首 長 四 方 ( 集 團 ) 有 限 公 司 * SHOUGANG CONCORD GRAND (GROUP) LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 730)

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. 首 長 四 方 ( 集 團 ) 有 限 公 司 * SHOUGANG CONCORD GRAND (GROUP) LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 730) MAJOR TRANSACTION FINANCE LEASE ARRANGEMENT WITH JINLI AUTO PARTS On 15 April 2014, South China Leasing, an indirect wholly-owned subsidiary of the Company, entered into the Finance Lease Arrangement with Jinli Auto Parts pursuant to which South China Leasing has agreed to purchase the Equipment from Wostom Automation and on-lease it to Jinli Auto Parts for a term of 5 years. The Finance Lease Arrangement comprises primarily of two agreements: the Equipment Purchase Agreement and the Lease Agreement. The transaction contemplated under the Lease Agreement will constitute a transaction under Chapter 14 of the Listing Rules. As one of the applicable percentage ratios under Rule of the Listing Rules in respect of the transaction contemplated under the Lease Agreement is more than 25% but less than 100%, the Lease Agreement constitutes a major transaction for the Company and is subject to the approval of the Shareholders in a general meeting. A circular containing, among other things, details of the Finance Lease Arrangement and the notice convening the special general meeting of the Company will be despatched to the Shareholders on or before 12 May On 15 April 2014, South China Leasing, an indirect wholly-owned subsidiary of the Company, entered into the Finance Lease Arrangement with Jinli Auto Parts pursuant to which South China Leasing has agreed to purchase the Equipment from Wostom Automation and on-lease it to Jinli Auto Parts for a term of 5 years. The Finance Lease Arrangement comprises primarily of two agreements: the Equipment Purchase Agreement and the Lease Agreement. (1) EQUIPMENT PURCHASE AGREEMENT Date of the Equipment Purchase Agreement 15 April

2 Parties to the transaction Purchaser: Supplier: Ultimate User: South China Leasing, an indirect wholly-owned subsidiary of the Company which is principally engaged in the business of finance leasing in the PRC; Wostom Automation, a company established in the PRC which is principally engaged in the research and development, production, sales and services of control system of industrial automation instrumentation; and Jinli Auto Parts, a company established in the PRC which is principally engaged in the business of design, manufacture and sale of automobiles, auto parts and components, as well as design, reform, maintenance and trading of machineries. To the best of the Directors knowledge, information and belief, and having made all reasonable enquiry, each of Wostom Automation and Jinli Auto Parts and their ultimate beneficial owners are third parties independent of the Company and its connected persons. Consideration for the purchase of the Equipment The consideration for the purchase of the Equipment is RMB150,670,000 (equivalent to HK$188,337,500), which was determined by the parties after arm s length negotiations with reference to the prevailing market prices of similar products available in the PRC. The consideration will be paid as to RMB120,000,000 (equivalent to HK$150,000,000) by South China Leasing and as to RMB30,670,000 (equivalent to HK$38,337,500) by Jinli Auto Parts. Reason for entering into the Equipment Purchase Agreement South China Leasing agreed to purchase the Equipment from Wostom Automation and onlease it to Jinli Auto Parts. Condition of the Equipment Purchase Agreement The Equipment Purchase Agreement is subject to the Lease Agreement becoming effective. (2) LEASE AGREEMENT Date of the Lease Agreement 15 April

3 Parties to the transaction Lessor: Lessee: South China Leasing; and Jinli Auto Parts. Subject of the transactions Pursuant to the Lease Agreement, South China Leasing will lease the Equipment to Jinli Auto Parts for a term of 5 years, which will commence on the second business day after the fulfilment of the condition of the Lease Agreement. Condition of the Lease Agreement The Lease Agreement is subject to the approval by the Shareholders in accordance with the requirements of the Listing Rules. Lease payments The principal amount under the Lease Agreement is RMB120,000,000 (equivalent to HK$150,000,000). Jinli Auto Parts will pay its lease payments on a quarterly basis with the interest rate for the lease calculated at 30% over the 5-year base lending rate announced by the People s Bank of China. Based on the current 5-year bank lending rate of 6.40% per annum, the annual interest rate of the lease as at the date of the execution of the Lease Agreement is 8.32%. The annual interest rate will be subject to adjustments from time to time in accordance with the changes in the base lending rate. South China Leasing is also entitled to a lease handling fee of RMB1,800,000 (equivalent to HK$2,250,000), payable by Jinli Auto Parts in one lump sum prior to the commencement of the lease term. The lease payments have been agreed between the parties after arm s length negotiations with reference to the prevailing market rates. Guarantees and Security 姜 土 金 先 生 (Mr. Jiang Tujin*) and 趙 社 進 先 生 (Mr. Zhao Shejin*), who are respectively interested in 60% and 40% of Jinli Auto Parts, will each provide a personal guarantee in favour of South China Leasing on the obligations of Jinli Auto Parts under the Lease Agreement. Laopantou Food, a company which Mr. Jiang Tujin and Mr. Zhao Shejin are interested in 60% and 40% respectively, will pledge Building No. 11 of the Exhibition Centre located at 金 沙 園 長 泰 路 (Jinsha Park Changtai Road), Sha County, San Ming City, Fujian, the PRC with a gross floor area of 7, square meters together with the basement of Building Nos. 11 and 12 of the Exhibition Centre with a gross floor area of 11, square meters as security under the Lease Agreement. In addition, Laopantou Food has provided a corporate guarantee in favour of South China Leasing in respect of the obligations of Jinli Auto Parts under the Lease Agreement. 3

4 Lessee s option to purchase At the end of the lease term of the Lease Agreement, Jinli Auto Parts will have the right to purchase the Equipment at a nominal purchase price of RMB30,000 (equivalent to HK$37,500). REASONS FOR THE FINANCE LEASE ARRANGEMENT The Company is an investment holding company and its subsidiaries are principally engaged in the provision of financial services and property investment and management. The entering into of the Finance Lease Arrangement is in the ordinary and usual course of business of South China Leasing and will enable South China Leasing to earn an aggregate finance lease income of approximately RMB6,543,970 (equivalent to approximately HK$8,179,960), being the aggregate of the lease handling fee of RMB1,800,000 (equivalent to HK$2,250,000) plus the net finance interest income of approximately RMB4,743,970 (equivalent to approximately HK$5,929,960) over the 5-year lease term. Given that the Finance Lease Arrangement is entered into in the ordinary and usual course of business of South China Leasing and are under normal commercial terms, the Directors are of the view that the terms of the Finance Lease Arrangement are fair and reasonable and are in the interests of the Company and the shareholders of the Company as a whole. GENERAL The transaction contemplated under the Lease Agreement will constitute a transaction under Chapter 14 of the Listing Rules. As one of the applicable percentage ratios under Rule of the Listing Rules in respect of the transaction contemplated under the Lease Agreement is more than 25% but less than 100%, the Lease Agreement constitutes a major transaction for the Company and is subject to the approval of the Shareholders in a general meeting. A circular containing, among other things, details of the Finance Lease Arrangement and the notice convening the special general meeting of the Company will be despatched to the Shareholders on or before 12 May DEFINITIONS In this announcement, unless the context otherwise requires, the following terms shall have the following meanings: Company connected person(s) Director(s) Shougang Concord Grand (Group) Limited, a company incorporated in Bermuda with limited liability whose securities are listed on the main board of the Stock Exchange; has the meaning ascribed to it under the Listing Rules; the directors of the Company; 4

5 Equipment Equipment Purchase Agreement Finance Lease Arrangement HK$ Hong Kong Jinli Auto Parts Laopantou Food Lease Agreement Listing Rules PRC RMB Shareholder(s) South China Leasing Stock Exchange Wostom Automation a batch of manufacturing equipment and production lines for the production of auto parts and components; the agreement dated 15 April 2014 between South China Leasing, Jinli Auto Parts and Wostom Automation, pursuant to which South China Leasing has agreed to purchase the Equipment from Wostom Automation; the purchase of the Equipment by South China Leasing and the lease of the Equipment to Jinli Auto Parts pursuant to the terms of the Equipment Purchase Agreement and the Lease Agreement; Hong Kong dollar, the lawful currency of Hong Kong; the Hong Kong Special Administrative Region of the PRC; 廈 門 金 立 摯 達 汽 車 零 部 件 有 限 公 司 (Xiamen Jinli Zhida Auto Parts Co., Ltd.*), a company incorporated in the PRC, the lessee of the Lease Agreement; 老 潘 頭 ( 福 建 ) 食 品 有 限 公 司 (Laopantou (Fujian) Food Co., Ltd.*), a company incorporated in the PRC; the agreement dated 15 April 2014 between South China Leasing and Jinli Auto Parts, pursuant to which South China Leasing has agreed to lease the Equipment to Jinli Auto Parts for a term of 5 years; the Rules Governing the Listing of Securities on the Stock Exchange; the People s Republic of China, which, for the purpose of this announcement, does not include Hong Kong, Macao Special Administrative Region and Taiwan; Renminbi, the lawful currency of the PRC; the holder(s) of the ordinary share(s) of HK$0.01 each in the share capital of the Company; 南 方 國 際 租 賃 有 限 公 司 (South China International Leasing Co., Ltd.), a company established in the PRC and an indirect wholly-owned subsidiary of the Company; The Stock Exchange of Hong Kong Limited; and 廈 門 華 世 通 自 動 化 科 技 有 限 公 司 (Xiamen Wostom Automation Technology Co., Ltd.*), a company incorporated in the PRC, the supplier of the Equipment. 5

6 Unless otherwise specified in this announcement, translations of RMB into HK$ are made in this announcement, for illustration only, at the rate of HK$1.00 to RMB0.80. No representation is made that any amounts in RMB or HK$ could have been or could be converted at that rate or at any other rate or at all. By Order of the Board Shougang Concord Grand (Group) Limited Li Shaofeng Chairman Hong Kong, 15 April 2014 As at the date of this announcement, the board of directors of the Company comprises Mr. Li Shaofeng (Chairman), Mr. Luo Zhenyu (Managing Director), Mr. Wang Tian (Deputy Managing Director), Mr. Yuan Wenxin (Deputy Managing Director), Mr. Leung Shun Sang, Tony (Non-executive Director), Mr. Tam King Ching, Kenny (Independent Non-executive Director), Ms. Zhou Jianhong (Independent Non-executive Director) and Mr. Yip Kin Man, Raymond (Independent Non-executive Director). * For identification purpose only 6