Major Shareholder:

• Mr. Chu Chi Ming ¡V 51.0% interest
• Pan Star ¡V 24.0% interest

Company Subsidiaries:

• Lahine Fire(100%): Provision ad installation of fire-rated timber door sets, and provision of interior decoration and renovation services and other carpentry works

The Group is engaged principally in the provision and installation of fire-rated timber door sets, as well as the provision of inte4rior decoration and renovation services and other carpentry works in Hong Kong. The interior decoration projects include granite slab, carpentry and joinery works. The renovation works involve the re-tiling of the external wall cladding, stainless steel louver and cladding. The interior decoration works are for public housing, private residential, commercial buildings and school buildings. The renovation works are for public buildings.

The Group has bee providing interior decoration and renovation services, as a subcontractor of construction projects in Hong Kong since the commencement of its business in early 1997. The Group also commenced to undertake design-and-build projects as a subcontractor for the Housing Authority in 1998.

The principal materials for the fire-rated timber door sets and interior decoration and renovation business used by the Group are doorframes, door panel, architrave and other construction materials. All required materials are purchased from a range of suppliers in Hong Kong, the PRC and United Kingdom.

As at the latest Practicable Date, the Group had 12 outstanding contracts on hand with an aggregate contractual value of approximately HK$91,509,539. Approximately HK$32,705,000 representing approximately 36% of the aggregate contractual value of the 12 outstanding contracts has been recognized as at the financial year ended 31st March 2002.

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

• Its experienced management team and well-trained staff;
• Its established good working relationship with te ASD and the Housing Authority by the Group's quality of work;
• Its well-established customer connections by the experienced management team;
• Its continuous participation in public sector interior decoration and renovation works;
• Its dedication to customer satisfaction, quality of work and cost control.

• Credit risks
• Reliance on supply and installation of fire-rated timber door sets
• Reliance on major suppliers
• Reliance on work performed by major subcontractors
• Reliance on major customers
• Non-inclusion of profit forecast

The Group has accumulated substantial financial resources and experience in contracting and project management, which allows the Group to undertake larger projects such as large housing project. Therefore, the Group will actively seek profitable business opportunities to diversify its revenue by engaging in both public and private projects.

With the accession of the PRC to the WTO and is stimulated strong economic growth, the Directors anticipate that the PRC domestic market and , in particular the market of high quality interior decoration and renovation business will become increasingly important. This will result in the increasing demand for fire-rated timber door sets and other interior decoration and renovation services provided by the Group. The Directors consider that there is much room for the Group's expansion in the PRC domestic market following the accession of the PRC to the WTO.

The Group intends to develop new future-rated timber door sets which one of higher level of fire resistance, lower installation cost, and other interior decoration and renovation settings. These new products will require substantial investment in the Group's future research and development projects and activities. Part of the net proceeds to be received by the Group will be used to fund research and development capabilities will enable the Group to secure recurring businesses from existing customers and attract new customers.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$40.6 million (based on the offer price HK$0.3 per share). The Group at present intends to apply the net proceeds as follows: