Major Shareholder:

• Mr. Chim Kim Kiu, Jacky ¡V 75.0% interest

Company Subsidiaries:

• Kunming Kanstar High Tech Products Development Co., Ltd(100%): Research, development, manufactured and sale of paper filling material
• Yunnan Changning Kanfar Paper Co., Ltd (100%): Development, manufacture and sale of pulp and paper products
• Addata Development Limited (100%): Holding and administration of intellectual rights of the Group's paper filing material and Kanstar brand name.

The Group is engaged principally in the research and development paper filling materials and the manufacture and sale of pulp and paper. The Group commenced its operations in May 1999 with the research and development of paper filling material for the pulp and paper industry. The paper filling materials developed by the Group is an additive used in pulp and paper manufacturing to reduce the use of wood and to improve paper quality. The Group's paper filling material, known as ¡§Leewood¡¨, primarily contains natural limestone found in Yunman provinces as well as other additives.

The limestone has fibre-like characteristics and forms a good bond with natural wood fibers in wood pulp. By substituting wood with the Group's paper filling material, paper manufacturing are able to produce environmental friendly paper that consumers less amount of wood than traditional papers. The Directors are currently not aware of any other paper filling material on the market that performs as a wood substitute. While the Group continues to improve the performance of its paper filling material, the paper filling material presently developed by the Group could substitute up to 30% of the wood used in pulp and paper manufacturing and the production cost of specialized pulp and paper, with Leewood added, could be lowered by approximately 10% as compared with traditional ¡§ all Wood¡¨ pulp and paper. The Group is currently producing at its full annual production capacity of 1000 tonnes of paper filling material.

Sales currently comprise of wood pulp to Yunnan, Sichuan and Guangdong provinces as well as various types of writing and copying paper under the Kanstar brand name to various cities within the Yunnan province and to Myanmar, south of Yunnan provinces. The Group's specialized pulp and paper is marketed as an environemtal friendly product, as it uses up to 30% less wood in the manufacturing process, whereas other writing and copying paper products available in the market are primarily made of 100% wood. The Group currently has an annual production capacity of 10,000 tonnes of pulp and paper.

• Limited operating history and loss making track record
• Net liabilities position
• Substantial adjusted net assets arising from surplus on revaluation of plant and machinery
• Acceptance of the Group's paper filling material by the industry
• Land use right of the site of the Channing paper plant
• Limited protection in relation to intellectual property rights
• Reliance on wood supply
• Customer's credit risk

The Group has been focusing on the development of paper filling material, to used as wood substitute for the production of the Group's own pulp and paper products or as a stand alone product to be sold to third parties. Following the acquisition of the Changning paper factory, te Group has been apply its paper filing material in the production of pulp and paper, including writing paper for marketing and sales purpose under the Kanstar brand name. As at the Latest Practicable Date, the Group's annual production for paper filing material and pulp and paper were 1000 tonnes and 10,000 tonnes, respectively.

The Group plans to acquire a further paper filling material production line to increase its annual production capacity of paper filling materials from 1000 tonnes to 5000 tonnes by the end of 2002 to 15,000 tonnes by the end of 2003 and to 25000 tonnes by the end of 2004. In addition, the Group plans to upgrade its existing pulp and paper production facilities in Changning in June 2002 by installing additional equipment to further expand its production capacity. Upon its completion in early 2003, the Group's pulp and paper production capacity is expected to increase form 10,000 tonnes to 20,000 tonnes a year.

The Group intends to expand its sales network by setting up sales offices in Kunming and Baoshan, Yunnam provinces, and in Chendu, Sichuan province to market its paper products to customers in the central and southern provinces in the PRC and its paper filing materials to paper manufactures in the country. The sales offices aim to promote the Group's paper products under the Kanstar brand name, to explore retail sales opportunities for the Group's own products in these tow provinces and to provide technical support to the Group's paper customers.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$25.3 million (based on the offer price HK$0.2 per share). The Group at present intends to apply the net proceeds as follows: