Major Shareholder:

• Mr. Wong Chi Ming ¡V 64.0% interest

Company Subsidiaries:

• On Line (100%): Manufacture and sale of jewellery products
• Magfrey Company Limited (100%): Trading of diamonds and gemstones
• Brillant (100%): Trading of diamonds and gemstones
• Jeda International (100%): Distribution of jewellery products
• On Line Pacific (100%): Provision of quality control services
• Pacific Worldwide (100%): Provision of marketing services
• Mass Base Co., Ltd (100%): Provision of administrative services

The Group is principally engaged in the design, manufacture and sale of a broad range of gem-set jewellery products. The Group's products can be broadly categorised into diamond products, gemstone products and other non gem-set jewellery related products including gold, brass and silver rings, earrings, brooches, pendants, bracelets, bangles, necklaces, anklets and belt buckles. The Group is also engaged in the trading of diamonds and gemstones.

The Group's gem-set jewellery products are mainly sold on ODM or OEM basis. The products sold on ODM basis are designed by the Group. During the Track Record Period, the Group designed more than 9,000 items of gem-set jewellery products which were sold on ODM basis. The packaging of the products is undertaken by the Group's customers and sold under the brandnames of the customers. None of the Group's products are sold under the Group's own brandname.

Products manufactured by the Group are primarily sold in the US, Europe, the Middle East and South East Asia. For the three years ended 30^th September, 2001 and the four months ended 31^st January, 2002, the US is the largest market of the Group's products and sales to the US accounted for about 63.7%, 60.9%, 59.7% and 57.6%, respectively of the Group's turnover. Customers of the Groups include distributors, wholesalers and retailers of jewellery products. During the Track Record Period, there were no domestic sales in the PRC made by the Group.

The production facilities of the Group are located in Shunde, Guangdong province, the PRC, and are operated under the Processing Agreement made between the Group and Kiu Fook Factory as the processing agent and another independent third party, Guangdong Macro as the service agent for Kiu Fook Factory. Under the PRC law, it is necessary for Kiu Fook Factory to obtain the requisite permit from POBC in order to engage in the processing of gold products in the PRC.

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

• The in-depth knowledge and extensive experience of its management in the jewellery industry;
• Its capabilities to design and manufacture a wide range of fashionable gem-set jewellery products of high quality;
• Its commitment to develop and improve its production technology;
• The extensive sales network established by the Group's marketing team and the good business relationships established with its customers;
• The comprehensive internal control procedures to ensure high quality raw materials and finished products; and
• The competitive prices of its product

• Tax liabilities of certain members of the Group;
• Reliance on a single processing agreement;
• Reliance on major suppliers;
• Reliance on major customers;
• Reliance on the US market and impact of the terrorist attacks;

The Group has established a reputation for it product quality and its ability to manufacture a wide variety of jewellery products. Gem-set jewellery products will remain as the core products of the Group. The Group's mission is to develop new products and expand its market coverage.

Given the success of the Group's jewellery products, the Group will continue to capitalise on its strong customer base by expanding the Group's product portfolio through the development of new designs of jewellery products to increase its product variety such as new designs of (i) existing products, including rings, earring, pendants, bracelets, necklaces, brooches, belt buckles and cufflinks; (ii) gem-set jewellery products using both diamonds and gemstones; and (iii) gem-set jewellery products using a combination of precious metals.

The Group intends to upgrade its production equipment to meet the increasing demand for products. With the aid of modern equipment in the production of innovative designs of jewellery products, the overall cost competitiveness and the quality of the Group's products are expected to be enhanced.

Given the Group's wide range of high quality products and competitive pricing, the Group currently intends to expand the Group's marketing force and to explore sales opportunities in its existing markets as well as potential markets by recruiting more salesmen, setting up showrooms in the US and Europe, appointing overseas wholesalers and distributors and launching promotion and marketing shows or other suitable projects when suitable opportunities are identified.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$39.0 million (based on the offer price HK$0.36 per share). The Group at present intends to apply the net proceeds as follows: