Major Shareholder:

• Shanghai Technology Investment ¡V 11.88% interest
• Shanghai Xin Xuhui¡V 12.5% interest
• Shanghai Huixin ¡V 11.88% interest
• Jiaoda Nanyang ¡V 17.81% interest

The Group in principally engaged in the development of business application solutions in the PRC. One of its founders is Shanghai Jiao Tong University, a renowned tertiary education institution in the PRC. The Group utilises the expertise and research capability of Shanghai Jiao Tong University in the information technology sector to develop its core technologies in business application solutions.

The Group's operations encompass the development and provision of business solutions on project basis, the development and sale of application system as off-the-shelf products and sale of distributed products, such as notebook computers and computer related products.

The Group's business solutions development focuses on the PRC judicial, education and public security sectors. Shortly after its establishment on 4 May 1998, leveraging on the Courts Management Information System developed by Shanghai Jiao Tong University, the Company started to further develop and enhance the Courts Management Information System that supports bulk information management and the administration of trial procedures spanning across the three-tier court system in Shanghai.

In March 1999, the Group developed and implemented its first online education solution for primary and secondary schools in Shanghai. The system is a unique solution which supports communication, resources sharing and information dissemination in an Internet environment designed for schools.

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

• its management's experience and expertise in the information technology industry in the PRC and, in particular, in bulk information management and business application solution;

• it's strong research and development capabilities which has enabled the Group to introduce first-to-market applications systems in the PRC;
• its relationship with Shanghai Jiao Tong University which offers the Group strong technical support; and
• its specialization in highly regulated industries with significant growth potential which positions the Group to capture a significant market share in the sale of its application software products.

• Limited operating history;
• Product development and market acceptance risks;
• Reliance on senior management;
• Reliance on technological partners and other strategic alliances;
• No recurring revenue;

The Directors also believe that the Company, with the existing technology owned by the Group, its well-qualified and experience team of research and development staff as well as its relationship with and ongoing technological support from Shanghai Jiao Tong University and other research institutes, will be able to compete favorably and capitalize on the growth potential in the business application solutions market in the information technology sector in the PRC.

The Group's development strategies formulated by the Directors comprise four functional areas:

• continuous advancement in technological skills through devoted research and development, thereby increasing the Group's technological expertise and competitive advantages;
• ongoing enhancement of product quality and assembly capacity for hardware products, introduction of new products as well as product serialisation through the development of new business solutions, application systems, upgrading of developed application systems, software products and system security products;
• expansion of the production and assembly facilities to support the commercial launch of it network and data security products; and
• the expansion of the Group's distribution network and customer base in the PRC with respect to business application solutions and sale of distributed products activities through brand-building, marketing and promotion campaigns and setting up of representative offices in various strategic locations.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$66.0 million (based on the offer price HK$0.66 per share). The Group at present intends to apply the net proceeds as follows: