THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in SYSCAN Technology Holdings Limited (the “Company”), you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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.

This circular, for which the directors of the Company (the “Directors”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market (“GEM”) of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, (i) the information contained in this circular is accurate and complete in all material respects and not misleading; (ii) there are no other matters the omission of which would make any statement herein misleading; and (iii) all opinions expressed herein have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

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**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF 45% SHAREHOLDING INTEREST IN SYSCAN MANUFACTURING LIMITED

A notice convening the special general meeting of the Company (the “SGM”) to be held at Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong at 10:00 a.m., on Friday, 12 March 2010, is set out on pages 42 to 43 of this circular. A form of proxy for use at the SGM is also enclosed.

Whether or not you are able to attend the SGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the principal place of business and head office in Hong Kong of the Company c/o the Company Secretary at the Company’s principal place of business and head office in Hong Kong at Unit C, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for the holding of the SGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the SGM (or any adjournment thereof) in person if you so wish.

This circular will remain on the “Latest Company Announcement” page of the GEM website at www.hkgem.com and on the Company’s website at www.syscangroup.com for at least 7 days from the date of its publication.

8 February 2010

* For identification purpose only

CHARACTERISTICS OF THE GROWTH ENTERPRISE MARKET (“GEM”) OF THE STOCK EXCHANGE OF HONG KONG LIMITED

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

TABLE OF CONTENTS

Page

DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2.	The Share Transfer Agreement and the Loan Agreement . . . . . . . . . . . .	6
3.	Reasons and Benefits of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
4.	Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
5.	Information about the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
6.	Information about SYSCAN Manufacturing and
	SYSCAN Optoelectronics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
7.	Financial Effect of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
8.	Information about the Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
9.	Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
10.	Financial and Trading Prospect of the Group . . . . . . . . . . . . . . . . . . . .	17
11.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
12.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
APPENDIX I – FINANCIAL INFORMATION OF THE GROUP . . . . . . . .		18
APPENDIX II – UNAUDITED PRO FORMA FINANCIAL
	INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
APPENDIX III – VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . .		29
APPENDIX IV – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .		35
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		42

– ii –

DEFINITIONS

In this circular, unless the context requires otherwise, the expressions as stated below will have the following meanings:

“associate(s)” has the same meaning as defined in the GEM Listing Rules;
“Board” means the board of Directors;
“Business Day” means any day on which banks in Hong Kong generally are open for clearing and settlement business, except a Saturday, Sunday, public holiday and any day on which a tropical cyclone warning No. 8 or above or a “black rainstorm warning signal” is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.;
“Commission” means The Securities and Futures Commission of Hong Kong;
“Company”
means SYSCAN Technology Holdings Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on GEM;
“Completion” means the completion of the Share Transfer Agreement;
“Completion Date” means the day falling on or before the seventh (7th) Business Day after all the Conditions have been fulfilled or waived but not later than the Long Stop Date, or such other day the parties of the Share Transfer Agreement may agree;
“Conditions”
means the conditions precedent to the Share Transfer Agreement, details of which are set out in the paragraph headed “Conditions precedent” in this circular, and “Condition” refers to any one of them;
“Consideration”
means the consideration in respect of the Disposal in the sum equivalent to RMB90,000,000 in Hong Kong dollars payable by the Purchaser to SYSCAN Holdings pursuant to the Share Transfer Agreement;
“Disposal”
means the disposal of the Sale Shares by SYSCAN Holdings to the Purchaser pursuant to the Share Transfer Agreement;
“Directors”

means the directors of the Company, including the independent non-executive Directors;

– 1 –

DEFINITIONS

“Due Date”

means the expiry date of the Term;

“GEM”
means the Growth Enterprise Market of the Stock Exchange;
“GEM Listing Rules” means the Rules Governing the Listing of Securities on GEM;
“Group” means the Company and its subsidiaries;
“Guarantee Agreement”
means the guarantee agreement dated 8 December 2009 entered into between the Company and the Purchaser, the details of which are set out in the paragraph headed “Guarantee Agreement” under the section headed “The Share Transfer Agreement and the Loan Agreement” in this circular;
“Hong Kong”
means the Hong Kong Special Administrative Region of the PRC;
“HK$” means Hong Kong dollars, the lawful currency of Hong Kong;
“Independent Third Party”
means to the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, any person who is not connected to any director, supervisor, chief executive, promoter, substantial shareholder or management shareholder (both as defined in the GEM Listing Rules) of the Company or its subsidiaries or any of their respective associates (as defined in the GEM Listing Rules), nor a connected person (as defined in the GEM Listing Rules);
“Interest”
means the interest applicable to the Loan at the rate of 6% per annum;
“Land Property”
means the land with an area of 190,234.1 square metres located within the SYSCAN Industrial Park, the land use right of which belongs to SYSCAN Optoelectronics, including the buildings, other developments and structures erected thereon;
“Latest Practicable Date”
means 5 February 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular;

– 2 –

DEFINITIONS

“Loan”
means the loan of an aggregate amount up to the sum equivalent to RMB30,000,000 in Hong Kong dollars provided by the Purchaser to SYSCAN Holdings pursuant to the Loan Agreement;
“Loan Agreement” means the Loan Agreement entered into between SYSCAN Holdings and the Purchaser dated 8 December 2009 in relation to a loan of the sum equivalent to RMB30,000,000 in Hong Kong dollars;
“Long Stop Date”
means the day falling on the one hundred and twentieth (120th) Business Day from the date of the Share Transfer Agreement;
“Notice” means the notice convening the SGM which is set out on pages 42 to 43 of this circular;
“PRC” means the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;
“Purchaser”
means Build Up Capital Company Limited (資建有限公司), a company incorporated in the British Virgin Islands with limited liability and an Independent Third Party;
“Rise Billion”
means Rise Billion Investment Limited (億騰投資有限公司), a company incorporated in the British Virgin Islands with limited liability, the 55% shareholder of SYSCAN Manufacturing and an Independent Third Party. Other than being the 55% shareholder of SYSCAN Manufacturing, Rise Billion does not have any relationship with the Company;
“RMB”
means Renminbi, the lawful currency of the PRC;
“Sale Shares”
means 22,500 shares of US$1 each in SYSCAN Manufacturing, representing 45% of the entire issued share capital of SYSCAN Manufacturing;
“SFO”
means Securities and Futures Ordinance, Chapter 571 of the laws of Hong Kong;
“SGM”
means the special general meeting of the Company to be held at Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong, on Friday, 12 March 2010 at 10:00 a.m. and the notice of which is set out on pages 42 to 43 of this circular;

– 3 –

DEFINITIONS

“Share(s)”
“Share Pledge”
“Share Transfer Agreement”
“Shareholders”
“Stock Exchange”
“SYSCAN Holdings”
“SYSCAN Industrial Park”
“SYSCAN Manufacturing”
“SYSCAN Optoelectronics”
“US$”
“Term”
“%”
means share(s) of nominal value of HK$0.01 each in the existing share capital of the Company;
means the Share Pledge entered into between SYSCAN Holdings and the Purchaser dated 8 December 2009 in relation to the pledge of the Sale Shares;
means the Share Transfer Agreement entered into between SYSCAN Holdings and the Purchaser on 8 December 2009 in relation to the Disposal;
means the shareholders of the Company;
means The Stock Exchange of Hong Kong Limited;
means SYSCAN Holdings Limited, a wholly-owned subsidiary of the Company incorporated in the British Virgin Islands with limited liability;
means the industrial park with an area of 252,338.56 square metres located at Shuitian Village, Shiyan Town, Baoan District, Shenzhen, PRC (中國深圳市寶安區石岩鎮水田村);
means SYSCAN Manufacturing Limited (矽感數碼科技製作有限公司), of which 45% of its equity interests are indirectly held by the Company, incorporated in the British Virgin Islands with limited liability;
means 深圳矽感光電有限公司 (SYSCAN Optoelectronics Technology (Shenzhen) Co., Ltd.*), a wholly foreign owned company established in the PRC with limited liability and 45% owned by the Company indirectly through SYSCAN Holdings and SYSCAN Manufacturing;

means US dollars;

means the term of the Loan; and

means percentage.

* For identification purpose only

– 4 –

LETTER FROM THE BOARD

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**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

Executive Directors: Cheung Wai Frank Cheung

Independent Non-Executive Directors: Fong Chi Wah Jin Qingjun Wang Ruiping

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head Office and Principal Place of Business:

Unit C, 21st Floor Seabright Plaza 9-23 Shell Street North Point Hong Kong

8 February 2010

To the shareholders of the Company

Dear Sir/Madam,

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF 45% SHAREHOLDING INTEREST IN SYSCAN MANUFACTURING LIMITED

1. INTRODUCTION

On 8 December 2009, SYSCAN Holdings, a direct wholly-owned subsidiary of the Company, and the Purchaser entered into the Share Transfer Agreement, pursuant to which SYSCAN Holdings agreed to sell and the Purchaser agreed to purchase from SYSCAN Holdings the Sale Shares (22,500 shares of US$1 each in SYSCAN Manufacturing, representing 45% of the entire issued share capital of SYSCAN Manufacturing) at the Consideration of RMB90,000,000 (equivalent to approximately HK$102,159,000).

* For identification purpose only

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, further information on the Disposal, financial information in relation to the Group, the Notice of the SGM and other information as required under the GEM Listing Rules.

2. THE SHARE TRANSFER AGREEMENT AND THE LOAN AGREEMENT

A. Major terms of the Share Transfer Agreement

Date: 8 December 2009

Parties:

Vendor:

SYSCAN Holdings, a company incorporated in the British Virgin Islands and a direct wholly-owned subsidiary of the Company

Purchaser:

Build Up Capital Company Limited (資建有限公司)

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are Independent Third Parties who are independent of and not connected with the Company and its connected persons (as defined in the GEM Listing Rules). The Group was not involved in any previous transaction with the Purchaser in the previous 12 months which would otherwise require aggregation with the Disposal pursuant to Rule 19.22 of the GEM Listing Rules.

Shares to be disposed of:

The Sale Shares, being the 22,500 shares of US$1 each in SYSCAN Manufacturing, representing 45% of its entire issued share capital.

Consideration:

The Consideration in respect of the Disposal shall be RMB90,000,000 (equivalent to HK$102,159,000) which will be payable in Hong Kong dollars and represents the aggregate of (a) the Loan Consideration; and (b) the Cash Consideration.

(a) Loan Consideration

The Loan in the sum equivalent to RMB30,000,000 in Hong Kong dollars was made available by the Purchaser to SYSCAN Holdings on the date of the Loan Agreement. Upon Completion, the Loan shall form part payment of the

– 6 –

LETTER FROM THE BOARD

Consideration. A summary of the major terms of the Loan Agreement is set out in the paragraph headed “Loan Agreement” below.

(b) Cash Consideration

The sum in cash equivalent to RMB60,000,000 in Hong Kong dollars, being the remaining balance of the Consideration, will be payable on the Completion Date.

The Consideration was determined after arm’s length negotiation between SYSCAN Holdings and the Purchaser with reference to, among other things, the valuation of the Land Property of RMB210,000,000 (equivalent to approximately HK$238,371,000), taking into account certain assumptions, including but not limited to the assumption that the owner of the Land Property has free and uninterrupted to use, occupy or assign the property interest for the entire unexpired terms of the respective land use right and assuming that all relevant licences, consents and approvals have been obtained, as shown in the valuation report of the Land Property on the valuation date, being 8 December 2009, prepared by Ascent Partners Transaction Service Limited, an Independent Third Party, as contained in Appendix III to this Circular.

Conditions precedent:

Completion shall be conditional upon the satisfaction of various conditions, a summary of which is set out below:

(A) Conditions Precedent to the Purchaser’s obligations

The obligations of the Purchaser to proceed to Completion shall be subject to:

Conditions in relation to the Land Property

(1) the completion of the sale and purchase of the 55% equity interest in SYSCAN Manufacturing from Rise Billion, the controlling shareholder of SYSCAN Manufacturing to the Purchaser;
(2) the title of the Land Property being free from any encumbrance, lien and charges;
(3) the Purchaser being satisfied with the results of the due diligence on SYSCAN Manufacturing, SYSCAN Optoelectronics and the title of the Land Property;
(4) the Purchaser’s Hong Kong and PRC legal advisers having issued their respective legal opinion on SYSCAN Manufacturing, SYSCAN Optoelectronics and the title of the Land Property;

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LETTER FROM THE BOARD

Conditions in relation to SYSCAN Manufacturing

(1) the delivery of a letter of undertaking executed by the Company to the Purchaser;
(2) the delivery of the Guarantee Agreement executed by the Company to the Purchaser;
(3) the delivery of the land use right certificate of the Land Property to the Purchaser’s Hong Kong legal advisor;
(4) the delivery of the escrow documents (as defined in the Share Transfer Agreement) for the Purchaser ’s Hong Kong legal adviser’s custody;
(5) adequate and necessary assistance having been provided by SYSCAN Holdings to the Purchaser for its due diligence work and no material deficiency was found between the results of the due diligence exercise performed by the Purchaser and the representation and disclosure of SYSCAN Holdings made in the Share Transfer Agreement and no actual defects or deficiency which shall adversely effect the Consideration and the terms and conditions of the Share Transfer Agreement, as such the Purchaser can rely on the results of its due diligence exercise to enter into the Completion;
(6) the Company, SYSCAN Holdings, SYSCAN Manufacturing and its subsidiary having obtained all necessary consents or approvals for their execution, delivery and performance of the Share Transfer Agreement and all documents in connection with the Disposal, including but not limited to respective board resolutions, shareholders’ resolutions and other government approvals (if necessary);
(7) the approval of the Share Transfer Agreement, the Disposal and the transactions contemplated thereunder by the Shareholders (or independent Shareholders, if required) at the SGM having been obtained in accordance with the GEM Listing Rules;
(8) the representations and warranties set forth in the Share Transfer Agreement made by SYSCAN Holdings remaining valid and subsisting with no violation of the terms of the Share Transfer Agreement or anything contrary to the said representations and warranties having been observed;
(9) SYSCAN Holdings and SYSCAN Manufacturing and its subsidiary having obtained all consents from, or have notified or registered at the relevant governmental authorities or any other

– 8 –

LETTER FROM THE BOARD

parties pursuant to the applicable laws and regulations and/or any agreements or arrangements, whereas necessary, for their execution, delivery and performance of the Share Transfer Agreement and the Disposal;

(10) SYSCAN Holdings assuring at its best effort that its warranties under the Share Transfer Agreement remaining valid and subsisting on the Completion Date;
(11) save as disclosed in the Share Transfer Agreement, SYSCAN Holdings having warranted that there are no liabilities due to any other parties incurred by or in relation to SYSCAN Manufacturing, SYSCAN Optoelectronics and the Land Property;
(12) the full performance, compliance and fulfillment, in all material aspect, of SYSCAN Holdings and SYSCAN Manufacturing and its subsidiary of their respective duties and obligations at or before the Completion under the Share Transfer Agreement and their respective articles of association;
(13) the performance of the Share Transfer Agreement being free from any limitation arose from any other agreements or any other third party approvals;
(14) the delivery of the signed certificate dated the Completion Date by SYSCAN Holdings to the Purchaser, confirming the fulfillment of the Conditions;
(15) no material change, or in SYSCAN Holdings’ reasonable expectations that there is no change to the regulations, policies and requirements of the relevant governmental authorities, and any laws, regulations and policy which relates to the execution and the performance of the Share Transfer Agreement and documents in relation to the Disposal, which shall lead to the failure of performance of the duties and obligations under the Share Transfer Agreement and documents in relation to the Disposal;
(16) the Purchaser, on or before the Completion Date, having reasonably formed the view that: (i) there was and there shall be no material adverse change on the business of SYSCAN Manufacturing and its subsidiary and there is no material adverse change on the operation, properties and financial status, profit or revenue of SYSCAN Manufacturing and its subsidiary; (ii) no laws, rules or policies of the jurisdiction where the business of SYSCAN Manufacturing and its subsidiary commence which the Purchaser shall reasonably believe such laws, rules or policies would result or may result in any material change which has or may have material adverse effect on SYSCAN Manufacturing and its subsidiary before or after the Completion;

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LETTER FROM THE BOARD

(17) no governmental authority or legal entity which maintains business relationships with SYSCAN Holdings or SYSCAN Manufacturing:
- (a) casting doubts on the Disposal or the transactions contemplated under the documents in relation to the Disposal by limitations, prohibitions or other actions, or requesting SYSCAN Holdings or SYSCAN Manufacturing to provide any information or leave SYSCAN Holdings or SYSCAN Manufacturing under threat for any legal proceedings, arbitrations, administrative proceedings or inquiries;
- (b) taking any actions such as legal proceedings, arbitrations, administrative proceedings or inquiries to SYSCAN Holdings or SYSCAN Manufacturing before or after the Completion in order to query on the Disposal or the transactions contemplated under the documents in relation to the Disposal by limitations, prohibitions or other actions;
- (c) proposing or passing any legislation to prohibit, seriously limit or delay the Disposal, the performance of the Share Transfer Agreement or the transaction contemplated under the documents in relation to the Disposal or the operation of SYSCAN Manufacturing after the Completion;
(18) SYSCAN Holdings and Rise Billion (as required under its share transfer agreement with the Purchaser in connection with the sale and purchase of 55% shareholding interest in SYSCAN Manufacturing) having provided the Purchaser with receipts and vouchers evidencing that the costs and expenses in connection with the land and the buildings erected thereon, bank interests and employees’ emoluments (all of which can be accounted as SYSCAN Optoelectronics’ project development cost) prior to the date of the Share Transfer Agreement shall not be less than RMB140 million.
(B) Conditions Precedent to SYSCAN Holdings’ obligations

The obligations of SYSCAN Holdings to proceed to Completion shall be subject to:

(1) the representations and warranties of the Purchaser under the Share Transfer Agreement of the Purchaser remaining valid and subsisting;

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LETTER FROM THE BOARD

(2) the Purchaser having obtained all necessary consents or approvals for their execution, delivery and performance of the Share Transfer Agreement and all documents in connection with the Disposal, including but not limited to respective board resolutions, shareholders’ resolutions and other government approvals (if necessary);
(3) the full performance, compliance and fulfillment, in all material aspect, of the Purchaser’s duties and obligations at or before the Completion under the Share Transfer Agreement;
(4) the completion of the Loan Agreement and the Purchaser having provided the Loan to SYSCAN Holdings; and
(5) the delivery of the signed certificate dated the Completion Date by the Purchaser to SYSCAN Holdings, confirming the fulfillment of the Conditions.

In the event that any of the Conditions is not fulfilled (or waived, if applicable) on or before the Completion Date, SYSCAN Holdings and the Purchaser may choose to (i) extend the Completion Date; or (ii) terminate the Share Transfer Agreement. Should the Share Transfer Agreement be terminated, SYSCAN Holdings shall repay the Loan plus the Interest on the Due Date in accordance to the terms and conditions of the Loan Agreement.

The Company would like to address that, to the best of the Directors’ knowledge, information and belief, condition 18 of the conditions in relation to SYSCAN Manufacturing under the paragraph headed “(A) Conditions Precedent to the Purchaser’s obligations” above was included as a condition for Completion as the Purchaser will be required to present to the relevant PRC tax authorities all documentary evidence relating to the costs and expenses in connection with the land development and building construction and other auxiliary infrastructure costs as well as other costs and expenses in connection with the Land Property for tax deduction purposes after the Completion. The amount was determined in accordance with the actual costs and expenses incurred and accounted as SYSCAN Optoelectronics’ project development cost of approximately HK$141 million.

To the best of the Directors’ knowledge, information and belief, all the conditions precedent in relation to the Purchaser’s obligations have been fulfilled, save and except the approval of the Share Transfer Agreement, the Disposal and the transaction contemplated thereunder by the Shareholders at the SGM.

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LETTER FROM THE BOARD

Completion

Completion shall take place on or before the seventh (7th) Business Day after the date on which all Conditions have been fulfilled and/or waived but not later than the Long Stop Date at the office of the Purchaser’s Hong Kong legal counsel or at such other place, on such other time and/or day as the parties to the Share Transfer Agreement may agree.

Guarantee Agreement

The Company and the Purchaser entered into the Guarantee Agreement on 8 December 2009 pursuant to which the Company shall guarantee that SYSCAN Manufacturing and SYSCAN Optoelectronics did not have any debts before the date of the Share Transfer Agreement except those as disclosed therein. In the event that SYSCAN Manufacturing or SYSCAN Optoelectronics is claimed after the date of the Share Transfer Agreement for debts incurred on or prior to 29 October 2007, the Company shall be liable to repay the debts in full. On the other hand, the Company shall only be liable to repay 45% of the total amount of debts incurred from 30 October 2007 until the Completion Date.

B. Major terms of the Loan Agreement

Date: 8 December 2009

Parties:

Borrower:

SYSCAN Holdings, a company incorporated in the British Virgin Islands and a direct wholly-owned subsidiary of the Company

Lender: the Purchaser

Loan Amount:

The sum equivalent to RMB30,000,000 in Hong Kong dollars.

Term:

The Term of the Loan shall be for a period from the date of the Loan Agreement until the earlier of (i) the Loan forming part payment of the Consideration on the Completion Date; or (ii) the termination of the Share Transfer Agreement as a result of the Purchaser not being satisfied with the results of the due diligence exercise or non-fulfillment of any other Condition(s); or (iii) the date falling one year after the date of the Loan Agreement.

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LETTER FROM THE BOARD

Interest:

In the event that the Completion shall take place, no interest on the Loan shall be payable by SYSCAN Holdings to the Purchaser. In the event that the Completion shall fail to take place in accordance with the terms of the Share Transfer Agreement, the Loan shall bear Interest at the rate of 6% per annum. The Interest was determined by SYSCAN Holdings and the Purchaser based on arm’s length negotiations with reference made to the RMB loan interest rate set by the Bank of China at the material time.

Repayment:

In the event that the Completion shall take place, the Loan shall form part payment of the Consideration and no repayment of the Loan will be required. On the other hand, in the event that the Completion shall fail to take place in accordance with the terms of the Share Transfer Agreement, the Loan plus all accrued Interest and other related expenses (if any) shall be payable in full by SYSCAN Holdings within seven (7) Business Days after the date on which SYSCAN Holdings receives a written notice issued by the Purchaser indicating that no Completion shall take place.

Security:

(A) Share Pledge

SYSCAN Holdings and the Purchaser entered into the Share Pledge on 8 December 2009 pursuant to which the Sale Shares were pledged to the Purchaser. The Share Pledge will be released upon occurrence of any one of the following events (whichever is earlier):

(a) the Completion shall fail to take place in accordance with the terms of the Share Transfer Agreement and SYSCAN Holdings (or the Company, as guarantor under the Guarantee Agreement) has fully repaid the Loan plus all accrued Interest and other related expenses (if any) within seven (7) Business Days after the date on which SYSCAN Holdings receives a written notice issued by the Purchaser indicating that no Completion shall take place; or
(b) the Completion shall take place in accordance with the terms of the Share Transfer Agreement.

(B) Letter of Undertaking

The Company issued a letter of undertaking in favour of the Purchaser on 8 December 2009 to guarantee SYSCAN Holdings’ obligations under the Loan Agreement.

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LETTER FROM THE BOARD

3. REASONS FOR AND BENEFITS OF THE DISPOSAL

SYSCAN Manufacturing was established by the Company as a wholly owned subsidiary to indirectly hold the entire interest in the Land Property through SYSCAN Optoelectronics, a wholly-owned subsidiary of SYSCAN Manufacturing. On 30 October 2007, the Company and SYSCAN Manufacturing entered into a share transfer agreement with Rise Billion pursuant to which the Company sold a 55% interest in SYSCAN Manufacturing to Rise Billion at a consideration of RMB126,500,000. SYSCAN Manufacturing ceased to be a subsidiary and became an associate of the Company in December 2007.

Both SYSCAN Manufacturing and SYSCAN Optoelectronics have not carried out any business activities other than property holding (in respect of SYSCAN Optoelectronics only) since their incorporation. As at the Latest Practicable Date, save and except the existing buildings erected thereon, the Land Property was idle and not being used by the Group. Please refer to “Appendix III – Valuation Report” for further details for the current occupancy status of the existing buildings. As such, the Disposal will not have any negative impact on the continuous operations of the Group. On the other hand, the Disposal is expected to record a gain for the Group and gross cash inflow which will be used for establishing a new production base and as working capital of the Group.

The Board confirms that the terms of the Share Transfer Agreement are negotiated on arm’s length basis, fair and reasonable and in the interests of the Shareholders as a whole.

4. USE OF PROCEEDS

The proceeds from the Disposal is approximately HK$102,159,000. The balance of the proceeds from the Disposal, after deduction of expenses, is currently estimated to be approximately HK$101,519,000 will be used as working capital of the Group and will be used to fund the construction or the acquisition of new factory premises by the Group in the PRC.

5. INFORMATION ABOUT THE GROUP

The Company is an investment holding company and its subsidiaries are principally engaged in the design, research, development, manufacturing and distribution of optical image capturing devices and related components. The geographical segments of the abovementioned businesses are mainly located in the United States of America and the PRC. The audited turnover of the Group for the two years ended 31 December 2007 and 31 December 2008 were approximately HK$86,227,000 and HK$71,466,000 respectively. The audited net loss from continuing operations of the Group for the two years ended 31 December 2007 and 31 December 2008 were approximately HK$11,410,000 and HK$29,049,000 respectively.

– 14 –

LETTER FROM THE BOARD

6. INFORMATION ABOUT SYSCAN MANUFACTURING AND SYSCAN OPTOELECTRONICS

SYSCAN Manufacturing is an investment holding company incorporated in the British Virgin Islands with limited liability and 45% of its equity interest is indirectly held by the Company through SYSCAN Holdings (a wholly-owned subsidiary of the Company). As at the date of this circular, the registered share capital of SYSCAN Manufacturing is US$50,000 of US$1 each. SYSCAN Manufacturing has not carried on any business activities since its incorporation and has no material assets other than holding of the entire issued share capital of SYSCAN Optoelectronics. SYSCAN Optoelectronics is a wholly foreign owned enterprise established in the PRC with limited liability and is a property holding company. SYSCAN Optoelectronics currently holds the land use right certificate (土地使用權證) of the Land Property for a validity period of 50 years commencing from 26 July 2001 to 25 July 2051 for industrial use at a consideration of RMB19,698,354. Currently, the Land Property is jointly owned by the Group and Rise Billion as to 45% and 55% respectively and is not in used by SYSCAN Optoelectronics. The aggregate construction costs incurred up to the date of this circular are approximately RMB124,350,000 (equivalent to approximately HK$141,134,000).

As at 30 September 2009, SYSCAN Manufacturing and SYSCAN Optoelectronics had a consolidated net asset value of approximately RMB140,000,000 (equivalent to approximately HK$159,000,000) (Note 1). The following table shows certain financial information of SYSCAN Manufacturing (consolidated with the results of SYSCAN Optoelectronics) for the two years ended 31 December 2008 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the	For the
	year ended	year ended
	31 December	31 December
	2007	2008
Net profit/(loss) (after taxation and	HK$233,756,000	HK$(4,142,000)
extraordinary items)	(Note 2)
Net profit/(loss) (before taxation and	HK$233,756,000	HK$(4,142,000)
extraordinary items)	(Note 2)

Notes:

It was disclosed in the Company’s announcement dated 18 December 2009 that SYSCAN Manufacturing and SYSCAN Optoelectronics had a consolidated net asset value of approximately RMB52,992,700 (equivalent to approximately HK$60,152,000). Adjustments were made to the figures to fully reflect the carry forward effect of the waiver of inter-company balances that form part of the disposal of the 55% shareholding interests in SYSCAN Manufacturing during the year ended 31 December 2007.
It was disclosed in the Company’s announcement dated 18 December 2009 that the consolidated net profit/(loss) of SYSCAN Manufacturing before and after taxation and extraordinary items for the year ended 31 December 2007 are HK$71,998,000 and HK$(3,888,000) respectively. Adjustments were made to the figures to fully reflect the waiver of inter-company balances that form part of the disposal of the 55% shareholding interests in SYSCAN Manufacturing during the year ended 31 December 2007.

– 15 –

LETTER FROM THE BOARD

According to the share transfer agreement dated 30 October 2007 between the Company and Rise Billion in connection with the Group’s disposal of 55% shareholding interest in SYSCAN Manufacturing, the Group waived or set off all inter-company balances with SYSCAN Manufacturing and SYSCAN Optoelectronics which resulted in a gain for SYSCAN Manufacturing for the year ended 31 December 2007. No such gain was recorded for SYSCAN Manufacturing for the year ended 31 December 2008 and the losses represented the operating expenses incurred by SYSCAN Optoelectronics during that year.

Upon Completion, SYSCAN Manufacturing will cease to be an associate of the Company.

7. FINANCIAL EFFECT OF THE DISPOSAL

It is estimated that, upon Completion, the Group will record a profit from the Disposal of approximately HK$1,447,000 which will be recorded in the consolidated profit and loss accounts of the Group for the year ending 31 December 2010. The profit on the Disposal is calculated based on (i) the net proceeds of the Disposal of approximately HK$101,519,000; and (ii) the cost of assets to be disposed by the Group of approximately HK$100,072,000. Based on the Group’s unaudited pro forma statement of financial position illustrating the effect of the Disposal as if the Disposal had taken place on 30 June 2009, the Disposal would result in an increase of the total assets of the Group of approximately HK$3,172,000 and an increase in the total liabilities of the Group of approximately HK$1,725,000 subject to final audit.

8. INFORMATION ABOUT THE PURCHASER

The Purchaser is a company incorporated in the British Virgin Islands with limited liability and is an investment holding company. To the best of the Directors’ knowledge, information and belief, and after making all reasonable enquiries, the Purchaser and its ultimate beneficial owners are Independent Third Parties and are not connected persons of the Company as defined under the GEM Listing Rules.

9. LISTING RULES IMPLICATIONS

As the applicable percentage ratios as defined in the GEM Listing Rules are more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 19 of the GEM Listing Rules and is therefore subject to the approval of the Shareholders at the SGM to be convened. To the best of the Directors’ knowledge, information and belief, and after making all reasonable enquiries, the Purchaser does not hold any Shares and none of the Shareholders is required to abstain from voting for the resolution(s) to approve the Share Transfer Agreement and the transactions contemplated thereunder at the SGM.

The notice of SGM is set out on pages 42 to 43 of this circular. At the SGM, an ordinary resolution will be proposed for the approval by the Shareholders of the Disposal. The votes to be taken at the SGM in respect of the ordinary resolution to approve the Disposal will be taken by poll and the results of which will be announced after the SGM.

– 16 –

LETTER FROM THE BOARD

Whether or not you are able to attend the SGM in person, you are requested to complete and return the enclosed form of proxy. In order to be valid, the form of proxy must be deposited at the principal place of business and head office of the Company in Hong Kong at Unit C, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong together with the power or attorney or other authority (if any) under which it is signed or certified copy of such power of attorney or authority, not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the SGM if you so wish.

10. FINANCIAL AND TRADING PROSPECT OF THE GROUP

Facing the tough and competitive IT industry, the Group will actively cut down its general overheads and production cost, and will actively develop different products, including but not limited to ID and passport scanners and 2D barcode scanners, in order to bring in more revenue to the Group.

After several years’ intensive research and development activities over the 2D barcode technology, it is expected that real life application of the technology would be crystallized. The management is confident that the Company would become a major service provider in the 2D barcode application business within the PRC market.

11. RECOMMENDATION

The Board is of the opinion that the terms of the Share Transfer Agreement are fair and reasonable and the Disposal is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution of the Company to be proposed at the SGM.

12. ADDITIONAL INFORMATION

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

By order of the board of SYSCAN TECHNOLOGY HOLDINGS LIMITED Cheung Wai Chairman

– 17 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. INDEBTEDNESS

Borrowings

As at 31 December 2009, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following outstanding borrowings:

Due to an associate (Note 1) Other loan from a third party (Note 2)	Non-current portion HK$’000 – – –	Current portion HK$’000 20,790 3,399 24,189	Total HK$’000 20,790 3,399
			24,189

Notes:

The amount due to an associate is unsecured, interest-free and is repayable on demand.
The other loan from a third party is unsecured, interest-free and is repayable on demand.

Contingent liabilities

As at 31 December 2009, the Group had no material contingent liabilities.

Commitments

As at 31 December 2009, the Group had operating lease commitments of approximately HK$9,961,000 in respect of the leases for certain of its office properties.

Disclaimers

Save as aforesaid herein and apart from intra-group liabilities, as at 31 December 2009, the Group had no debt securities issued and outstanding, and authorised or otherwise created but issued, term loans, distinguishing between guaranteed by the Group, guaranteed by independent third parties, unguaranteed, secured and unsecured bank borrowings including bank loans, bank overdrafts or other similar indebtedness, liabilities under acceptances (other than normal trade bills) or acceptance credit, hire purchase or finance lease commitments, guarantees or other material contingent liabilities.

– 18 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

No material changes

Save as disclosed herein, the Directors confirmed that there have not been any material changes in the indebtedness of the Group since 31 December 2009 up to the Latest Practicable Date.

2. WORKING CAPITAL

The Directors, after due and carefully enquiry, are of the opinion that following the Completion, after taking into account the financial resources available to the Group, including the internally generated funds, the Group will have sufficient working capital for its present requirements for a period of 12 months from the date of this circular.

3. MATERIAL CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material change in the financial or trading position of the Group since 31 December 2008, being the date to which the latest published audited accounts of the Group were made up.

– 19 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

1. INTRODUCTION

The Unaudited Pro Forma Financial Information of the Group has been prepared in accordance with in accordance with Paragraph 31 of Chapter 7 of the GEM Listing Rules to illustrate the effect of the proposed disposal (the “Disposal”) of the 45% shareholding interests in SYSCAN Manufacturing Limited (“SYSCAN Manufacturing”) and its subsidiaries (collectively the “SML Group”).

The unaudited pro forma statement of financial position of the Group has been prepared for the purpose of illustrating the effect of the Disposal as if the Disposal had taken place on 30 June 2009. The unaudited pro forma statement of financial position of the Group is based upon the unaudited consolidated statement of financial position of the Group as at 30 June 2009, which has been extracted from the published interim report of the Group for the six months ended 30 June 2009, after making pro forma adjustments relating to the Disposal that are (i) directly attributable to the transaction and (ii) factually supportable.

The unaudited pro forma statement of comprehensive income and the unaudited pro forma statement of cash flows of the Group have been prepared for the purpose of illustrating the effect of the Disposal as if the Disposal had taken place on 1 January 2008. The unaudited pro forma statement of comprehensive income and the unaudited pro forma statement of cash flows of the Group are based upon the audited consolidated income statement and the audited consolidated cash flow statement of the Group for the year ended 31 December 2008, which have been extracted from the published annual report of the Group for the year ended 31 December 2008, after making pro forma adjustments relating to the Disposal that are (i) directly attributable to the transaction and (ii) factually supportable.

The unaudited pro forma financial information of the Group is prepared by the directors of the Company based on a number of assumptions, estimates and uncertainties for illustrative purposes. Accordingly, the accompanying unaudited pro forma financial information of the Group does not purport to describe (i) the actual financial position of the Group that would have been attained had the Disposal been completed on 30 June 2009; or (ii) the actual results of operations and cash flows of the Group that would have been attained had the Disposal been completed on 1 January 2008. The unaudited pro forma financial information of the Group does not purport to predict the future financial position, results of operations or cash flows of the Group.

The unaudited pro forma financial information of the Group should be read in conjunction with the financial information of the Group as set out in Appendix I to this circular, and other financial information included elsewhere in this circular.

– 20 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

2. UNAUDITED PRO FORMA COMBINED STATEMENT OF COMPREHENSIVE INCOME OF THE GROUP

CONTINUING OPERATIONS Revenue Cost of sales Gross profit Other income and gains Selling and distribution costs General and administrative expenses Research and development expenses Other operating expenses Loss from continuing operations Finance costs Loss on disposal of an associate Gain on disposal of an associate Share of losses of associates Loss before tax Tax Loss for the year from continuing operations DISCONTINUED OPERATION Sale consideration forfeited, net	The Group 31 December 2008 Pro-forma adjustments HK$’000 HK$’000 HK$’000 HK$’000 Audited Unaudited Unaudited Unaudited (Note 2 (a)) (Note 2 (b)) (Note 2 (c)) 71,466 (58,706)	Pro forma The Group HK$’000 Unaudited 71,466 (58,706)
	12,760 4,738 (8,520) (24,338) (10,153) (1,131) (26,644) (12) (529) – 1,447 (1,864) 1,864 (29,049) – (29,049) 51,387	12,760 4,738 (8,520) (24,338) (10,153) (1,131)
		(26,644) (12) (529) 1,447 –
		(25,738) –
		(25,738)
		51,387

– 21 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

Profit for the year from a discontinued operation PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME FOR THE YEAR TOTAL COMPREHENSIVE INCOME FOR THE YEAR	The Group 31 December 2008 Pro-forma adjustments HK$’000 HK$’000 HK$’000 HK$’000 Audited Unaudited Unaudited Unaudited (Note 2 (a)) (Note 2 (b)) (Note 2 (c)) 51,387 22,338 – 22,338	Pro forma The Group HK$’000 Unaudited 51,387
		25,649 –
		25,649

– 22 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

3. UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION OF THE GROUP

NON-CURRENT ASSETS Property, plant and equipment Interest in associates Total non-current assets CURRENT ASSETS Inventories Tax prepaid Trade receivables Prepayments, deposits and other receivables Financial assets at fair value through profit or loss Cash and bank balances Total current assets CURRENT LIABILITIES Trade payables Due to associates Tax payable Accruals and other payables Total current liabilities NET CURRENT (LIABILITIES)/ASSETS Net assets EQUITY Issued capital Reserves Non-controlling interest Total equity	The Group 30 June 2009 Pro-forma adjustments HK$’000 HK$’000 HK$’000 HK$’000 Unaudited Unaudited Unaudited Unaudited (Note 2 (a)) (Note 2 (b)) (Note 2 (c)) 13,857 118,947 (98,987)	Pro forma The Group HK$’000 Unaudited 13,857 19,960
	132,804 3,033 828 6,873 14,651 1,139 22,452 102,159 48,976 5,849 33,582 1,085 396 24,052 640 63,879 (14,903)	33,817
		3,033 828 6,873 14,651 1,139 124,611
		151,135
		5,849 34,667 396 24,692
		65,604
		85,531
	117,901	119,348

	20,473 94,817 1,447 115,290 2,611	20,473 96,264
		116,737 2,611
	117,901	119,348

– 23 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF CASH FLOWS OF THE GROUP

CASH FLOW FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Finance costs Interest income Loss on disposal of an associate Share of loss of associates Gain on disposal of items of property, plant and equipment Gain on disposal of an associate Sales consideration forfeited, net Depreciation of property, plant and equipment Increase in inventories Decrease in trade receivables Decrease in prepayment, deposits and other receivables Increase in equity investment at fair value through profit and loss Increase in trade payables Increase in other payables Cash used in operations Interest received Interest paid Overseas tax recovered Net cash outflow from operating activities	The Group 31 December 2008 Pro forma adjustments HK$’000 HK$’000 HK$’000 HK$’000 Audited Unaudited Unaudited Unaudited (Note 2 (a)) (Note 2 (b)) (Note 2 (c)) 22,338 1,864 1,447 12 (257) 529 1,864 (1,864) (2,876) – (1,447) (51,387) 3,490	Pro forma The Group HK$’000 Unaudited 25,649 12 (257) 529 – (2,876) (1,447) (51,387) 3,490
	(26,287) (651) 1,588 1,352 (1,139) 63 19,899 (5,175) 257 (12) 76 (4,854)	(26,287) (651) 1,588 1,352 (1,139) 63 19,899
		(5,175) 257 (12) 76
		(4,854)

– 24 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

CASH FLOWS FROM INVESTING ACTIVITIES Other receivables received in respect of the proceeds from disposal of a subsidiary in pervious year Proceed from disposal of items of property, plant and equipment Proceed from disposal of an associate Additions to construction in progress Decrease in amount due to associates Increase in amount due from an associate Purchases of items of property, plant and equipment Net cash inflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Repayment of short term bank loans Proceeds from shares issued from a rights issue Net cash outflow from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances	The Group 31 December 2008 Pro forma adjustments HK$’000 HK$’000 HK$’000 HK$’000 Audited Unaudited Unaudited Unaudited (Note 2 (a)) (Note 2 (b)) (Note 2 (c)) 15,600 8,524 – 102,159 (1,066) (944) (1,584) (7,347)	Pro forma The Group HK$’000 Unaudited 15,600 8,524 102,159 (1,066) (944) (1,584) (7,347)
	13,183 (10,138) (8,983) 16,378 (2,743) 5,586 25,349 (705)	115,342
		(10,138) (8,983) 16,378
		(2,743)
		107,745 25,349 (705)
	30,230 30,230 102,159	132,389

		132,389

– 25 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

Notes to the unaudited pro forma financial information:

The figures of the consolidated financial statements of the Group are extracted from (1) the unaudited condensed statement of financial position as at 30 June 2009 included in the published interim report of the Group for the six months ended 30 June 2009; and (2) the audited consolidated income statement and the audited consolidated cash flow statement included in the published annual report of the Group for the year ended 31 December 2008.
The adjustments in connection with the Disposal represent:
a. The adjustment reflects the exclusion of the financial results of SYSCAN Manufacturing and its subsidiary (the “SML Group”) from the Group’s consolidated income statement assuming the Disposal had taken place on 1 January 2008.
b. The adjustment reflects the gain arising from the Disposal, as follows:

Total gross consideration of RMB90,000,000 (approximately HK$102,159,000) received and receivable: Amount received on signing of the Loan and Share Transfer Agreements The remaining balance Interest in the SML Group disposed of Write off of the amount due from the SML Group Legal and other professional fees directly relating to the Disposal Gain arising from the Disposal	HK$’000 34,053 68,106
	102,159 (98,987) (1,085) (640)
	1,447

c. The adjustment reflects the gross consideration of the Disposal of the SML Group received by the Group assuming the Disposal had taken place and completed on 1 January 2008.

– 26 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

B. REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

==> picture [269 x 68] intentionally omitted <==

13F, Neich Tower, 128 Gloucester Road, Wanchai, Hong Kong 香港灣仔告士打道128號祥豐大廈13F座

8 February 2010

The Board of Directors SYSCAN Tehnology Holdings Limited

Dear Sirs,

We report on the unaudited pro forma financial information (the “Unaudited Pro Forma Financial Information”) of SYSCAN Tehnology Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) in connection with the proposed disposal of the entire equity interests in SYSCAN Manufacturing Limited (the “Disposal”). The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company, for illustrative purposes only, to provide information about how the Disposal might have affected the financial information presented, for inclusion in Appendix II of the circular dated 8 February 2010 (the “Circular”). The basis of preparation of the Unaudited Pro Forma Financial Information is set out on pages 20 to 26 of the Circular.

Respective responsibilities of directors of the Company and the reporting accountants

It is the responsibility solely of the directors of the Company to prepare the Unaudited Pro Forma Financial Information in accordance with Paragraph 31 of Chapter 7 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

It is our responsibility to form an opinion, as required by Paragraph 31(7) of Chapter 7 of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

– 27 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION

Basis of opinion

We conducted our engagement in accordance with Hong Kong Standard on Investment Circular Reporting Engagements (HKSIR) 300 “Accountants’ Reports on Pro Forma Financial Information in Investment Circulars” issued by the HKICPA. Our work consisted primarily of comparing the unadjusted financial information with source documents, considering the evidence supporting the adjustments and discussing the Unaudited Pro Forma Financial Information with the directors of the Company. This engagement did not involve independent examination of any of the underlying financial information.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated, that such basis is consistent with the accounting policies of the Group and that the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

Our work did not constitute an audit or review made in accordance with Hong Kong Standards on Auditing or Hong Kong Standards on Review Engagements issued by the HKICPA, and accordingly, we did not express any such assurance on the Unaudited Pro Forma Financial Information.

The Unaudited Pro Forma Financial Information is for illustrative purpose only, based on the judgements and assumptions of the directors of the Company, and, because of its hypothetical nature, does not provide any assurance or indication that any event will take place in the future and may not be indicative of:

the financial position of the Group as at 30 June 2009 or any future date; or
the results and cash flows of the Group for the year ended 31 December 2008 or any future period.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled by the directors of the Company on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Paragraph 31(1) of Chapter 7 of the GEM Listing Rules.

CACHET CERTIFIED PUBLIC ACCOUNTANTS LIMITED

Certified Public Accountants

Chan Yuk Tong Practising Certificate Number P03723 Hong Kong

– 28 –

APPENDIX III

VALUATION REPORT

The following is the text of a letter and valuation certificate, prepared for the purpose of incorporation in this circular received from Ascent Partners Transaction Service Limited, an independent valuer, in connection with its valuation as at 8 December 2009 on SYSCAN Industrial Park located on Site No. A724-0014, Shuitian Village, Shiyan Town, Bao’an District, Shenzhen, Guangdong Province, the PRC.

==> picture [181 x 54] intentionally omitted <==

Level 39, One Exchange Square, Central, Hong Kong.

Tel: 3101-7988 Fax: 3101-7987 www.ascent-partners.com REF: APG-BV-091204-086WYR2

SYSCAN Technology Holdings Limited

Unit C, 21/F., Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong.

Date: 29 January 2010

Dear Sir/Madam,

RE: Valuation of SYSCAN Industrial Park Erected on Site No. A724-0014, Shuitian Village, Shiyan Town, Bao’an District, Shenzhen Shi, Guangdong Province, the People’s Republic of China

In accordance with the instruction from SYSCAN Technology Holdings Limited (“the Company”) for us to value the property interest held by 深圳矽感光電有限公司 (SYSCAN Optoelectronic Technology (Shenzhen) Co., Limited)* located in the People’s Republic of China (“the PRC’), we confirm that we have carried out inspection, made relevant enquiries and investigations, and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interests as at 8 December 2009 (“the valuation date”). We are also instructed to advise any variance of our valuation on the same basis as at 31 December 2009 which is indicated in our attached Notes No. 7.

Our valuation is our opinion of the market value which we would define as intended to mean “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s – length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion”.

In valuing the property interests of similar nature, in particular located in the PRC, we have normally adopted a combination of the market and depreciated replacement cost approach (“DRC”) in assessing the land portion of the property, and the buildings and structures standing on the land respectively. Hence, the sum of the two results represents the market value of the property as a whole.

For identification purpose only

– 29 –

APPENDIX III

VALUATION REPORT

In the valuation of the land portion, reference has been made to the sales evidence as available to us in the neighbourhood, and the standard land price in similar locations of Shenzhen.

In the valuation of the building portion, while we are applying the DRC approach, we identified a portion which is presently subject to a third party lease. We have valued the property interests in respect of Factory C by income method by which the amount of rent payable on the valuation date was capitalized for the residual period of the tenancy with due allowance for reversionary interest of this portion after expiry of the existing tenancy. Capitalization of full market rent or market value would be applied after the current lease expires. The comparison method is also adopted to obtain the full market rental values.

In the valuation of the buildings and structures on DRC approach, we were advised that the real estate title certificates have not been issued by the related Real Estate Administrative Bureau. In the absence of further information, we accordingly do not take into account the value of the buildings and structures, which were existing on site at the time of our inspection.

Our valuation has been made on the assumption that the owner sells the property in the open market in its existing state without the benefit of deferred term contract, leaseback, joint venture, management agreement or any similar arrangement which would serve to increase the value of the property. In addition, we do not take into account any option, or right of pre-emption concerning or affecting the sale of the property and the possibility of forced sale situation in our valuation.

In valuing the land portion, we have assumed that the owner has free and uninterrupted right to use, occupy or assign the property interest for the whole of the unexpired term of the land use rights. Furthermore, we have also assumed that all consents, approvals and licences from the relevant PRC government authorities for development of the property interests were granted without onerous conditions or delay.

In the course of our valuation, we have not caused title searches to be made for the property interests at the relevant government bureau in the PRC. However, we have been provided with extracts of title documents relating to the property interests. We have not, however, searched the original documents to verify the ownership, encumbrances or existence of any subsequent amendments which do not appear on the copies handed to us. All documents have been used for reference only. All dimension, measurements, and areas included in the valuation certificate are based on information contained in the documents provided to us by the Company and therefore are only approximations.

We have relied to a very considerable extent on the information provided by the instructing party at the present and at our last valuation and have accepted advice given to us on such matters as planning approval, statutory notice, easement, tenure, particulars of occupation, site and floor areas, and all other relevant matters which can affect the value of the property.

We have not carried out investigations on site to determine the suitability of ground conditions and services etc. for any future development, nor have we undertaken any ecological or environmental surveys. Our valuation is prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period.

– 30 –

APPENDIX III

VALUATION REPORT

We have had no reason to doubt the truth and accuracy of the information provided to us by the Company. We were also advised by the Company that no material factors have been omitted from the information to reach an informed view, and have no reasons to suspect that any material information has been withheld.

We have relied on a copy of Real Estate Ownership Certificate (Document No. 05000050543) and Land Use Rights Contract in respect of the title and legal particulars of the property interests. However, no investigations have been made to verify or to ascertain the existence of any amendments, or departures which may not appear on the copies handed to us. In the absence of original documents to show the title of the property interests, we have been instructed to rely on this document and the information given by the instructing party regarding the title of the property. Meanwhile, we have relied on four copies of Legal Opinion dated 21 May 2006, 29 November 2007, 17 March 2009 and dated 28 January 2010 prepared by Guangdong Guang He Law Firm.

As per our last report, we made a site inspection on 2 March 2009 and no further inspection has been arranged for this report. The particulars of our last inspection were detailed in the attached valuation certificate, in respect of which we have been provided with such information as we have required for the purpose of our valuation.

No allowance has been made in our valuation for any charges, mortgages or amount owing on the property interest nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the interest is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its value.

Unless otherwise states, all monetary figures stated in this report are in Renminbi (RMB).

In this valuation, we have complied with all the requirements contained in Chapter 8 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited issued by The Stock Exchange of Hong Kong Limited, and the HKIS Valuation Standards on the Properties (1st Edition) published by the Hong Kong Institute of Surveyors and effective from 1 January 2005.

Our valuation certificate is hereby enclosed.

Yours faithfully, For and on behalf of Ascent Partners Transaction Service Limited Andy Wu Director FRICS FHKIS RPS

Note: Mr. Andy Wu is a chartered valuation surveyor, and a registered professional surveyor and has practised real estate valuation of properties in Hong Kong and the People’s Republic of China for over 20 years.

Encl.

– 31 –

APPENDIX III

VALUATION REPORT

VALUATION CERTIFICATE

Property

Description and tenure

Capital value in existing state as Particulars of occupancy at 8 December 2009

An industrial complex located on Site No. A724-0014, Shuitian Village, Shiyan Town, Bao’an District, Shenzhen, Guangdong Province, the People’s Republic of China

The property comprises an industrial complex having a site area of approximately 190,234.1 square metres, or approximately 2,047,728.74 square feet.

From our previous site inspection, some buildings and structures were found. The particulars are outlined in the attached notes here below.

We were advised that the existing buildings and structures erected on site are owner occupied except an industrial block which is currently subject to a third party lease with particulars as set out in the attached notes.

No Commercial Value

The property has been granted under Real Estate Ownership Certificate and Land Use Rights Grant Contract with a land use right for a term of 50 years from 26 July 2001 to 25 July 2051for industrial use.

The Real Estate Title Certificate for the existing buildings and structures were not available.

As per the Real estate Ownership Certificate, the property was subject to the restriction which cannot be freely assigned, and mortgaged, and may be leased according to the regulations.

In the absence of further information, we have assigned no commercial value to the existing built on structures. However for indicative purposes, we would advise our estimated value of the structures from the depreciated cost approach in the attached notes.

Notes:

According to a copy of Real Estate Ownership Certificate and Land Use Rights Grant (Document No. 5000050543) dated 22 August 2001, the property was granted with a land use right for a term of 50 years from 26 July 2001 to 25 July 2051 for industrial use.

The particulars of the land grant are as below:

(a) Location

Shuitian Village, Bao’an District, Shiyan Town

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APPENDIX III

VALUATION REPORT

(b) Interest holder 深圳矽感光電有限公司 (SYSCAN Optoelectronics Technology (Shenzhen) Co., Ltd.)*
(c) Use Industrial
(d) Land Area 190,234.1 square metres

The documents did not indicate the plot ratio, site coverage, and other development parameters. From a copy of the Construction Land Use Planning Permit, the indicative plot ratio is prescribed for 0.66. We have been advised by the instructing party that the plot ratio could be enlarged to 2.5. However, in the absence of documentary support for the increased plot ratio nor the details for the premium required for the modification, we take into account the original plot ratio of 0.66 in arriving at our valuation.

The particulars of the existing identifiable structures from inspection together with the information supplied by the Company are as below:

Designation Occupancy Status Number of storey Factory A Owner occupied 2 Factory C Tenanted occupied 2 Office A Owner occupied 2 Office B Owner occupied 2 Staff Quarter Owner occupied 4 Canteen Owner occupied 2 Total	Estimated Area (sq. m.) 8,092.23 8,092.23 608.02 608.02 3,020.33 2,519.95
	22,940.78

As advised, Factory C is currently subject to a third party lease at a monthly rent of RMB69,086.25 for a term of 4 years from 1 November 2006 to 31 December 2010.

Pursuant to the Real Estate Ownership Certificate, the property is restricted for transfer and mortgage.

As per the construction completion acceptance permits, the structures were completed in 2002. While inspection, we also identified the following construction works which had ceased.

Recent enquiry showed that the works have not restored:

A 4 storey industrial block with completed building frame and
A site which is designed for another industrial block with some uncompleted foundation works and we were advised that the works also temporarily ceased.

Meanwhile, we also identified the following single storey structures close to Factory C and Office A as below:

Single storey temporary warehouse for storing building materials
Single storey electricity distribution rooms
Single temporary quarters for the construction workers.

Except the electricity distribution rooms, we were told that the temporary structures would be demolished upon completion of all construction works.

As advised by the owner, the total development expenditure for the existing constructions incurred up to the present is in the region of HK$141,134,000.

We have been recently updated that the existing physical status remained unchanged at the time of this valuation.

For identification purpose only

– 33 –

APPENDIX III

VALUATION REPORT

As per the updated Legal Opinion concerning the legal status of the property, some essentials of the title are summarized as below:

Status of Land

The current registered owner of the property is Shenzhen SYSCAN Optoelectronics Co., Ltd. The owner is under the concessionary grant, that is, the grant of land use right with concessionary land price or premium subject to certain restrictions including but not limited to restrictions of transfer and assignment. The restrictions would be removed if the owner pays back the price difference between the current market value of the property and the historical value of the property as of the granting of land use right.
There are no records showing any charges, or sealed order currently registered against the property.

Status of Building

The registration of title has not been completed for the buildings. Thus, the buildings would be subject to the restriction for transfer or disposal in the open market.

Since the buildings have been used and occupied for some time, the buildings probably have been awarded the completion acceptance permits and fire resistance acceptance permits. Securing these permits would allow the owner to mortgage and lease the properties.

Status of Lease

Leasing of the properties would need to comply with some stipulations such as settlement of land premium, receipt of completion acceptance permits and fire resistance permits, etc. Since the lease (details as shown in the above) has been registered, it is legally valid.

We have been recently updated that the existing legal and occupancy status remained unchanged at the time of this valuation.

According to the title status of the property, we have assigned no commercial value to the property taking into account its restriction for free transfer, lease, and mortgage in the open market.

For indicative purposes and according to your instruction to provide our opinion of market value of the property on the assumption that the property is built to a plot ratio of 0.66, and free of further encumbrances, and could be freely assigned, transferred, mortgaged, and leased in the open market as at the date of the valuation was RMB210,000,000.00.

The documentary support of the property is mainly sought from our information obtained from our last valuation and is summarized as below:

Real estate Ownership Certificate	available
Land Use Right Grant Contract	available
Land Planning Permit	available
Completion Acceptance Permits	advised available by Legal Opinion
Fire Resistance Acceptance Permits	advised available by Legal Opinion

As advised by the instruction party, the current property interest holder, 深圳矽感光電有限公司 (SYSCAN Optoelectronics Technology (Shenzhen) Co., Ltd*) is 45% owned by the Company.

We have been recently updated that the existing title ownership status remained unchanged at the time of this valuation.

We are further of the opinion that our valuation remained the same as at 31 December 2009.
For identification purpose only

– 34 –

APPENDIX IV

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this circular is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this circular misleading; and (3) all opinions expressed in this circular have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

2. DISCLOSURE OF INTERESTS

(a) Interests or Short Positions of Directors and Chief Executive in the Share Capital of the Company and Its Associated Corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, debentures or underlying shares of the Company or any of their associated corporations (within the meaning of Part XV of the SFO) which had 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 were taken or deemed to have under such provisions of the SFO) or which were required pursuant to section 352 of the SFO, to be entered in the register referred therein or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by directors, to be notified to the Company and the Stock Exchange were as follows:

Long position in Shares

		Number of Shares	Number of Shares	held
	Personal	Family	Corporate		% of
Name	Interest	Interest	Interest	Total	Interest
Mr. Cheung Wai	848,112,045	–	–	848,112,045	40.80%
(Note)

Note: There were no debt securities nor debentures issued by the Group as at the Latest Practicable Date.

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APPENDIX IV

GENERAL INFORMATION

Long positions in underlining shares of the Company (Share options granted to the Directors and Chief Executive)

			Number of
			share options
			held as at
			the Latest
Name	Date of grant	Exercise price	Practicable Date	Exercise Period
Mr. Cheung Wai	19 June 2000	HK$0.44	3,750,000	19 June 2001 to
				18 June 2010
Mr. Cheung Wai	13 August 2008	HK$0.06	15,000,000	13 August 2009 to
				12 August 2018
Mr. Frank Cheung	10 November 2009	HK$0.1026	15,000,000	10 November 2010 to
				9 November 2019
Mr. Ma Jun	10 November 2009	HK$0.1026	20,000,000	10 November 2010 to
				9 November 2019

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any interest or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the required standards of dealing by directors of the Company as referred to in Rules 5.46 to 5.67 of the GEM Listing Rules.

– 36 –

APPENDIX IV

GENERAL INFORMATION

(b) Persons Who have an Interest or Short Position Which Is Discloseable Under Divisions 2 and 3 Of Part XV of the SFO and Substantial Shareholders

As at the Latest Practicable Date, so far as is known to the Directors or chief executive of the Company, the following persons, other than a Director or chief executive of the Company, had an interest or a 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, or, who are expected, directly or indirectly, to be 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 the Company:

Long position in Shares

		Nature	Number	% of issued
Name	Capacity	of interest	of Shares	share capital
Mr. Cheung Wai	Beneficial	Personal	848,112,045	40.80%
(Note)	Owner

Note: Details of the interests of Mr. Cheung Wai are duplicated in the section “DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS” disclosed above.

3. SERVICE CONTRACTS

None of the Directors has or proposes to have a service agreement with any member of the Group which is not expiring or determinable by such member within one year without payment of compensation (other than statutory compensation).

4. OTHER INTERESTS OF DIRECTORS

(i) As the Latest Practicable Date, the Directors are Mr. Cheung Wai, Mr. Frank Cheung, who are executive Directors, and Mr. Fong Chi Wah, Mr. Jin Qingjun and Mr. Wang Ruiping, who are independent non-executive Directors.
(ii) As the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.
(iii) As at the Latest Practicable Date, so far as the Directors are aware of, none of themselves or the management shareholders (as defined in the GEM Listing Rules) of the Company or their respective associates had interest in a business which competes or may compete with the business of the Group or any other conflicts of interest with the Group.

– 37 –

APPENDIX IV

GENERAL INFORMATION

(iv) As at the Latest Practicable Date, none of the Directors, Cachet Certified Public Accountants Limited, Ascent Partners Transaction Service Limited and Guangdong Guang He Law Firm has any interests, either direct or indirect, in any assets which have been acquired or disposed of or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2008, being the date to which the latest published audited financial statements of the Company were made up.

5. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and there was no litigation or claims of material importance known to the Directors to be pending or threatened by or against any member of the Group.

6. EXPERTS

The following is the qualification of the experts who have given opinions or advice which are contained in this circular.

Name	Qualification
Cachet Certified Public	Certified Public Accountants
Accountants Limited
Ascent Partners Transaction	Independent Property Valuer
Service Limited
Guangdong Guang He Law Firm	PRC Legal Adviser

As at the Latest Practicable Date, Cachet Certified Public Accountants Limited, Ascent Partners Transaction Service Limited and Guangdong Guang He Law Firm have given and have not withdrawn their consents to the issue of this circular with the inclusion of their reports/letters and references to their names, as the case may be, in the form and context in which they appear.

As at the Latest Practicable Date, Cachet Certified Public Accountants Limited, Ascent Partners Transaction Service Limited and Guangdong Guang He Law Firm did not have any shareholding in any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group.

7. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors, or the management Shareholders, or their respective associates had any interests in any business which competes or may compete with the business of the Group pursuant to Rule 11.04 of the GEM Listing Rules.

– 38 –

APPENDIX IV

GENERAL INFORMATION

8. MATERIAL CONTRACTS

There have been no material contracts (not being contracts entered into the ordinary course of business of any member of the Group) within the two years preceding the date of this circular.

9. MISCELLANEOUS

(a) The company secretary of the Company is Mr. Fung Kwok Leung. Mr. Fung holds an Honours Degree in Accountancy from the Hong Kong Polytechnic University and is a fellow member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants.
(b) The compliance officer of the Company appointed pursuant to Rule 5.19 of the GEM Listing Rules is Mr. Cheung Wai. Mr. Cheung holds a bachelor degree in electronic engineering from China Central Institute of Technology in the PRC.
(c) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton, HM 12, Bermuda. The principal place of business and head office of the Company in Hong Kong is situated at Unit C, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong.
(d) The branch share registrar and transfer office of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
(e) In the event of inconsistency, the English text of this circular and the form of proxy shall prevail over the Chinese text.
(f) The Company established an audit committee on 2 May 2000 with written terms of reference in compliance with Rule 5.28 of the GEM Listing Rules. The duties of the audit committee include (1) reviewing, in draft form, the Company’s annual report and accounts, half-year report and quarterly reports and providing advice and comments thereon to the Board; and (2) reviewing and supervising the Company’s financial reporting and internal control procedures. The audit committee comprises three independent non-executive Directors, namely, Messrs. Fong Chi Wah, Jin Qingjun and Wang Ruiping. The chairman of the audit committee is Mr. Fong Chi Wah. Further details of the members of the audit committee are set out below:

Mr. Fong Chi Wah , aged 48, is a Certified Practising Accountant (Australia), a Chartered Financial Analyst, a member of the Institute of Certified Management Accountants, Australia and a member of the Hong Kong Institute of Directors. Mr. Fong has over 21 years of extensive experience in various sectors of financial industry, including direct investment, project and structured finance, and capital markets with focus on the PRC and Hong Kong. Mr. Fong was previously a director of Baring Capital (China)

– 39 –

APPENDIX IV

GENERAL INFORMATION

Management Limited and held various management positions in ING Bank. Mr. Fong was also an executive director of Grand Investment International Limited, a company listed on the Stock Exchange. Mr. Fong is currently an executive director of National Investments Fund Limited, a company listed on the Stock Exchange.

Mr. Fong holds a bachelor’s degree in management science (economics) from Lancaster University, United Kingdom, a master’s degree in business administration from Warwick University, United Kingdom, a master’s degree in investment management from the Hong Kong University of Science and Technology and a master’s degree in practising accounting from Monash University, Australia.

Mr. Jin Qingjun , aged 52, is currently a partner of King & Wood, solicitors and attorneys in PRC. He has over 20 years of rich experience in the fields of finance, securities, investment, intellectual property, real estate, corporate, maritime, insolvency and litigation as well as foreign investment related areas. Mr. Jin was the founder and Managing Partner of Shu Jin & Co., solicitors and attorneys in PRC. He has previously worked as Attorney for C & C Law Office in PRC, as Foreign Attorney for Clyde & Co., British solicitors, and Johnson Stokes & Master, solicitors in Hong Kong. Presently, Mr. Jin acts as legal consultant for various financial institutions, securities companies, listed companies and overseas corporations such as the World Bank Group International Finance Corporation. He is now also acting as independent director of two listed in the PRC namely Success Information Industry (Group) Stock Co., Ltd. (成功信息產業（集團）股份有限公司), a company listed on the Shenzhen Stock Exchange and China United Travel Stock Co., Ltd. (國旅聯合股份有限公司), a company listed on the Shanghai Stock Exchange. He is also an independent director of a sino-US investment management firm, namely INVESCO Great Wall Securities Fund Management Co., Ltd. (景順長城基金管理有限公司). Mr. Jin is one of the first lawyers who was granted the license to advise on securities transactions in PRC. He holds a bachelor’s degree in English from Anhui University and a master degree of Laws in International Laws from China University of Political Science & Law. He is the Adjunct Professor of China University of Political Science & Law, and an Arbitrator of China International Economic and Trade Arbitration Commission and Shenzhen Arbitration Commission. Mr. Jin is also a member of various law societies and associations namely China Law Society, China International Law Association, China Maritime Law Association, D.C. Bar of the United States of America, WTO Committee of All China Lawyers Association and Inter Pacific Bar Association.

Mr. Wang Ruiping , aged 47, is a managing director of TDR Capital International Limited and an independent non-executive director of China Huali Holding Limited since March 2003, a company listed in Shenzhen stock exchange. Mr. Wang has over 15 years of investment banking and investment management experience. He also has profound experience of investments in China via listings on domestic and foreign stock exchanges. He has previously

– 40 –

APPENDIX IV

GENERAL INFORMATION

worked as executive director of Softbank Investment International (Strategic) Limited, vice president of Greater China Investment Banking of Deutsche Bank and assistant director of Standard Chartered (Asia) in charge of investment banking business in mainland China. Mr. Wang was working for China International Trust and Investment Corporation before joining Standard Chartered Asia Limited. Mr. Wang holds a master degree in Economics from Nankai University of China.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any weekday, other than public holidays at the principal place of business and head office of the Company in Hong Kong at Unit C, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong from the date of this circular up to and including 12 March 2010:

the memorandum of association and bye-laws of the Company;
the Share Transfer Agreement;
the written consents of Cachet Certified Public Accountants Limited, Ascent Partners Transaction Service Limited and Guangdong Guang He Law Firm referred to in the paragraph headed “Experts” in this Appendix IV;
the property valuation report prepared by Ascent Partners Transaction Service Limited, the text of which is set in Appendix II to this circular and the legal opinion prepared by Guangdong Guang He Law Firm;
the audited financial statements of the Group for the two years ended 31 December 2008; and
this circular.

– 41 –

NOTICE OF SPECIAL GENERAL MEETING

==> picture [41 x 47] intentionally omitted <==

**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “ SGM ”) of SYSCAN Technology Holdings Limited (the “ Company ”) will be held at Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Friday, 12 March 2010 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following ordinary resolution:

ORDINARY RESOLUTION

“ THAT the share transfer agreement (the “ Share Transfer Agreement ”) dated 8 December 2009 entered into between SYSCAN Holdings Limited and Build Up Capital Company Limited pursuant to which SYSCAN Holdings Limited agreed to sell and Build Up Capital Company Limited agreed to purchase from SYSCAN Holdings Limited 22,500 shares of US$1 each in SYSCAN Manufacturing Limited, representing 45% of the entire issued share capital of SYSCAN Manufacturing Limited and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified and THAT the directors of the Company be and are hereby authorized to do all such acts and things, take all steps and execute all further documents which in their opinion may be necessary, desirable or expedient for the purpose of giving effect to and/or implementing the transactions contemplated under the Share Transfer Agreement.”

By Order of the Board of SYSCAN Technology Holdings Limited Cheung Wai Chairman

Hong Kong, 8 February 2010

Principal place of business and head office in Hong Kong: Unit C, 21/F, Seabright Plaza 9-23 Shell Street North Point, Hong Kong

* For identification purpose only

– 42 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

A member of the Company entitled to attend and vote at the SGM is entitled to appoint another person as his proxy to attend and, in the event of a poll vote in his stead. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the SGM. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which such proxy is so appointed. A proxy need not be a member of the Company, but must attend in person to represent the member.
In order to be valid, the form of proxy must be deposited at the principal place of business and head office of the Company in Hong Kong at Unit C, 21/F, Seabright Plaza, 9-23 Shell Street, North Point, Hong Kong together with the power or attorney or other authority (if any) under which it is signed or a notarially certified copy of such power of attorney or authority, not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof.
Where there are joint holders of any share, any one of such persons may vote at the SGM either personally or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at the SGM personally or by proxy, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of such joint holding.
4 A form of proxy for use in connection with the SGM is enclosed. Completion and delivery of the form of proxy will not preclude a member from attending and voting in person at the SGM if the member so desires and in such event, the instrument appointing a proxy shall be deemed to be revoked.

– 43 –

AI assistant

Youzan Technology Limited — Proxy Solicitation & Information Statement 2010

51261_rns_2010-02-08_b780dd05-febd-472a-b6ae-8578cd5d6d04.pdf

SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF 45% SHAREHOLDING INTEREST IN SYSCAN MANUFACTURING LIMITED

SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF 45% SHAREHOLDING INTEREST IN SYSCAN MANUFACTURING LIMITED

1. INTRODUCTION

2. THE SHARE TRANSFER AGREEMENT AND THE LOAN AGREEMENT

A. Major terms of the Share Transfer Agreement

Parties:

Shares to be disposed of:

Consideration:

(a) Loan Consideration

(b) Cash Consideration

Conditions precedent:

(A) Conditions Precedent to the Purchaser’s obligations

Completion

Guarantee Agreement

B. Major terms of the Loan Agreement

Parties:

Loan Amount:

Term:

Interest:

Repayment:

Security:

(A) Share Pledge

(B) Letter of Undertaking

3. REASONS FOR AND BENEFITS OF THE DISPOSAL

4. USE OF PROCEEDS

5. INFORMATION ABOUT THE GROUP

6. INFORMATION ABOUT SYSCAN MANUFACTURING AND SYSCAN OPTOELECTRONICS

7. FINANCIAL EFFECT OF THE DISPOSAL

8. INFORMATION ABOUT THE PURCHASER

9. LISTING RULES IMPLICATIONS

10. FINANCIAL AND TRADING PROSPECT OF THE GROUP

11. RECOMMENDATION

12. ADDITIONAL INFORMATION

1. INDEBTEDNESS

Borrowings

Contingent liabilities

Commitments

Disclaimers

No material changes

2. WORKING CAPITAL

3. MATERIAL CHANGE

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

1. INTRODUCTION

2. UNAUDITED PRO FORMA COMBINED STATEMENT OF COMPREHENSIVE INCOME OF THE GROUP

3. UNAUDITED PRO FORMA COMBINED STATEMENT OF FINANCIAL POSITION OF THE GROUP

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF CASH FLOWS OF THE GROUP

Dear Sirs,

Respective responsibilities of directors of the Company and the reporting accountants

Basis of opinion

Opinion

CACHET CERTIFIED PUBLIC ACCOUNTANTS LIMITED

SYSCAN Technology Holdings Limited

VALUATION CERTIFICATE

Property

Description and tenure

Status of Land

Status of Building

Status of Lease

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Interests or Short Positions of Directors and Chief Executive in the Share Capital of the Company and Its Associated Corporations

Long position in Shares

3. SERVICE CONTRACTS

4. OTHER INTERESTS OF DIRECTORS

5. LITIGATION

6. EXPERTS

7. COMPETING INTEREST

8. MATERIAL CONTRACTS

9. MISCELLANEOUS

10. DOCUMENTS AVAILABLE FOR INSPECTION

SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]

NOTICE OF SPECIAL GENERAL MEETING

ORDINARY RESOLUTION

More from Youzan Technology Limited

Youzan Technology Limited Proxy Solicitation & Information Statement 2010

**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**

**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**

**SYSCAN Technology Holdings Limited 矽感科技控股有限公司[*]**