Vision Values Holdings Ltd. — Share Issue/Capital Change 2002

Mar 22, 2002

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

Asia Logistics Technologies Limited

亞洲物流科技有限公司*

(Incorporated in the Cayman Islands with limited liability)

DISCLOSEABLE AND CONNECTED TRANSACTION

AND

SUBSCRIPTION OF NEW SHARES

The Directors wish to announce that the Han Subscription Agreement has been entered into on 21st March, 2002 between, inter alia, the Company and Legend pursuant to which Legend has agreed to subscribe (or procure its nominee to subscribe) for 2,550 new shares in Han International which will represent 51% of its entire issued share capital immediately after Completion at a consideration of HK$55 million.

The consideration for the Han Subscription will be satisfied as to HK$35 million by cash payable upon Completion and as to HK$20 million by issuance and delivery by Legend to Han International of an interest-free promissory note. The amount owing under the promissory note is payable within five business days of the second anniversary of the date of Completion after setting-off any claims by Legend under the indemnity contained in the Han Subscription Agreement.

The Company has also entered into the ALT Subscription Agreement on 21st March, 2002 with Grade Win, pursuant to which Grade Win has agreed to subscribe for 159,121,700 new ALT Shares representing approximately 5% of the Company's existing issued share capital and approximately 4.8% of the Company's issued share capital as enlarged by the issue of such new ALT Subscription Shares. The ALT Subscription Shares will be allotted and issued, subject to the approval of the ALT Shareholders at the Extraordinary General Meeting, under a specific mandate to be granted to the Directors. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the ALT Subscription Shares.

The Han Subscription constitutes a discloseable and connected transaction for the Company under Chapter 14 of the Listing Rules. A circular containing, amongst other things, a notice convening the Extraordinary General Meeting and further details relating to the Han Subscription and the ALT Subscription and a letter from an independent financial adviser to be appointed to advise the Independent Board Committee on the Han Subscription will be despatched to the ALT Shareholders as soon as practicable.

Trading in ALT Shares was suspended with effect from 10:00 a.m. on 21st March, 2002 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in ALT Shares with effect from 10:00 a.m. on 22nd March, 2002.

THE HAN SUBSCRIPTION AGREEMENT DATED 21ST MARCH, 2002

Parties to the agreement

Subscriber: Legend (or its nominee)

Issuer: Han International, an indirectly non wholly-owned subsidiary of the Company currently owned as to approximately 57.0% by Vision On-line, as to approximately 34.4% by Starling, and as to approximately 8.6% by UF

Warrantors: Vision On-line, Starling and UF each of whom has agreed to give certain representations, undertakings, warranties and indemnities upon the terms and subject to the conditions of the Han Subscription Agreement

Guarantors: the Company, Dr. Zhang and Beijing UFsoft each of whom has agreed to guarantee the due and punctual performance of each obligation of Vision On-line, Starling and UF respectively (as the case may be) upon the terms and subject to the conditions of the Han Subscription Agreement

Other than Dr. Zhang who is a director and the substantial shareholder (through Starling) of Han International, each of Legend, UF and Beijing UFsoft is independent of and not connected with the Directors, chief executive and substantial shareholder of the Company and its subsidiaries or any of their respective associates.

Number of shares in Han International to be subscribed

Han International has agreed to allot and issue and Legend has agreed to subscribe (or procure its nominee to subscribe) for 2,550 new shares in Han International which will represent 51% of its entire issued share capital immediately after Completion.

Vision On-line is currently holding a convertible note issued by Han International on 21st January, 2002 for the principal amount of HK$9,260,000 entitling Vision On-line to convert into 141 new shares in Han International. Pursuant to the Han Subscription Agreement, the Company shall have to exercise in full the rights attaching to such convertible note before Completion. In addition, Han International will allot and issue an aggregate of additional 1,168 new shares in Han International at par to its existing shareholders, Vision On-line, Starling and UF, before Completion pursuant to the Han Subscription Agreement.

The shareholding structure of Han International immediately before and after Completion are summarised as follows:

Current Shareholding of Shareholding of

shareholding Han International Han International

of Han immediately immediately

International before Completion after Completion

No. of shares % No. of shares % No. of shares %

Vision On-line 651 57.0 1,500 61.2 1,500 30.0

Starling 392 34.4 750 30.6 750 15.0

UF 98 8.6 200 8.2 200 4.0

Legend (or its nominee) - - - - 2,550 51.0

Total 1,141 100.0 2,450 100.0 5,000 100.0

Consideration for the Han Subscription

The consideration for the Han Subscription of a total of HK$55 million will be satisfied as to HK$35 million by cash payable upon Completion and as to HK$20 million by issuance and delivery by Legend to Han International of an interest-free promissory note. The amount owing under the promissory note is payable within 5 business days of the second anniversary of the date of Completion after setting-off any claims by Legend under the indemnity contained in the Han Subscription Agreement.

The consideration for the Han Subscription was arrived at after arm's length negotiations between the existing shareholders of Han International and Legend taking into account the underlying businesses and future prospects of Han International Group and possible benefits from the synergy of business between Han International Group and Legend.

Pursuant to the Han Subscription Agreement, Legend has agreed to (or procure its relevant subsidiary(ies) to) novate, subject to Completion, certain business contracts with an aggregate outstanding contract value of approximately RMB2,605,000 (equivalent to approximately HK$2,434,579) and transfer certain fixed assets (comprising mainly computers and other equipment) with a net book value of approximately RMB891,825 (equivalent to approximately HK$833,481) to Han International. The Directors consider that the Han Subscription Agreement was entered into on normal commercial terms which are fair and reasonable and are for the interest of the Independent ALT Shareholders and the Company as a whole.

Conditions and completion of the Han Subscription

Completion is conditional upon fulfilment of, amongst other things, the following conditions on or before 2nd July, 2002 (or such later date as may be agreed in writing by the parties to the Han Subscription Agreement):

1. the approval of the Independent ALT Shareholders at the Extraordinary General Meeting of the transactions in connection with the entering into and performance of the terms of the Han Subscription Agreement in accordance with the Listing Rules;
2. Legend (in its absolute discretion) having satisfactorily completed due diligence on the Han International Group and all matters or issues raised by Legend having been resolved to Legend's satisfaction; and
3. the ALT Subscription Agreement having become unconditional in all respects.

If any of the conditions as specified in the Han Subscription Agreement has not been fulfilled (or waived subject to the terms contained therein) on or before 2nd July, 2002 (or such later date as may be agreed in writing by the parties to the Han Subscription Agreement), the Han Subscription Agreement shall automatically terminate and the rights and obligations of the parties thereto shall cease and be of no further effect.

Completion shall take place on the date which is the third business day after the date on which all of the conditions to the Han Subscription Agreement are satisfied or waived or on such other date as the parties thereof may agree in accordance with the terms contained therein. The Han Subscription Agreement and the ALT Subscription Agreement will complete simultaneously.

THE ALT SUBSCRIPTION AGREEMENT DATED 21ST MARCH, 2002

Parties to the agreement

Subscriber: Grade Win, a wholly-owned subsidiary of Legend

Issuer: the Company

Number of ALT Subscription Shares

159,121,700 new ALT Shares representing approximately 5% of the existing issued share capital of the Company and approximately 4.8% of the issued share capital of the Company as enlarged by the issue of such new ALT Subscription Shares.

The ALT Subscription Shares will rank pari passu in all respects with the ALT Shares in issue as at the date of the completion of the ALT Subscription.

The ALT Subscription Shares will be allotted and issued, subject to the approval of the ALT Shareholders at the Extraordinary General Meeting, under a specific mandate to be granted to the Directors.

Subscription price

1. HK$0.15 per ALT Subscription Share in the event that the average closing price of the ALT Shares as quoted on the Stock Exchange for the five consecutive trading days immediately preceding the completion date of the ALT Subscription (the "Average Closing Price") is equal to or higher than HK$0.125; or
2. 1.2 times of the Average Closing Price in the event that the Average Closing Price is lower than HK$0.125.

The subscription price of HK$0.15 per ALT Subscription Share represents (i) a premium of approximately 11.1% to the closing price of HK$0.135 per ALT Share as quoted on the Stock Exchange on 20th March, 2002, being the last trading day of ALT Shares prior to the suspension of ALT Shares pending the release of this announcement; and (ii) a premium of approximately 7.9% to the average closing price of approximately HK$0.139 per ALT Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including 20th March, 2002.

The subscription price for the ALT Subscription Shares was arrived at after arm's length negotiations between the Company and Legend. The Directors consider that the ALT Subscription is in the interest of the Company and the ALT Shareholders as a whole. The subscription price for the ALT Subscription Shares will be satisfied in cash payable upon completion of the ALT Subscription Agreement.

Conditions and completion of the ALT Subscription

Completion of the ALT Subscription is conditional upon fulfilment of, amongst other things, the following conditions on or before 2nd July, 2002 (or such later date as may be agreed by the Company and Grade Win in writing):

1. the passing by the ALT Shareholders at the Extraordinary General Meeting of an ordinary resolution for the purpose of the granting of a specific mandate to the Directors for the allotment and issue of the ALT Subscription Shares to Grade Win in accordance with the terms of the ALT Subscription Agreement;
2. the listing of, and permission to deal in, all the ALT Subscription Shares being granted by the Listing Committee of the Stock Exchange (and such permission and listing not subsequently being revoked prior to the delivery of definitive share certificate(s) representing the ALT Subscription Shares);
3. the Han Subscription having become unconditional in all respects; and
4. all necessary consents having been obtained by the Company in connection with the allotment and issue of the ALT Subscription Shares.

If any of the conditions as specified in the ALT Subscription Agreement has not been fulfilled (or waived by Grade Win subject to the terms contained therein) on or before 2nd July, 2002 (or such later date as may be agreed by the Company and Grade Win in writing), the ALT Subscription Agreement shall automatically terminate and the rights and obligations of the parties thereto shall cease and be of no further effect.

Completion of the ALT Subscription shall take place on the date which is the third business day after the date on which all of the conditions to the ALT Subscription Agreement are satisfied or waived or on such other date as the parties thereof may agree in accordance with the terms contained therein. The ALT Subscription Agreement and the Han Subscription Agreement will complete simultaneously.

INFORMATION ON THE GROUP AND REASONS FOR THE HAN SUBSCRIPTION AND THE ALT SUBSCRIPTION

Information on the Group

Being positioned itself as a logistics technologies enabler, the Group specializes in Logistics and Supply Chain Management technologies. The principal activities of the Group are the provision of services in research and development, consultancy, implementation and turnkey solutions in relation to Enterprises Resources Planning (ERP), eSupply Chain Management (eSCM), eLogistics Management, as well as the Logistics Value-added Application Service Platform (VASP) in the Greater China market.

Information on Han International Group

The Han International Group is principally engaged in the business of management and information technology consultancy services and sale of software management solutions in the PRC.

With reference to the management accounts of Han International Group, the unaudited consolidated net profit after tax of Han International Group for the period from 15th November, 2000 (being the date of incorporation) to 31st December, 2001 was approximately HK$3,640,353. The unaudited consolidated net tangible asset value of Han International Group as at 31st December, 2001 was approximately HK$21,799,048.

Reasons for the Han Subscription and use of proceeds

The Han subscription is believed to generate business synergies and to foster a close working relationship for the Company, Han International Group and Legend. Through the Han Subscription, Han International Group not only obtains additional working capital to finance its further development and expansion, but also consolidates its iConsulting business with that of Legend with an aim to become the largest management and information technology consulting firm in the PRC. Moreover, Han International Group will be able to capture Legend's significant establishment and strong market presence in the PRC so as to widen its existing client base and to strengthen its competitive edge. Apart from its existing business in consultancy and implementation of Enterprise Resources Planning (ERP) systems, Han International Group will also expand into the arena of eSupply Chain Management (eSCM) providing Business Process Reengineering (BPR), consultancy and implementation services. Legend will be able to leverage on Han International Group's existing iConsulting and implementation experience and methodologies to provide comprehensive consulting services in the PRC market.

Through the continuous business development and growth of Han International Group, the Directors believe that the Company will be able to enhance its return on investment in Han International.

The net proceeds of approximately HK$55 million arising from the Han Subscription will be used to expand the management and information technology consultancy services in the PRC as well as to develop new business in the arena of eSCM.

Reasons for the ALT Subscription and use of proceeds

Apart from obtaining additional financial resources, the ALT Subscription aims at enhancing a closer relationship between the Company and Legend following the Han Subscription. The Company will be able to leverage on Legend's existing infrastructure and client base to enlarge its market coverage. Also, by sharing the same visions and insights in the businesses of iConsulting, Supply Chain Management and Logistics solutions, the Company and Legend will both obtain mutual-benefit in long term.

The net proceeds of approximately HK$23 million (assuming the subscription price of HK$0.15 per ALT Subscription Share) arising from the ALT Subscription will be used as general working capital of the Group.

GENERAL

The Han Subscription results in a deemed disposal by the Company of its interest in Han International. Since Han International will cease to be a subsidiary of the Company, 100% of the consolidated net profit and consolidated net tangible assets of Han International Group will be taken as the basis for the size test in accordance with the Listing Rules. Accordingly, the Han Subscription will constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules. Given that Dr. Zhang is a director and the substantial shareholder (through Starling) of Han International, the Han Subscription also constitutes a connected transaction for the Company under Rule 14.23(1)(b) of the Listing Rules and will be subject to the approval of the Independent ALT Shareholders at the Extraordinary General Meeting.

An Independent Board Committee will be formed to advise the Independent ALT Shareholders in respect of the Han Subscription.

The ALT Subscription Shares will be allotted and issued, subject to the approval of the ALT Shareholders at the Extraordinary General Meeting, under a specific mandate to be granted to the Directors. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the ALT Subscription Shares.

A circular containing, amongst other things, a notice convening the Extraordinary General Meeting and further details relating to, amongst other things, the Han Subscription and the ALT Subscription and a letter from an independent financial adviser to be appointed to advise the Independent Board Committee on the Han Subscription will be despatched to the ALT Shareholders as soon as practicable.

Trading in ALT Shares was suspended with effect from 10:00 a.m. on 21st March, 2002 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in ALT Shares with effect from 10:00 a.m. on 22nd March, 2002.

DEFINITIONS

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

"ALT Share(s)" share(s) of HK$0.01 each in the issued share capital of the Company

"ALT Shareholder(s)" holder(s) of the ALT Shares

"ALT Subscription" the subscription of 159,121,700 new ALT Shares representing approximately 5% of the existing issued share capital of the Company by Grade Win pursuant to the ALT Subscription Agreement

"ALT Subscription the conditional subscription agreement dated 21st

Agreement" March, 2002 entered into between the Company and Grade Win in relation to the subscription of the ALT Subscription Shares

"ALT Subscription Shares" the new ALT Shares to be allotted and issued pursuant to the ALT Subscription

"associates" have the meaning ascribed to it under the Listing Rules

"Beijing UFsoft" 北京用友軟件股份有限公司, a company limited by shares established in the PRC and a 100% beneficially owner of UF

"Company" Asia Logistics Technologies Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Stock Exchange

"Completion" completion of the Han Subscription in accordance with the Han Subscription Agreement

"Director(s)" the director(s) of the Company

"Dr. Zhang" Dr. Zhang Hou Qi, a director of Han International

"Extraordinary an extraordinary general meeting of the Company

General Meeting" to be convened to approve, amongst other things, the Han Subscription and the granting of a specific mandate for the allotment and issue of the ALT Subscription Shares under the ALT Subscription, and any adjournment thereof

"Grade Win" Grade Win International Limited, a company incorporated in Hong Kong with limited liability and a wholly-owned subsidiary of Legend

"Group" the Company and its subsidiaries

"Han International" Han International Consulting Company Limited, a company incorporated in the British Virgin Islands and currently owned as to approximately 57.0% by Vision On-line, as to approximately 34.4% by Starling and as to approximately 8.6% by UF

"Han International Group" Han International and its subsidiaries

"Han Subscription" the subscription of 2,550 new shares in Han International which will represent 51% of its enlarged issued share capital at a consideration of HK$55 million pursuant to the Han Subscription Agreement

"Han Subscription the conditional subscription agreement dated 21st

Agreement" March, 2002 entered into between, inter alia, the Company, Han International and Legend in relation to the subscription of new shares in Han International

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"Independent ALT the ALT Shareholders other than Dr. Zhang and

Shareholders" his associates

"Independent Board the committee of the Directors comprising the

Committee" independent non-executive Directors which will be formed to advise the Independent ALT Shareholders in respect of the Han Subscription

"Legend" Legend Holdings Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange

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

"PRC" The People's Republic of China

"Starling" Starling Technology Limited, a company incorporated in the British Virgin Islands and is wholly owned by Dr. Zhang.

"Stock Exchange" The Stock Exchange of Hong Kong Limited

"UF" UF International Holdings Limited, a company incorporated in the British Virgin Islands and is beneficially wholly owned by Beijing UFsoft

"Vision On-line" Vision On-line Limited, a company incorporated in the British Virgin Islands and a wholly-owned subsidiary of the Company

"%" per cent.

"HK$" the lawful currency of Hong Kong

"RMB" Renminbi, the lawful currency of the PRC

For illustration purposes, amounts in RMB in this announcement have been translated into HK$ at HK$1 = RMB1.07,

By Order of the Board

Asia Logistics Technologies Limited

Lo Lin Shing, Simon

Chairman

Hong Kong, 21st March, 2002

* For identification only

"Please also refer to the published version of this announcement in the Hong Kong i-mail"