Major Shareholder:

• Mr. Siu Luen Fat - 16.7% interest
• Mr. Siu Kin Fat - 16.7% interest
• Mr. Siu Keun Fat - 16.7% interest
• Baserrich - 10.2% interest

Company Subsidiaries:

• Fleur Group (100%): Holding of copyright
• Best Faith (100%): Production and distribution of films
• B&S Films Production (100%): Production of videos and films
• B&S Films Distribution (100%): Distribution of films

The Group is principally engaged in the business of (a) production of movies; (b) distribution of copyright/film rights in respect of movies produced by the Group to overseas countries and in Hong Kong; and (c) sub-licensing of film rights in respect of movies procured from overseas movie producers in Hong Kong.

The Group is principally engaged in the production of Chinese language movies in Hong Kong and distribution of copyright/film rights in respect of Chinese language movies produced by the Group to overseas countries and in Hong Kong; and sub-licensing of film rights in respect of movies procured from overseas movie producers in Hong Kong.

The Group's movies were produced using (a) 35mm filming technique, a traditional way of producing movies in the film production industry; and (b) digital video filming technique, a way of producing movies which emerged in the film production industry in the past few years. The Directors believe that the Group is one of the prime movers for the production of movies using DV equipment in Hong Kong.

During the year ended 30^th June, 2001 and the six months ended 31^st December, 2001, the Group has been engaged in the business of sub-licensing of copyright/film rights (including 500 adults movies and 200 other types of movies such as comedies and horror movies) which amounted to approximately HK$13.9 million and HK$3.9 million respectively. The copyright/film rights of the movies were licensed from an independent third party in Hong Kong and were sub-licensed to another independent third party in Hong Kong.

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

• the Group is one of the prime movers in the DV format movie production industry in Hong Kong and the Group has an advantage in the production and distribution of DV format movies;
• efficiency and cost effectiveness in the Group's production processes as a result of the use of DV filming technology which provides flexibility for the Group's development in the future;
• its experienced and dedicated management team which possesses an in0depth knowledge on the production and distribution of movies produced by the Group;
• its close relationship with customers and suppliers; and
• its film library consisting of 60 movies enabling the Group to further develop and expand its business.

• Reliance on overseas film producers;
• Reliance on independent sub-contractors;
• Reliance on major suppliers;
• Reliance on financing from a Director;
• Failure to protect its intellectual property rights;

In order to establish itself as one of the leading DV format movie producers and distributors in Hong Kong for overseas and domestic customers and with the anticipated increase in the demand for DV format movies in the future, the Group intends to further invest in various equipment for the production of DV format movies.

The Directors consider that during the Track Record Period and at present, the number of cast employed by the Group for the production of movies has been limited. In order to expand and strengthen the marketability of the Group's movies and to continue to provide high quality movies with rich content of different varieties, the Group plans to increase the budge for employment of cast in the future on a project by project basis.

The Group also plans to extend its sales and distribution networks to the non-Chinese communities around the world as the Directors believe that after the release of a Oscar-winning Chinese film in 2001, more interest has been shown by the US and European markets in Chinese films and the demand for such films is anticipated to increase and as a result, the Group plans to produce Chinese films which may interest the US and European markets.

To further strengthen the Group's revenue in the future, the Group also plans to engage in the provision of advertising services to customers seeking alternative marketing channels by advertising their products in the Group's films. The Directors anticipate that the market penetration of the Group's movies will increase in the future and as a result, customers' interest for placing advertisement in the Group's films will also increase.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$24.0 million (based on the offer price HK$0.5 per share). The Group at present intends to apply the net proceeds as follows: