Major Shareholder:

• Mr. Yip Man Fan and his wife - 63.75% interest

Company Subsidiary:

• Tanrich Futures Ltd (100%): Provision of agency and broking services in trading of Japanese commodity futures, US futures and options and Hong Kong financial futures.
• Tanrich Securities Company Ltd (100%): Provision of securities broking, margin financing and corporate finance services.
• Tanrich Finance Ltd (100%): Provision of personal loan financing services
• Tanrich Asset Management Ltd (100%): Distribution of unit trusts, mutual funds, insurance related products and provision of personal financial consulting and planning services.

The Group is engaged in the provision of a wide range of financial services in Hong Kong, with specialization in providing agency services in trading TGE Futures and TOCOM Futures. TGE Futures and TOCOM Futures are traded on the TGE and TOCOM respectively, which are two of the seven commodity exchanges in Japan where commodity exchanges in Japan where commodity futures are traded.

In addition, the Group provides broking services for HIS futures and rolling forex contracts traded on the Futures Exchange, securities listed on the Stock Exchange and derivative products including futures and options traded in the US. Apart from broking services, the Group also provides corporate finance services, share margin and personal loan financing services, distributes unit trusts and provides personal financial planning services to its customers. To a lesser extent, the Group carries out proprietary trading in HIS futures and rolling contracts traded on the Futures Exchange.

The Group was established in 1990 and in 1992. Tanrich Futures commenced to carry out the broking business of financial futures traded on the Futures Exchange, in November 1994, Tanrich Futures was recognized as a authorized overseas agent of both TGE and TOCOM and expanded its business to provides agency services to its clients to trade TGE Futures and TOCOM Futures.

The Directors believe that the Group has established a leading position in terms of transmission volume for trading TGE Futures in Hong Kong. During the three years ended 30th June 2001, the Group's transaction volume of TGE Futures accounted for approximately 58.4%, 83.5% and 90.8% of the total volume of the TGE Futures traded in Hong Kong for the three years respectively.

The Group has a broad customer base with approximately 900 futures client accounts which have utilized the Group's services in futures trading for the year ended 30th June 2001. For the three years ended 30th June 2001, the Group recorded a significant growth in the number of futures clients from approximately 500 accounts as at 30th June, 1999 to approximately 900 accounts as at 30th November 2001, representing a growth rate of approximately 80.0%.

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

• Its established position as a leading agent for trading TGE Futures in Hong Kong:
• Its management's extensive experience in, and in-depth knowledge of, the financial services industry in Hong Kong and the commodity futures market in Japan, thereby enabling the Group[p to anticipate changes in customers' requirements and to identify new business opportunities in these markets;
• Its strong sales and marketing team, where skills are further enhanced by the Group's commitment in providing them with regular training in product knowledge and customer services; and
• Its research capability, particularly with regard to its research analysis of the Japanese commodity futures market, which enables the Group to provides and clients with up-to-date market information and regular advice on their investment portfolios.

• There is no assurance that the Group's income derived from this business could be sustained at a particular level. Should this business activity of the Group encounter any setback, the Group's profit will be adversely affected.
• Fluctuations in exchange rates between the Hong Kong dollar and the Japanese yen could affect the Group's profitability through foreign exchange losses on the conversion of Japanese yen into Hong Kong dollars. If the Japanese yen depreciates, the Group will suffer an exchange loss and vice versa.
• If the Group's engaged brokerage firm defaults, the cash flow of the Group will be adversely affected.
• Underwriting and sub-underwriting business could lead to substantial losses should a fund raising activity underwritten by the Group be under-subscribed and the Group is required to take up the proportion of unsubscribe securities underwritten by it. The Group could would be exposed to any adverse movements in the market prices of any such securities taken up it and its profitability could be adversely affected.

The Group will focus on expanding its securities margin financing and securities broking businesses by recruiting additional sales and research personnel, and implementing a new marketing campaign.

The Group will invest in developing its information system i.e-front offices brokerage and back office settlement system in order to improve overall efficiencies and risk control.

The Group will recruit experienced corporate finance professionals to expand its current business of providing finance advisory services and to engage in other corporate finance activities. In addition, the Group will launch a new marketing plan and strengthen its sales and research team for its asset management businesses.

The Group intends to diversify its income base by expanding its operation in various financial futures including interest rate futures, HINBOR futures and equity link notes.

Given its experience in Japanese commodity futures markets and competitive strength as the market leader in trading the TGE Futures in Hong Kong, the Group intends to expand by increasing its local sales team and opening more branch offices in the suburban areas of Hong Kong with high concentration of retail clients.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$40 million (based on the offer price HK$1.00 per share). The Group at present intends to apply the net proceeds as follows: