Major Shareholder:

• Mr. Chan Chung Yee, Hubert ¡V 47.4% interest
• Mr. Chan Chung Yin, Roy - 15.8% interest

Company Subsidiaries:

• Hong Kong Communications Co Ltd (100%): Sale and Distribution of mobile phones and office telephone systems in HK.
• HKCED (100%): Distribution of intercom telephone systems in HK
• SCE (HK) (100%): Sale and distribution of office telephone systems in Singapore
• GeneralVestor (100%): Property investments.

The Group is principally engaged in sale and distribution of "Nokia" and "Alcatel" branded mobile phones and related accessories as well as Nitsuko, NEC and Aiphone branded office telephone systems in Hong Kong and Singapore through its extensive distribution network. The Group also provides mobile phone network connection and repair and maintenance services and systems integration services to its customers.

In view of short product life cycle as well as changing consumer demands in the telecommunications market, the Group places a strong emphasis on product diversification and after-sale services. As at the Latest Practicable Date, the Group was one of the major authorized distributors of "Nokia" and "Alcatel" branded mobile phones in Hong Kong. The Group is also the sole authorized distributor of "Nitsuko" branded office telephone systems in Hong Kong and Singapore.

The Group also holds certain residential and non-residential properties in Hong Kong for investment. These properties are let to independent third parties and related parties for office, residential or warehouse uses.

It is expected that the demand for telecommunications equipment will be sustained by the rapid advancement in technology as major manufacturers are accelerating their pace to launch new products to replace the existing models. The launch of 3G network in 2002 will provide fuel for further growth of the Hong Kong mobile phone market.

Despite the high growth rate in the number of mobile phone subscribers in the PRC, the overall penetration rate of mobile phone subscribers in the PRC remains low with an average of 6.7%(85 million subscribers) in 2000.

Should the PRC succeed in joining the WTO, the Directors believe that the PRC will have to further open up the telecommunications market by gradually reducing the import duty and eventually driving the retail prices of mobile phones down, making them more affordable to the people in the PRC. The Directors believe that the continual opening up of and the increasing competition in the PRC telecommunications market will provide great business opportunities for the growth of the Group's business over the next few years.

The Directors believe that the Group has the following competitive advantages:

• The Group's ability to obtain distribution rights from leading mobile phone and office telephone system manufacturers such as Nokia, Alcatel, Nitsuko, NEC and Aiphone;
• The extensive distribution networks developed in Hong Kong with over 400 retail shops and chain-stores operators for mobile phone business and over 6000 customers for office telephone business;
• The Group's ability to line up with certain network operators in Hong Kong to offer mobile phone network connection services to their customers which generates sustained income for the Group;
• A tight credit control policy maintained by the Group to minimize the level of bad debts;
• The Group's ability to respond to changing market demands and to provide efficient and comprehensive after-sale services to its customers;
• The Group's strong management teams with extensive experience and professional knowledge in the telecommunications industry.

• The Group relies heavily on s small number of leading international mobile phone and office telephone system suppliers, namely, Nokia and Nitsuko.
• The Group's distribution business relies heavily on distribution agreements with mobile phone and office telephone system suppliers for the supply of mobile phones.
• The Group relies on certain major customers and Hong Kong retail market.
• The risk is related to the decrease in commission received from mobile phone network operators.
• Non inclusion of profit forecast.

In addition to PABX and keyline business, the Group also provides systems integration services such as computer networking, boardwiring and security systems in Hong Kong and the PRC. The Directors believe that the demand for systems integration services in the PRC will increase upon the PRC's accession into the WTO. With its extensive experience in systems integration and its broad client base, the Group plans to set up a joint venture in Shanghai, the PRC to engage in the provision of systems integration services in the PRC.

At present, most of the Group's existing clients are suing conventional telephone systems. With the development of IP and broadband technology, it is envisaged that new technologies such as VoIP, VPN and VP PBX will replace the conventional telecommunication system. To maintain its competitiveness, the Group will invest and engage in the research and development of IP technology in preparation for its entry into the IP market.

To further develop its distribution network, the Directors plan to set up more retail outlets throughout Hong Kong in the future and to establish its distribution channels in the PRC. The Directors also intend to transform the Group's existing retail outlets into chain-stores featuring mobile phones and related accessories as well as high-end products such as PDA, digital camera, computer peripherals and systems software, etc.

Apart form the PRC and Hong Kong market, the Group also intends to explore overseas markets, the Group intends to establish offices in the United Kingdom and the United States to distributes its own developed telecommunications and Internet related products.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$30.5 million (based on the offer price HK$0.50 per share). The Group at present intends to apply the net proceeds as follows: