Major Shareholder:

• Mr. Hung Fung, Terry � 67.4% interest

The Company is an investment company incorporated with limited liability as an exempted company in the Cayman Islands on 18th September 2001. The Company has not commenced operation or business since its incorporation.

At least 80% of the Company's assets will be invested in equity securities, convertible notes, preference shares, options, warrants or debt securities issued by listed and unlisted companies established and/or with business operations in the PRC and/or in Hong Kong, or other types of investments in accordance with the investment objectives and policies adopted by the Company from time to time and the requirements of the Memorandum, the Articles, the Listing Rules and the Interim Investment Management Agreement or the Investment Management Agreement (as the case may be).

The Directors are responsible for the approval of all investment decisions and the formulation of the Company's investment objectives and policies and in particular, all investment and divestment strategies and guidelines.

The investment objective of the Company is to achieve earnings in the form of medium term (i.e. for a term of more than 1 year) capital appreciation, and dividend and interest income from an investment portfolio comprising equity, equity-related and debt securities issued by enterprise established in or having significant operations or businesses in the PRC and /or Hong Kong.

The Company may from time to time also make up to 20% of its investments outside the PRC and HK should the Directors believe that such investment may provide attractive returns. The Company also intends to invest in unlisted companies with the potential to seek listing on the Stock Exchange or on other internationally recognized stock exchange in the short to medium term.

• The Company's income and its Net Asset Value may be adversely affected by external factors beyond the control of the Company. As a result, the Company's income and its Net Asset Value may go down as well as up, subject to, among other things, the prevailing market conditions.
• There is no assurance that such capital gains can be realized or that the requisite approvals can be obtained. The Company's investments in the PRC may therefore be illiquid.
• Unlike companies with core businesses, products or services, the Company may invest in companies engaging in a wide range of business. As a result, comparable securities may not be available for references as to the fair market value of the Shares.
• The Company has no business track record. The profit or value of the company is reliant on the expertise of the Directors and the respective directors of the Interim Manager and the Investment Manager and the performance of the investee companies.

As at 31st October, 2001, the Company has no outstanding mortgages, charges, debentures or other loan capital or bank overdrafts, loans or other similar indebtedness or hire purchase commitments of finance lease commitments or any guarantees of other material contingent liabilities. Since the Company has on outstanding indebtedness, the Directors are of the view that the Company has sufficient liquidity and financial resources to meet its capital expenditure requirements.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$26 million (based on the offer price HK$0.5per share). The Group at present intends to apply the net proceeds as follows: