Major Shareholder:

• Mr. Siu Paul Y. alias and his wife - 75.0% interests

Company Subsidiaries:

• Datronic (HK). Ltd (100%): Manufacturing and selling of electronic components
• Datronic (Shunde) Ltd (100%): Manufacturing of electronic components
• Pulse Tek Trading Ltd (100%): Trading of electronic components
• Century Electronics Trading Ltd (100%): Trading of electronic components
• Datamax Ltd (100%): Trading of electronic components
• Datatronic Distribution (100%): Trading of electronic components

The Group is principally engaged in the design, manufacturing and sale of magnetic commonly used in consumer electronic, telecommunication equipment, data processing appliances and other electronics systems for coupling, isolation, filtering, interfacing and timing control applications. All of the Group 's products are customized magnetics are sold under its own brand name "Datronic". A majority of the Group 's products are customized magnetics tailored-made according to the requirement and specifications of its customers.

The Group focused on the high-end segment of he magnetics industry. It has a customer base of about 300 customers comprising manufacturers of telecommunication and data processing equipment, technology equipment, motor vehicles, military, aerospace and medical equipment.

The headquarter of the Group are located in Hong Kong where the overall co-ordination and administrative functions are conducted. The Group has production facilities in Hong Kong and Shunde, the PRC. It has subsidiaries in the US and France to handle sale and marketing activities in the UIS and Europe respectively.

The Group has business relationships with more than 90 suppliers. For the year ended 31^st December 2000, purchases from the top five suppliers represented about 28.2% of the Group 's total purchases. For thee year ended 31^st December 2000, the Group 's purchases of materials from its largest supplier accounted for about 8.9% of the Group 's total purchases. The Group has established business relationship with its five largest suppliers ranging from 5 to 21 years.

The principal raw materials used by the Group in the manufacturing of its products include high frequency ferrites, powder iron cores, magnet wires, epoxy and bobbins. These raw materials are mainly sourced form the US, Europe and Asia.

The Directors expect that the market for magnetic products will remain strong in the foreseeable future. In view of the increasing demand from the telecommunications and data processing industries, as well as from the military and aerospace, the Directors believe that sales of the Group 's products will increase in the forthcoming months of the year.

The rapid development in technology has created substantial demand for magnetic components and magnetic modules in the telecommunications and data processing appliance industries. In order to enhance its sale and market position and to remain competitive in the magneicts industry, the Group will continue to commit resources to product development. To this end, the Group plans to recruit 3 staff to strengthen its research and development capability and to develop new series of magnetics to expand its range of products.

The Group intends to expand its sales and marketing operations by recruiting 3 sales personnel. The Directors consider that expanded sales and marketing team will strengthen the promotion of the sales of the Group and the capability to collect valuable information on customers ' requirement and market movements.

The Group plans to expand its production capacity by setting up new production facilities for different types of magnetic products. Construction of new factory premises and dormitory buildings in Shunde, the PRC adjacent to the existing production facilities of the group is scheduled to commence in September 2001 and be completed in mid-2002. It is proposed that the new factory premises will have a total gross floor area of about 150,000 sq.ft. The Group intends to recruit about 3,000 additional workers for two shifts of operations.

The net proceeds from the Share, after deduction of expenses payable by the Company, are estimated to amount to approximately HK$68.0 million. The Group at present intends to apply the net proceeds as follows: