Major Shareholder:

• Mr. Tse Kam Pang - 37.5% interest
• Mr. Lam Toi - 37.5% interest

Company Subsidiaries:

• Chitaly HK (100%): Investment holdings and trading of furniture
• Wanliabo (100%): Manufacturing and trading of furniture
• Umbrella (100%): Trading of furniture
• Coralview (100%): Trading of furniture
• Ridecrest Ltd (100%): Provision of quality control services
• Knollwood Limited (100%): Provision of design services
• Moffat Ltd (100%): Provision of customer services

The Group is engaged principally in the design, manufactur and sale of a wdie range of home furniture. The products of the Group are currently sold under the brand name of ¡§¬Ó´Â¡¨ and ¡¨ª÷ÃM¤h¡¨ which include bedroom, dining room and living room furniture. The product line of ¡§¬Ó´Â¡¨ targeting at customers at all ages was launched in August 1998 while the product of ¡¨ª÷ÃM¤h¡¨ targeting at the younger generation were newly launched in May 2001.

Most of the Group's products were sold to the PRC while the remaining were sold to other areas such as Japan, Middle East, Australia, Taiwan, the United Kingdom and the US. Also, the Group has an extensive distribution network in the PRC, the Group has approximately 295 distributors located at 29 provinces and/ or municipalities throughout the PRC. These distributors are running approximately 360 distribution points of which 222 are specialty outlets operating under the shop names of ¡§¬Ó´Â¡¨ and /or ¡§ª÷ÃM¤h¡¨.

The Group's production facilities , having a gross floor area of about 35,820 sq.m are erected on a site with a total area of about 75,208 sq.m, located in Xin Cun Zhen, Zhengcheng city, Guanzhou, the PRC. The group started to set up the production of facilities in about May 1999 and commenced production of furniture with such facilities in September 1999.

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

• the in-depth knowledge and extensive experience of the Group's management team in the PRC furniture industry;
• the Group's commitment and ability to design and develop a wide range of fashionable furniture products, in particular, compete bedroom sets
• the Group's commitment to and emphasis on the quality of products;
• the Group's long-established relationship with its major customers and suppliers;
• the Group's established reputation and successful market penetration of the Group's quality products; and
• the extensive sales and distribution network of the Group in the PRC.

• Reliance on key personnel;
• Reliance on the PRC market;
• Reliance on major customers;
• Breach of the mutual understandings and verbal agreements between the Group and its customers who operate the specialty outlets;
• Availability and price of the raw materials;

The Group at present has three new lines of products ready to be introduced into the market. The Directors are planning to input more resources into the development and launch of such new lines of products so as to increase its market share and enlarge the number of the group's distributors through the attraction of end-user customers form different classes and age groups.

The Directors are optimistic about the future economic development of the PRC, and believe the demand for quality life style will generally increase in line with the economic growth. The Directors are of the view that the Group will benefit from the economic growth of the PRC. With its production plant in the PRC, the Directors consider that the Group is well positioned to capture such increase in demand in the future. In order to increase its market share, the Group intends to further expand its distribution network in the PRC.

Also, the Group intends to upgrade its machinery and equipment and to increase its production capacity through the construction of new factory buildings with new production lines. The Directors believe that the acquisition of more advance machinery will also improve the quality of the Group's products.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$33.0 million (based on the offer price HK$1.00 per share). The Group at present intends to apply the net proceeds as follows: