million before deduction of related expenses for the Group, based on the unaudited net asset value of Shanghai Printronics as at 30 June 2002. On the other hand, the share of net losses of Shanghai Printronics for the year ended 31 December 2001 was RMB560,000 (equivalent to approximately HK$527,000) whereas the consolidated net loss of the Group for the same period amounted to approximately HK$62,707,000.

As Shanghai Printronics has been loss-making, we consider that the Disposal would not have any adverse impact on the Group’s overall future results and we further concur with the Directors’ view that the Disposal would therefore improve the overall financial performance of the Group.

2. Net Tangible Assets Value

As at 31 December 2001, the unaudited net asset value of Shanghai Printronics was approximately RMB71,466,000 (equivalent to approximately HK$67,335,000), representing approximately 12.8% of the Group’s consolidated net tangible asset value. The Group’s share of net asset value of Shanghai Printronics amounted to approximately RMB43,782,000 (equivalent to approximately HK$41,251,000) as at 31 December 2001, taken into account of the profit sharing ratio. Assuming the Disposal was completed as at 1 January 2001, the pro forma net tangible asset value of the Group as at 31 December 2001 would be increased by approximately HK$3,975,000 as a result of the Disposal, after deducting the Consideration by the Group’s share of net asset value of Shanghai Printronics.

3. Cash Flow Position

We have been advised by the Directors that they intend to apply the proceeds of the Disposal for general working capital purposes. As such, the Disposal will provide an additional cash inflow of approximately RMB48 million (equivalent to approximately HK$45.2 million) to the Group before related expenses.

– 14 –

LETTER FROM SHENYIN WANGUO CAPITAL

4. Gearing Ratio

As at 31 December 2001, the date of latest published audited accounts of the Group, the gearing ratio (defined as total bank debts divided by shareholders’ equity) of the Group was approximately 9%. The Directors confirmed that there will be no material effect on the gearing ratio of the Group as a result of the Disposal as mentioned above.

RECOMMENDATION

Having considered the principal factors and reasons as mentioned above, we are of the opinion that the Disposal is in the interests of the Company and the terms of the Agreement are fair and reasonable in so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the Extraordinary General Meeting in respect of the Disposal.

Yours faithfully, For and on behalf of

Shenyin Wanguo Capital (H.K.) Limited

Simon Lee

Director, Head of Corporate Finance

– 15 –

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 Group. 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 INTERESTS

As at the Latest Practicable Date, none of the Directors was interested in the equity or debt securities of the Company or any of its associated corporations (within the meaning of the SDI Ordinance) which were required to be notified to the Company and the Stock Exchange pursuant to Section 28 of the SDI Ordinance (including interests which such Directors would be deemed or taken to have under Section 31 of, or Part I of the Schedule to, the SDI Ordinance) or which were required, pursuant to Section 29 of the SDI Ordinance, to be entered in the register referred to therein or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, to be notified to the Company and the Stock Exchange.

As at the Latest Practicable Date, none of the Directors has any direct or indirect interest in any assets which have been, since 31 December 2001 (being the date to which the latest published audited consolidated financial statements of the Company were made up), acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors are materially interested in any contract or arrangement which is significant in relation to the business of the Group.

– 16 –

GENERAL INFORMATION

APPENDIX

3. SUBSTANTIAL SHAREHOLDERS

• (i) As at the Latest Practicable Date, the following persons or companies (other than the Directors) were directly or indirectly interested in 10% or more of the issued share capital of the Company according to the register kept by the Company pursuant to Section 16(1) of the SDI Ordinance and so far as is known to the Directors:

		Number of	% of the total
Name	Notes	shares held	shareholding
Shougang Holding (Hong Kong)	1	371,649,069	46.30%
Limited (“Shougang HK”)
Shougang Concord Grand (Group)	1	371,649,069	46.30%
Limited (“Shougang Grand”)
SCG Investment (B.V.I.) Limited	2	371,649,069	46.30%
(“SCGI”)
Grand Phoenix Limited	3	371,649,069	46.30%
(“Grand Phoenix”)
Upper Nice Assets Ltd.	3	240,342,569	29.94%
(“Upper Nice”)
Jeckman Holdings Limited	3	131,306,500	16.36%
(“Jeckman”)

Notes:

1. Shougang HK was the holding company of Shougang Grand and the interests held by Shougang Grand were included in the interests held by Shougang HK. Shougang Grand was deemed to be interested in the shares held by SCGI by virtue of its 100% shareholding in SCGI.

2. SCGI was a wholly-owned subsidiary of Shougang Grand and its interests were included in the interests held by Shougang Grand. SCGI was deemed to be interested in the shares held by Grand Phoenix by virtue of its 100% shareholding in Grand Phoenix.

3. Grand Phoenix was a wholly-owned subsidiary of SCGI and its interests were included in the interests held by SCGI. Grand Phoenix was deemed to be interested in the shares held by Upper Nice and Jeckman by virtue of its 100% shareholding in Upper Nice and Jeckman.

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GENERAL INFORMATION

APPENDIX

Save as disclosed herein, the Directors are not aware of any other person who was, as at the Latest Practicable Date, directly or indirectly, interested in 10% or more of the issued share capital of the Company.

• (ii) As at the Latest Practicable Date and so far as is known to the Directors, the following persons and companies (other than the Directors) 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 any members of the Group:

				Approximate
	Name of	Name of		percentage of
Name of member	registered	beneficial	Number and	attributable
of the Group	owner	owner	class of shares	interest
Dorup Limited,	Lam Chun	Lam Chun	400,000 ordinary	20%
a 60% indirectly			shares
owned subsidiary
of the Company
Dorup Limited,	Chun Yat	Lam Chun	400,000 ordinary	20%
a 60% indirectly	Industrial		shares
owned subsidiary	Limited
of the Company
Dongguan	Dorup Limited	Lam Chun	(Note 1)	40%
Dongjiang Wire
& Cable Co., Ltd.,
a 60% indirectly
owned subsidiary
of the Company
Grow Concept	Yourkey (H.K.)	Chiu Sen Sung	4,000 ordinary	40%
Industrial Limited,	Limited		shares
a 60% indirectly
owned subsidiary
of the Company
Ready Sound Limited,	Ko Soen Chyi	Ko Soen Chyi	200,000 ordinary	20%
a 60% indirectly			shares
owned subsidiary
of the Company

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APPENDIX

GENERAL INFORMATION

				Approximate
	Name of	Name of		percentage of
Name of member	registered	beneficial	Number and	attributable
of the Group	owner	owner	class of shares	interest
Ready Sound Limited,	Ko Chang Shu	Ko Chang Shu	200,000 ordinary	20%
a 60% indirectly	Chin	Chin	shares
owned subsidiary
of the Company
Upland Limited,	Dorup Limited	Lam Chun	(Note 2)	40%
a 60% indirectly
owned subsidiary
of the Company
Shanghai Printronics,	Jinling	Jinling	share capital	39.8%
a 60.2% indirectly			US$3,759,600
owned subsidiary
of the Company
(Note 3)

Notes:

1. Dongguan Dongjiang Wire & Cable Co., Ltd. had share capital of HK$6,000,000 which was held as to 100% by Dorup Limited. As Dorup Limited was beneficially held as to 40% by Lam Chun, Dongguan Dongjiang Wire & Cable Co., Ltd. was deemed to be held as to 40% by Lam Chun.

2. Upland Limited had share capital of US$1 which was held as to 100% by Dorup Limited. As Dorup Limited was beneficially held as to 40% by Lam Chun, Upland Limited was deemed to be held as to 40% by Lam Chun.

3. Since the Group did not control the composition of the board or the voting power of Shanghai Printronics. Shanghai Printronics had been accounted for as a jointly controlled entity in the Group’s 2001 financial statements.

Save as disclosed herein, the Directors are not aware of any other persons (other than the Directors) who, as at the Latest Practicable Date, 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 any member of the Group or in any options in respect of such capital.

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GENERAL INFORMATION

APPENDIX

4. LITIGATION

No member of the Group is engaged in any litigation or claim of material importance that would have a material adverse impact on the financial position of the Group and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

5. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2001, the date to which the latest published audited consolidated accounts of the Group were made up.

6. SERVICE CONTRACTS

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

7. EXPERT

Shenyin Wanguo Capital, an investment adviser and a securities dealer in Hong Kong registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong), has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which it appears.

Shenyin Wanguo Capital is not beneficially interested in the share capital of any member of the Group nor has any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group. Shenyin Wanguo Capital does not have any direct or indirect interest in any assets which have been, since 31 December 2001 (being the date to which the latest published audited accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or which are proposed to be acquired or disposed of by or leased to any member of the Group.

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GENERAL INFORMATION

APPENDIX

8. MISCELLANEOUS

• (a) The secretary of the Company is Ms. Cheng Man Ching, a fellow member of each of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries and holding a master degree in business administration.

• (b) The share registrars of the Company is Tengis Limited, 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong.

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

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s registered office at Units 4-9 & 15-18, 10th Floor, Honour Industrial Centre, 6 Sun Yip Street, Chai Wan, Hong Kong during normal business hours on any weekday (Saturday and public holidays excepted) up to and including 8 November 2002:

• (a) the Agreement;

• (b) the letter from the Independent Board Committee to the Independent Shareholders, the text of which is set out on pages 8 and 9 of this circular;

• (c) the letter from Shenyin Wanguo Capital to the Independent Board Committee, the text of which is set out on pages 10 to 15 of this circular; and

• (d) the consent letter issued by Shenyin Wanguo Capital as referred to in the paragraph headed “Expert” in this appendix.

– 21 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [44 x 48] intentionally omitted <==

���������� SHOUGANG CONCORD TECHNOLOGY HOLDINGS LIMITED

(Incorporated in Hong Kong with limited liability)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Shougang Concord Technology Holdings Limited (“ Company ”) will be held at Concord Rooms II & III, 8/F., Renaissance Harbour View Hotel Hong Kong, 1 Harbour Road, Wanchai, Hong Kong on 8 November 2002 at 10:30 a.m. for the purpose of considering and, if thought fit, passing, with or without modification, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“THAT

• (1) the agreement dated 25 September 2002 (the “ Agreement ”) entered into between Printronics China Limited and ���������� (Shanghai Jinling Holdings Company Limited) in respect of the disposal by Printronics China Limited of its entire interest in ��������� (Shanghai Printronics Circuit Corporation), a copy of which has been produced to the meeting and marked “A” and initialled by the chairman of the meeting for identification purpose, be and is hereby approved, confirmed and ratified; and

• (2) the directors of the Company be and are hereby authorised to take all steps necessary or expedient to implement and/or give effect to the Agreement.”

By order of the Board of

Shougang Concord Technology Holdings Limited Yu Jian President

Hong Kong, 16 October 2002

Registered office:

Units 4-9 & 15-18 10th Floor, Honour Industrial Centre 6 Sun Yip Street Chai Wan Hong Kong

– 22 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. A shareholder entitled to attend and vote at the above meeting may appoint one or more than one proxies to attend and to vote in his/her stead. A proxy need not be a shareholder of the Company.

2. Where there are joint registered holders of any share, any one such persons may vote at the meeting, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

3. In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed thereon together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof must be delivered to the office of the share registrars of the Company, Tengis Limited, at 4th Floor, Hutchison House, 10 Harcourt Road, Central, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof.

– 23 –